Deutsche Post AG Annual Report 2013

FY2013 Annual Report · Deutsche Post AG

Loading PDF…

2013 Annual Report

TAILOR MADE

Title and this page: DHL also logistically
supports the well-known German fashion
designer Michael Michalsky. He has even
designed a collection made of packaging
materials.

To our Shareholders

In today’s age, tailored logistics services are a key to success for companies in many
industries. We are proficient in this business and are determined to offer every customer
precisely the service they need to be successful. Doing this means facing a wide range
of challenges, even within one industry. We illustrate this on the following pages using
the example of the fashion industry, a sector in which Deutsche Post DHL is one of the
leading international logistics providers.

We are more than aware that our success is reliant on the success of our customers. It
is therefore not without pride that I can report that we achieved all of the goals we set
ourselves for 2013. What’s more, we did so despite the fact that the market recovery
hoped for failed to materialise and that we suffered from major negative currency effects.

Deutsche Post DHL increased profit from operating activities in financial year 2013 to
€2.86 billion, due to improved margins. Consolidated revenue declined slightly to around
€55.1 billion, largely due to negative currency effects. It was particularly pleasing to see
that our most important drivers of growth, the parcel business and the international
express business, remain intact.

The dynamic parcel business in Germany, for instance, contributed to the positive business
development in the MAIL division. International business performance in the DHL divisions
was largely impeded by negative currency effects. Although revenue was lower, we were
still able to increase earnings in the EXPRESS and SUPPLY CHAIN divisions through strict
cost management. The freight forwarding business, however, declined in an appreciably
weakened market. In addition, EBIT in the GLOBAL FORWARDING, FREIGHT division included
expenses for the New Forwarding Environment strategic project, with which we have
already made good progress.

For the first time, we set ambitious cash flow targets for 2013 and we have clearly
achieved them. After reporting a cash outflow in the prior year, operating cash flow has
now improved to €2.99 billion. Furthermore, the Group’s good financial position is also
demonstrated by the favourable refinancing conditions we were offered on the capital
market. For instance, in the reporting year we renewed a long-term credit facility early
and at more favourable terms; we also issued two bonds with a total volume of €1 billion.

Deutsche Post DHL 2013 Annual Report

To our Shareholders

For my part, achieving our ambitious cash flow target is also a good example of what our
employees are able to accomplish when they concentrate on our most important objec-
tives – objectives as set out in our medium-term Group strategy. Since 2009, our “Strategy
2015” has been the framework for our endeavours to become the provider, employer and
investment of choice.

With a network that spans the globe and outstanding market positions in the world’s
growth markets, we are a strong and reliable partner for our customers. We invest con-
tinually in the expansion of our infrastructure as well as our products and services.

As we move towards the goal of becoming employer of choice, we measure our progress
using an annual Group-wide employee opinion survey. The results indicate high approval
for our key performance indicators.

In addition to solid financial results, I am especially pleased that our performance is also
reflected in the growing confidence shown to us by the capital market. Our share price
outperformed the DAX for the third consecutive year and in May we shall propose to the
Annual General Meeting that the dividend we pay to you be raised to €0.80 per share.
This represents a payout of around 49 % of adjusted net profits.

In the current financial year, we expect slight economic expansion at best. The global
trading volumes relevant to our business are expected to perform similarly and impact
our revenue accordingly, particularly in the DHL divisions. Against this backdrop, we
expect consolidated EBIT to reach between €2.9 billion and €3.1 billion in financial year
2014. The MAIL division is likely to contribute around €1.2 billion to this. Compared with
the previous year, we expect an additional improvement in overall earnings to between
€2.1 billion and €2.3 billion in the DHL divisions. Operating cash flow is expected to see
further positive development in line with the respective EBIT trend.

Furthermore, we remain confident that we shall achieve the objectives we have set for
ourselves in ”Strategy 2015”. Overall, we continue to anticipate an increase in consoli-
dated EBIT to between €3.35 billion and €3.55 billion in 2015. The MAIL division is likely to
contribute at least €1.1 billion, whilst the DHL divisions are expected to contribute between
€2.6 billion and €2.8 billion. We have adjusted the anticipated earnings contributions
following the consolidation of parts of the domestic parcel business outside Germany
within the MAIL division at the beginning of 2014.

Deutsche Post DHL 2013 Annual Report

To our Shareholders

Fashion is not the only industry in which today’s end customers decide spontane-
ously to make purchases in store, from a catalogue, at their computer or on their
smartphone. E-commerce and the B2C business associated with it will continue to
boost our parcel business and open up many possibilities even beyond the 2015
strategic perspective.

DR FRANK APPEL
CHIEF EXECUTIVE OFFICER

MARCH 2014

Deutsche Post DHL 2013 Annual Report

THE PINNACLE
OF FASHION
LOGISTICS

DHL OFFICIAL LOGISTICS PARTNER FOR FASHION WEEKS

On with the show: DHL ensures every
item of clothing makes it to the catwalk
on time.

DHL provides the fashion
industry with logistics
solutions that go above
and beyond standard
service.

Deutsche Post DHL 2013 Annual Report

Backstage it’s all hustle and bustle. Out front everyone
is hyped up in anticipation. The lights go down and the
spotlight goes on – it’s show time. Just a few minutes on
the catwalk can make or break whether a new designer
collection will be a success or not. Everything has to be
perfect. One of the prized pieces not arriving on time is
simply unthinkable.

DHL offers the fashion market flexible, tailored logistics
solutions. Its portfolio is broad and includes the manage-
ment of global supply chains – from the purchase of mater-
ials right through to sales. Services such as special packaging,
the safeguarding of goods, customs clearance, warehousing,
inventory and returns processing are also available. In order
to offer these services, the Group’s forwarding division –
DHL Global Forwarding – has, for example, invested in sev-
eral Fashion and Apparel Centres for Excellence in the Asia
Pacific region. The centre’s fashion logistics experts offer
services that go well beyond simple transport – for example,
warehousing with cutting-edge security systems that guard
against theft. What’s more, the Centre of Excellence offers
a variety of value-added services such as inventory picking,
labelling, visual quality control and repacking.

“Buongiorno, Mauro.” – When Mauro Zardi’s telephone
rings, he’s often greeted by staff from well-known designer
brands. Mauro is a Fashion Project Manager at DHL Express in
Milan. Regardless of whether the shelves of a new boutique
need to be filled, garments are required at a fashion show or
a dress that is currently on a rack in Milan is urgently needed
in Paris, Mauro can find a solution.

“We know exactly what our customers need and handle
everything associated with a designer’s collection,” says
Mauro. “That involves fashion show logistics as well as fully
supplying their shops and picking up remaining stock at the
end of the season. We’ve worked with some customers for
many years now and offer them services beyond what is
standard.”

WORLDWIDE NETWORK
FOR FASHION LOGISTICS

Fashion experts like Mauro Zardi benefit from the
Group’s global express network. More than 250 planes are
on standby, ready to travel between the company’s main
hubs in Leipzig, Cincinnati and Hong Kong, not to mention
the many other hubs around the world. What cannot be
transported by air makes the journey by road in one of the
31,000 vehicles that make up the global fleet. And when time
is of the essence, Mauro doesn’t hesitate in sending a special
courier. This is how DHL ensures that all items reach their
destination at the time the customer chooses – regardless of
whether it’s within hours, same day or the next day.

HITTING THE CATWALK

DHL has been the official logistics partner for Fashion
Weeks for six years. It’s the pinnacle of fashion logistics –
over the fashion week season, in excess of 700 designers
showcase their collections at around 1,600 different events
all around the world. An audience of over 800,000 watches
this catwalk spectacle live each year. Everything has to go
a little faster – with final touches being made to the collec-
tions right up to the last minute. What’s more, the items in
question are particularly valuable.

Deutsche Post DHL 2013 Annual Report

and accessing the e-commerce market. The competition win-
ner will receive the opportunity to present two consecutive
collections to one of the four major fashion markets – Milan,
New York, Tokyo or London. It could potentially be just the
boost needed to launch an international career.

“I turn my ideas into clothing.
This is how abstract ideas become
something that is really tangible.
You only get that impression when
you touch my clothing and feel
the material. I want to take my
creations to as many people
as possible – and that’s precisely
what DHL can help me do.”

Yu Amatsu

INVESTING IN THE FUTURE

Yu Amatsu’s story is a prime example of DHL’s commit-
ment to fostering young fashion talent. In 2012, he won the
young designer competition in Tokyo and in 2013 he pre-
sented his “A Degree Fahrenheit” label at Berlin Fashion
Week. Although Yu Amatsu was certainly not an unknown in
Japan, DHL helped him to penetrate the international market,
understand the customs clearance process and transport his
collections. The young designer wishes to meld the best
of both worlds from Asia and Europe in his fashions. And
who better to bring it all together than a global logistics
company with the experience of people like Mauro Zardi –
where fashion logistics is the warp and weft of working life.

FOSTERING THE NEXT GENERATION
OF DESIGNERS

DHL not only works with well-known and established
designers, the logistics company also supports the next
generation. In recent years DHL has held a number of dif-
ferent young designer competitions. Talented individuals
have received the opportunity to present their collections
in Toronto, Tokyo, Sydney and Moscow and further support
was provided as of 2014 with the set-up of an international
competition within the framework of the DHL Exported pro-
gramme. Applications are open to all couturiers who have
already established themselves in their domestic markets
and have designs on taking on the international scene. But
DHL is not only supporting this expanded programme with
its logistics expertise, up-and-coming designers will also re-
ceive help with financing, searching for new sales partners

a Hot or not: the audience decides in a matter of
seconds whether or not the collection will be a
success.

b The latest fashions are not only showcased in

Moscow: the various Fashion Weeks are cause for
about 1,600 events around the globe every year.

c Fostering new talent: Yu Amatsu presented his

collection at Berlin Fashion Week in 2013.

d Rachelle Sinclair and Fay Ogunbadejo, the design
duo behind the Kahlo label, have secured the DHL
Fashion Expert Scholarship 2013.

dhlexported.com

Deutsche Post DHL 2013 Annual Report

WHY TECHNOLOGY
RINGS MY BELL

Three questions to the well-known consumer psychologist
Stephan Grünewald.

Mr Grünewald, imagine the scene: the doorbell rings, the DHL
courier is standing at the door and hands over a package.
It’s the online purchase you’ve been expecting. Could you
describe for us the psychology of the situation: what is the
recipient feeling at this moment?

A feeling of happiness. It’s as if you’ve just received a gift.
The DHL employee is, so to speak, Father Christmas for grown-
ups – one who brings presents all year round.

Can online shopping really trigger that feeling of happiness?
Virtual shopping isn’t exactly an experience for the senses.
You can’t touch, feel and try out products when you’re sitting
in front of the computer.

Online shopping is kind of an advance payment that the con-
sumer has to make in order to experience that feeling of happi-
ness when the delivery arrives. It is correct that shoppers are not
able to touch or feel the products but if you take a look at the
online shopping process chain, then – I have to say – there’s an
element of wish fulfilment there. Many consumers really dive into
catalogues or websites before they make a purchase. They asked
themselves: how can I treat myself? What style of clothing is for
me? And what could I become if I bought this or that product?

By online shopping, we spare ourselves a certain level of
mental anguish and can be more courageous or experimental. We
browse in a safe place – our own home – and avoid the public
catwalk. People tend to buy items of clothing they might not
even have tried on in the shop or allow themselves to pick out
a larger size. After all, you can try on things and pick out what
you like at home alone or with a good friend in a safe and secure
atmosphere and without having to come into contact with the
salesperson or other customers.

Moreover, online shopping disconnects you from the actual
costs of shopping. You avoid your own personal transport logis-
tics. You don’t have to leave the house and venture into packed
shops, and you don’t have to carry bags. You get it handed to
you on your own doorstep. This further enhances the feeling of
receiving a gift and also triggers a moment of surprise in addition
to the feeling of happiness.

But why is it a surprise to open a package you ordered yourself?
People resort to subconscious strategies to produce this
surprise effect. They sometimes forget what they have ordered.
Not because they are scatterbrained but because their psyche
takes over. This way they can reward themselves time and again,
triggering the feeling of receiving a gift and of being surprised.

Stephan Grünewald is one of two founders of the Rheingold institute for
qualitative market and media research in Cologne, Germany. His new book,
“Die erschöpfte Gesellschaft” (the exhausted society) was published in 2013.

10,780

Clothing

2,520

Computer and accessories

2,590

Books

Deutsche Post DHL 2013 Annual Report

4,080

Electronic items

1,920

Furniture and decorations

Online and mail-order revenue, 2012,
by goods category in Germany (€ m)
Source: BHV

1,510
Textiles (excluding clothing)

960
Consumer electronics

1,620
Household appliances

1,880

Shoes

2,500

Hobby, collecting
and leisure articles

Deutsche Post DHL 2013 Annual Report

SCREAM
FOR JOY

DHL CO-WRITES THE ZALANDO SUCCESS STORY

Smiling online shoppers hug
their postmen, people cry
out with joy when they clap
eyes on a DHL courier – or
so Zalando would portray
its customers. The story of
this online shop is nothing
if not fast paced: the small
corporation, founded in 2008
by Robert Gentz and David
Schneider as a start-up in a
Berlin flat, is today Zalando –
one of the heavyweights
in the German online shop-
ping market.

In the beginning, the founders
packed and took the parcels to the
post office themselves. Within a few
weeks of the company’s founding, they
had to order a taxi to transport the
parcels, with their daily volume quickly
rising to around 60 parcels. Today, the
use of taxis to transport parcels to an
outlet has ceased to be logistically
viable: Zalando now sends an average
of one million parcels to customers
every month.

Deutsche Post DHL supports
growth
Without the help of a strong logis-
tics partner, it would not have been
possible for the company to handle
such rapid growth – and DHL Paket has
been on board from the word go. Today,
Deutsche Post DHL’s parcel branch is
the company’s main shipping partner,
handling all of Zalando’s dispatches
and the majority of its returns.

“Our services make us an ideal
partner for Zalando,” explains Katja
Herbst, Chief Sales Officer at DHL Paket.
“We’ve been working together for years
and we share a common goal: satisfied
customers.”

Deutsche Post DHL 2013 Annual Report

DHL Paket collects the prepared
parcels from Zalando and takes them
to the nearest parcel centre, where
they are sorted before being delivered
to the recipient. However, DHL doesn’t
stop there. Its services go far beyond
parcel delivery processing. In a meas-
ure designed to minimise idle time, DHL
also provides Zalando with warehouse
logistics support at the logistics centre
in Erfurt where the company stores
some of its stock. This collaboration
also includes the handling of incom-
ing goods from manufacturers and the
distribution of samples.

Faster shipping fulfils
customer expectations
“Deutsche Post DHL has been a re-
liable, flexible and innovative partner
since we started this business in 2008.
DHL inspires a sense of confidence and
meets the high expectations of our
customers, who wish to receive their
products quickly,” says David Schröder,
CEO of Zalando Operations GmbH. But

the partnership goes deeper than that,
he explains: “we learn from each other
and work together to continuously
optimise our high standards in terms
of both delivery times and customer
service”.

Postman’s knock
Yellow-and-red-clad delivery driv-
ers out and about with parcels sport-
ing the black-and-orange logo have
long since been a common sight in
Germany. In fact, Deutsche Post DHL
couriers have come to play a central
role in Zalando’s advertising cam-
paign over the past few years. With
the slogan “scream for joy” (Schrei vor
Glück), their advertisements feature
customers – predominantly women –
doing just that as the postman rings
the doorbell, bringing parcels full of
shoes and clothing. As soon as these
advertisements hit television screens,
the click rate on the home page shoots
up – as does the number of orders.

The Deutsche Post DHL
courier plays a leading role
in Zalando advertisements.

Deutsche Post DHL 2013 Annual Report

The deliverers are the link be-
tween Zalando and the customer. In
fact, the advertisements represent
both a tribute and a thank you to all
those delivering parcels across the
country. After all, they have accom-
panied Zalando right from the start
and are an important part of the com-
pany’s success story.

In 2012, the online fashion shop
generated revenues of €1.15 billion.
Zalando ended the first half of 2013
with net revenues of €809 million. The
company’s assortment now boasts
more than 150,000 products – from
shoes and clothing to accessories and
sporting goods. A first-class logistics
service is non-negotiable in ensur-
ing this success story continues and
Deutsche Post DHL has introduced
many services to make the lives of both
the online supplier and its customers
even easier. “Our new services put
online shops in the position to offer

their customers even faster and more
convenient parcel delivery options,”
says Andrej Busch, CEO DHL Paket.

Zalando expands into Europe
Zalando is benefiting here, too,
and is now extending its successful
co-operation with Deutsche Post DHL
beyond its domestic borders. Within
one year of founding the company,
the online fashion shop began mak-
ing deliveries to Austria, followed by
the Netherlands and France. Indeed,
Zalando now operates in 15 European
countries, generating more of its rev-
enue outside Germany. DHL Freight
handles the bulk of international
shipments to neighbouring countries.
Zalando continues to grow and the
success story of the start-up that
turned into a European fashion giant
is far from over.

Deutsche Post DHL
offers convenient delivery
solutions: the around
2,650 Packstations across
Germany, for example,
facilitate the collection
and dispatch of parcels
both day and night.

Deutsche Post DHL 2013 Annual Report

SENDING AND RECEIVING
PARCELS MADE EASY

Mobile services from DHL Parcel
With the barcode scanner our customers can
track their DHL items, calculate postage, find
their closest Packstation, Paketbox or postal
outlet, or contact customer service – all with
the DHL app. dhl.de/mobil

All services are available throughout Germany.

DHL Paketshops
Paketshops offer our customers another alter native
when mailing parcels, small packages and returns.
Opening hours are flexible and customers do not
have to queue to post a parcel. dhl.de/paketshop

Post office direct
People who are rarely at home during the day
have the option of having their items sent directly
to the postal outlet of their choice, ready for
collection at their convenience.

DHL Paketbox
Thanks to this letterbox for parcels and small
packages our customers can send pre-stamped
parcels, small packages and returns around
the clock – now from around 1,000 locations in
Germany. dhl.de/paketbox

DHL collection service
This simple and convenient service allows cus-
tomers to have their parcels and small packages
collected by one of our couriers from their home
or any specified address – nationwide in Germany.
dhl.de/abholung

DHL Packstation
Packstation users can send and receive parcels
day and night. Gone are the days of waiting for
a courier or worrying about opening hours. There
are now around 2,650 Packstations available
throughout Germany. dhl.de/packstation

Parcel notification and preferred day
With the parcel notification service, our customers
know when their parcel will arrive. And if they are
not at home, they can choose another delivery
date using the preferred day service.

Preferred location
Upon request, we deliver items to customers
even if they are not at home. They stipulate a
concealed place on their property where we can
leave the parcel when they are not in.

Preferred neighbour
Alternatively, customers may nominate someone
in their immediate neighbourhood with whom we
can leave their parcels if they are not at home.

An overview of all recipient services is available at:
paket.de

Deutsche Post DHL 2013 Annual Report

FROM CATWALK

LOGISTICS, MADE TO MEASURE

Fashion is a fast-moving business.
Today’s must-have could be tomorrow’s
overstock. Online retail has taken this
to the next level as consumers are in-
creasingly freed from the constraints
of time and place, and schedules for
getting new goods to market are ever
tighter. For logistics providers like
DHL, this means that the pressure to
increase speed while lowering costs is
becoming more intense.

Meeting this challenge requires
agility within an optimised cost struc-
ture – and in the fashion industry,
this applies to logistics providers and
manufacturers alike. That was the
conclusion of a DHL white paper based
on the findings of a “Fashion Master
Class” workshop held in May, 2013. DHL
invited executives from brands like
Adidas, Levi Strauss & Co. and the Tom
Tailor Group to discuss strategies on
the future of fashion logistics. The gen-
eral consensus: the demand for speed,
flexibility, responsiveness and control
in the supply chain is greater than ever
before.

The paper’s author, Lisa Harring ton
of the strategic supply chain consult-
ing firm lharrington group LLC, sees
a number of trends that are radically
changing the fashion landscape.

Increasing fluidity between
online and offline
One of these is omni-channel re-
tailing, in which modern consumers
switch seamlessly between purchasing
items at online and brick-and-mortar
stores. “Nowadays, one in ten online
orders is now issued from within a
store,” explains Marcel Beelen, Vice
President Business Development, DHL
Fashion & Lifestyle Europe, “meaning
customers notice an item in a shop

and then order it via their hand-held
device.” Shoppers can also decide
whether purchases should be delivered
to their home, to the store or any other
collection point.

This style of shopping has funda-
mentally changed the world of inven-
tory management. “In the past, brands
often separated the online and offline
world, with separate systems and in-
ventories being the norm,” comments
Beelen. “Nowadays, there is a strong
desire to integrate and handle both
environ ments with a single system and
out of one inventory.” Store managers
can use tracking systems at any time to
follow the progress of a specific item
along the chain. This allows goods in
transit to be considered “on-hand in-
ventory”, able to be sold to customers.

A logistics challenge
“Keeping both transparency and
control of inventory and merchandise
flow are the real challenges for logis-
tics,” agrees Carsten Schmelting, re-
sponsible for supply chain manage-
ment at German clothing manufacturer
Tom Tailor. The company produces
twelve different collections a year for
each of its eleven clothing lines, manu-
factured predominantly in Asia. It sells
them both retail and wholesale, and
increasingly via online shops in 21
countries. Since 2008, DHL has been a
third-party logistics provider for major
parts of the Tom Tailor operation.

With Tom Tailor’s online sales
growing and its stationery distribution
network spreading, the two channels
are becoming increasingly integrated.
For example, the company is currently
examining whether it could be possible
for customers to return items ordered
online, directly to stores. But this, in

turn, throws up its own questions:
Should these articles be added to the
local inventory or brought to a central
warehouse? “A lot of new processes
and booking procedures are involved
as well as critical monetary issues,”
says Carsten Schmelting.

40,000

square metres of space make up
the new DHL logistics centre
geared specifically for Tom Tailor.
DHL broke ground in 2013.

40million units were processed

by DHL Supply Chain for Tom
Tailor in 2013.

Deutsche Post DHL 2013 Annual Report

TO SIDEWALK

Faster and faster
Another key trend within the
industry is known as “fast fashion”.
Inditex, the parent company of Zara,
pioneered this style of “disruptive”
retailing. Instead of purchasing huge
inventories in distant factories with
long lead times in the hope that the
goods would sell well, these retail-
ers produce small batches of items in
nearby factories, with incredibly fast
turnaround and delivery. If an item
sells, more can be produced and de-
livered quickly. If not, there is less stock
to mark down. “In the past, there were
four seasons a year. Nowadays, the
shop floor changes every four weeks,”
comments DHL’s Beelen. Tom Tailor
manager Schmelting agrees: “Fashion
has always been fast, but over the past
ten years we have shortened the lead
times between conception and delivery
of a collection considerably, in order to
stay on top of the trends.”

DHL manages the entire
supply chain
Speed is not the only factor in suc-
cessful fashion logistics. Quality and
cost- cutting are important, too. “At the
end of the day, we need to bring those
three issues in line,” says Schmelting.
This is only possible through planning,
continuous process optimisation and
innovative solutions, such as RFID tag-
ging – and state-of-the-art automa-
tion. It is also important to carefully
ex amine interfaces: many incremental
steps are involved between sourcing
raw materials and delivering the final
goods – and poor handovers or miss-
ing information can cost both time and
money. Thanks to years of experience
and its sophisticated supply chain
management systems, DHL protects

MORE
THAN
TRANSPORT
AND
WARE
HOUSING

DHL is a full service provider
offering exclusive and customised
value-added services to their
fashion customers. Examples are
steaming, attaching alarm tags
and price ticketing.

its fashion customers from problems
like these – and makes sure the latest
styles are at the right place, at the
right time.

a All present and correct: trans-

parency and stock management
are the order of the day – not
only in the high bay warehouse
but throughout the entire
logistics chain.

b Tom Tailor produces twelve collec-
tions for eleven lines every year.

c Tom Tailor now distributes its

products retail, wholesale and
online throughout 21 countries.

Deutsche Post DHL 2013 Annual Report

OUR BUSINESS

Deutsche Post is Europe’s largest postal service provider, the market leader on the German letter and parcel market and has a
leading position in international mail. Its portfolio ranges from standard products to environmentally-friendly and tailored solu-
tions for consumers and business customers in the areas of mail communication, dialogue marketing and transporting parcels.

MAIL

Business units and products

Customers

40.7 million households
3.7 million business customers
2.0 million retail outlet customers
per working day

Network in Germany

82 mail centres
33 parcel centres
Around 2,650 Packstations
Around 1,000 Paketboxes
Over 26,000 retail outlets and points
of sale
64 million letters per working day
More than 3.4 million parcels
per working day

Mail Communication
Mail products
Special services
Franking
Philately

Dialogue Marketing
Advertising mail
Tailored end-to-end solutions
Special services

Press Services
Press distribution services
Special services

Parcel Germany
Parcel products
Special services
Packstations, Paketboxes
Portals: MeinPaket.de; Allyouneed.com
paket.de

Global Mail
Mail import and export
Cross-border mail and parcels
Mail services in domestic markets
outside of Germany
Special services

Pension Service
Database administration
Payment processes

Deutsche Post DHL 2013 Annual Report

Business units and market positions, page 24 ff.
Objectives and strategies, page 31 ff.
Business performance in the divisions, page 62 ff.
Future economic parameters, page 101 ff.

With its expertise in the cross-border express business, air and ocean freight, road and rail transport and contract logistics, DHL is the
market leader in the international logistics industry. With a global network and local expertise as well as a commitment to service and
quality we provide solutions tailored to customer requirements in more than 220 countries and territories.

EXPRESS

Products

Time Definite
Same Day
Day Definite

Regions

Europe
Americas
Asia Pacific
MEA (Middle East and Africa)

Network

> 220 countries and territories
3 main global hubs
> 40,000 Service Points
2.7 million customers
31,000 vehicles
> 250 dedicated aeroplanes

GLOBAL FORWARDING,
FREIGHT

SUPPLY CHAIN

Products

Supply Chain

Global Forwarding
Air freight
Ocean freight
Industrial projects
Transport management
Customs clearance

Freight
Full truckload
Part truckload
Less than truckload
Intermodal transport

Regions

Global Forwarding
Worldwide
> 150 countries and territories

Freight
Europe, CIS, the Middle East,
North Africa, USA
> 50 countries

Locations

Global Forwarding
> 850 branches

Freight
> 180 branches

Services
Warehousing
Distribution
Managed transport
Value-added services
Supply Chain management and consulting

Focus sectors
Consumer
Retail
Technology
Life Sciences & Healthcare
Automotive
Energy

Global products
Lead Logistics Provider
Packaging Services
Maintenance & Repair Operations
Technical Services
Life Sciences & Healthcare Platform
Airline Business Solutions
E-Fulfilment
Environmental Solutions

Williams Lea

Marketing Solutions
Office Document Solutions
Customer Correspondence Management

Deutsche Post DHL 2013 Annual Report

a GROUP MANAGEMENT REPORT

19 – 106

b CORPORATE GOVERNANCE

107 – 132

c CONSOLIDATED FINANCIAL STATEMENTS

133 – 214

d FURTHER INFORMATION

215 – 224

a GROUP MANAGEMENT REPORT

Report on Economic Position

21 General Information
43
71 Deutsche Post Shares
74 Non-Financial Figures
87
88 Opportunities and Risks
101
Expected Developments

Post-Balance-Sheet Date Events

C
o
n
t
e
n
t
s

b CORPORATE GOVERNANCE

Report of the Supervisory Board
Supervisory Board
Board of Management

109
113
114
116 Mandates
117

Corporate Governance Report

c CONSOLIDATED

FINANCIAL STATEMENTS
Income Statement
Statement of Comprehensive Income
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity

135
136
137
138
139
140 Notes to the Consolidated Financial Statements
213
214

Responsibility Statement
Independent Auditor’s Report

d FURTHER INFORMATION

Index

217
218 Glossary
219 Graphs and Tables
220
Locations
222 Multi-Year Review
224
Contacts
Publication Service
224
Financial Calendar

To our Shareholders
1
4
Tailor Made
16 Our Business
18

Selected Key Figures

Cross-references

Websites

C
O
N
T
E
N
T
S

S
E
L
E
C
T
E
D

K
E
Y

F
I

G
U
R
E
S

+ / – %

– 0.6

7.0

–

43.5

–

+ / – %

– 0.8

7.4

–

27.5

Q 4 2012

Q 4 2013

14,577

14,494

827

5.7

538

885

6.1

772

–

– 629

1,561

–24.1

–

27.2

14.3

1.7

–

0.45

0.64

42.2

–

01 SELECTED KEY FIGURES

Revenue

Profit from operating activities (EBIT)

Return on sales 1

Consolidated net profit for the period 2

Operating cash flow

Net debt 3

Return on equity before taxes

Earnings per share 4

Dividend per share

Number of employees 6

€ m

€

2012

2013

55,512

55,085

2,665

2,861

4.8

1,640

–203

1,952

23.6

1.36

0.70

5.2

2,091

2,994

1,481

26.7

1.73

0.80 5

428,287

435,520

1 EBIT / revenue.
2 After deduction of non-controlling interests. Prior-year amount adjusted
3 Calculation
Group Management Report, page 61.
4 Basic earnings per share. Prior-year amount adjusted.
5 Proposal.
6 Average FTE s.

Note 4.

GROUP MANAGEMENT
REPORT

19 – 106

G
r
o
u
p
M
a
n
a
G
e
M
e
n
t

r
e
p
o
r
t

GROUP MANAGEMENT REPORT

Business model and organisation
Business units and market positions

21 GENERAL INFORMATION
21
24
31 Objectives and strategies
36 Group management
38 Disclosures required by takeover law
42

Remuneration of the Board of Management
and the Supervisory Board
Research and development

43 REPORT ON ECONOMIC POSITION
43 Overall Board of Management assessment

of the economic position
Forecast / actual comparison
Economic parameters
Significant events
Results of operations
Financial position

43
44
48
48
51
60 Net assets
62

Business performance in the divisions

71 DEUTSCHE POST SHARES

74 NON-FINANCIAL FIGURES
Employees
74
78 Health and safety
79
81
83
85

Corporate responsibility
Procurement
Customers and quality
Brands

87 POST-BALANCE-SHEET DATE EVENTS

88 OPPORTUNITIES AND RISKS
88 Overall Board of Management assessment
of opportunity and risk situation

88 Opportunity and risk management processes
92 Opportunities
Risks
94

101 EXPECTED DEVELOPMENTS
101 Overall Board of Management assessment

of the future economic position
Forecast period
Future organisation
Future economic parameters
Revenue and earnings forecast
Expected financial position

101
101
101
104
105
106 Development of further indicators relevant

for internal management

aGroup Management Report

General Information
Business model and organisation

GENERAL INFORMATION

Deutsche Post DHL is the world’s leading mail and logistics services group. The
Deutsche Post and DHL corporate brands represent a one-of-a-kind portfolio of logistics
(DHL) and communications (Deutsche Post) services. We provide our customers with both
easy to use standardised products as well as innovative and tailored solutions ranging
from dialogue marketing to industrial supply chains. About 480,000 employees in more than
220 countries and territories form a global network focused on service, quality and sustain-
ability. With programmes in the areas of environmental protection, disaster management
and education, we are committed to social responsibility.

Business model and organisation

Four operating divisions

Deutsche Post AG is a listed corporation domiciled in Bonn, Germany. The Group
is organised into four operating divisions, each of which is under the control of its own
divisional headquarters and is subdivided into business units for reporting purposes.

We are the only provider of universal postal services in Germany. In our MAIL
division, we deliver domestic and international mail and parcels and we are specialists in
dialogue marketing, nationwide press distribution services and all the electronic services
associated with mail delivery.

Our EXPRESS division offers courier and express services to business and private
customers in more than 220 countries and territories, the most comprehensive network
in the world.

Our GLOBAL FORWARDING, FREIGHT division handles the carriage of goods by
rail, road, air and sea. Our services extend from standardised container transport to
highly specialised end-to-end solutions for industrial projects, and solutions tailored
to specific sectors.

Our SUPPLY CHAIN division provides warehousing, managed transport and value-
added services at every link in the supply chain for customers in a variety of industries.
With Williams Lea we also offer solutions for corporate information and communica-
tions management tailored precisely to the needs of our customers.

We consolidate the internal services that support the entire Group, including
Finance, IT, Procurement and Legal, in our Global Business Services (GBS). This allows
us to make even more efficient use of our resources whilst reacting flexibly to the rapidly
changing demands of our business and our customers.

Group management functions are centralised in the Corporate Center.

Glossary, page 218

Deutsche Post DHL 2013 Annual Report

General Information
Business model and organisation

Group Management Report

a.01 Organisational structure of Deutsche Post DHL

Corporate Center

Finance, Global
Business Services
Board member
• Lawrence Rosen

Functions
• Corporate Controlling
• Corporate Finance
• Global Business
Services: Procure-
ment, Real Estate,
Finance Operations,
Legal Services, etc.
• Investor Relations
• Corporate Account-
ing & Reporting
• Corporate Audit &

Security

• Taxes

Ceo
Board member
• Dr Frank Appel

Functions
• Board Services
• Corporate First Choice
• Corporate Legal
• Customer Solutions &

Innovation

• Corporate Office
• Corporate

Development

• Corporate Heritage &
Industry Associations

• Corporate Commu-
nications & Respon-
sibility

• Corporate Public

Policy & Regulation
Management

Divisions

GLoBaL
ForWarDInG,
FreIGHt
Board member
• Roger Crook

Business units
• Global

Forwarding

• Freight

suppLY CHaIn
Board member
• Bruce Edwards

Business units
• Supply Chain
• Williams Lea

Human Resources
Board member
• Angela Titzrath

MaIL
Board member
• Jürgen Gerdes

eXpress
Board member
• Ken Allen

Regions
• Europe
• Americas
• Asia Pacific
• MEA (Middle
East and
Africa)

Business units
• Mail Communi-

cation
• Dialogue
Marketing
• Press Services
• Parcel

Germany

• Retail Outlets
• Global Mail
• Pension Service

Functions
• HR MAIL
• HR EXPRESS
• HR GLOBAL

FORWARDING,
FREIGHT

• HR SUPPLY CHAIN
• HR Headquarters &

International Services,
GBS & CSI

• Corporate Executives &
Talent Management
• Industrial Relations,

Civil Servants
• Compensation &

Benefits

• HR Performance &

Programs

Organisation in Human Resources board department adjusted

We made adjustments to the Human Resources board department in the reporting
year in order to meet changed requirements across all business units. It now comprises
the functions “HR MAIL”, “HR EXPRESS”, “HR GLOBAL FORWARDING, FREIGHT”, “HR
SUPPLY CHAIN”, “HR Headquarters & International Services, GBS & CSI”, “Corporate
Executives & Talent Management”, “Industrial Relations, Civil Servants”, “Compensa-
tion & Benefits”, and “HR Performance & Programs”.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Business model and organisation

A presence that spans the globe
Deutsche Post DHL operates around the world. The map shows our most important

Further information, page 220 f.

locations.

Table A.02 provides an overview of market volumes in key regions. Our market

shares are detailed in the business units and market positions chapter.

Page 24 ff.

a.02 Market volumes 1

Global

Air freight (2012): 24m tonnes 2

Ocean freight (2012): 34m TEU s 3

Contract logistics (2012): €159bn 4

International express market (2011): €22bn 5

Germany

Mail communication (2013): €4.5bn 6

Dialogue marketing (2013): €17.2bn 6

Parcel (2013): €8.2bn 6

Americas

Europe

Middle East /Africa

Asia Pacific

Air freight
(2012): 6.4m tonnes 2

Ocean freight
(2012): 6.0m TEU s 3

Contract logistics
(2012): €46.1bn 4

International
express market
(2011): €7.4bn 5

Air freight
(2012): 4.1m tonnes 2

Ocean freight
(2012): 5.1m TEU s 3

Contract logistics
(2012): €59.6bn 4

International
express market
(2011): €6.8bn 5

Road transport
(2012): €174bn 7

Air freight
(2012): 1.5m tonnes 2

Ocean freight
(2012): 2.8m TEU s 3

Contract logistics
(2012): €4.6bn 4

International
express market
(2011): €0.3bn 5

Air freight
(2012): 11.6m tonnes 2

Ocean freight
(2012): 19.3m TEU s 3

Contract logistics
(2012): €49.1bn 4

International
express market
(2011): €7.5bn 5

1 Regional volumes do not add up to global volumes due to rounding.
2 Data based solely on export freight tonnes. Source: Copyright © IHS, 2013. All rights reserved.
3 Twenty-foot equivalent units; estimated part of overall market controlled by forwarders.

4 Source: Transport Intelligence.
5 Includes express product Time Definite International. Country base: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT,
NL, NO, PL, RU, SE, TR, UK (Europe); AR, BR, CA, CL, CO, CR, MX, PA, VE, US (Americas); AU, CN, HK, ID, IN,
JP, KR, MY, NZ, SG, TH, TW, VN (Asia Pacific); AE, ZA (Middle East /Africa). Latest available market study.
Source: Market Intelligence, 2012, annual reports and desk research.

6 Company estimates.
7 Country base: total for 19 European countries, excluding bulk and specialties transport.

Source: MRSC MI Freight Reports 2008 to 2012, Eurostat 2010.

Deutsche Post DHL 2013 Annual Report

General Information
Business units and market positions

Group Management Report

Business units and market positions

MAIL DIVISION

The postal service for Germany

As Europe’s largest postal company, we deliver more than 64 million letters every
working day in Germany alone. We offer all types of products and services to both
private and business customers, ranging from physical, hybrid and electronic letters
and merchandise to special services such as cash on delivery and registered mail. Our
E-Postbrief product provides a secure, confidential and reliable platform for electronic
communication. It allows companies, public authorities and private individuals to send
secure communications whilst reducing processing costs.

For the first time in 15 years, we raised the prices of our Standardbrief and Maxi-
brief letter products with effect from 1 January 2013. Last year, we were required by the
Bundesnetzagentur (German federal network agency) to adjust the qualifying conditions
for the delivery of identical invoices. As a result, we discontinued our Infobrief product.
Some customers now send traditional letters as an alternative, which has increased
revenue in the domestic market for mail communication.

In the reporting year, the market for business communications was approximately
€4.5 billion (previous year: €4.2 billion). In order to more precisely reflect actual market
conditions, we look at the competitive business customer market. We therefore indicate
those companies that are service providers to business customers, i. e., both competitors
who offer end-to-end solutions as well as consolidators who offer partial services. At
64.7 % our market share was slightly above the prior-year level (62.7 %), primarily
because customers have been increasingly sending traditional letters since the Infobrief
product was discontinued.

Targeted and cross-media advertising

Companies can use our solutions to design and print advertising mail themselves
and send it at reasonable rates via our network. We provide our customers with online
tools and services to ensure the quality of their addresses and the efficient identification
of target groups. Companies may rent the addresses of these identified target groups
from us for their own advertising campaigns as needed. We also offer a broad range of
digital solutions, which customers can use for cross-media and targeted advertising. The
German dialogue marketing market comprises advertising mail along with telephone
and e-mail marketing. In 2013, this market shrank by 2.8 % year-on-year to a volume
of €17.2 billion (previous year: €17.7 billion). The mail-order industry, in particular,
considerably reduced advertising expenditure. The insolvencies of Neckermann and
the do-it-yourself chain Praktiker were also felt. Our share of this highly fragmented
market declined to 12.8 % (previous year: 13.5 %), a result that is also a consequence of
the discontinuation of our Infobrief product.

Press distribution services

We deliver newspapers and magazines nationwide throughout Germany on the day
specified by the customer. Our Press Services business unit offers customers two main
products for this: preferred periodicals, which is the traditional method publishers use to
post the publications to which their customers have subscribed, and standard periodicals,
which companies primarily use to distribute customer or employee magazines via our

a.03 Domestic mail communication
market, business customers, 2013

Market volume: €4.5 billion

35.3 % Competition

64.7 % Deutsche Post

Source: company estimate.

a.04 Domestic dialogue
marketing market, 2013

Market volume: €17.2 billion

12.8 % Deutsche Post

87.2 % Competition

Source: company estimate.

Glossary, page 218

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Business units and market positions

network. We also partner with publishers to sell subscriptions to more than 500 press
products both online and offline as part of our Deutsche Post Leserservice, a service that
has seen much success.

The German press services market had a total volume of 14.8 billion items in 2013, a
decline of 2.0 % from the prior year. Consumer and specialist magazine circulation, in par-
ticular, has decreased. Our competitors are mainly companies that deliver regional daily
newspapers. In an overall shrinking market, we continued to maintain our share at 11.4 %.

Parcel business focuses on customer needs

With over 13,000 retail outlets, around 2,650 Packstations and around 1,000 Paket-
boxes we offer our customers the densest drop-off network in Germany. 10,000 Paket-
shops were added in the reporting year; another 10,000 are to follow by the end of 2014.
On the whole we transport more than 3.4 million parcels and small packages within
Germany every working day. Volumes are growing as are customer demands. Through-
out our innovations in our parcel business, customers are always in focus.

Recipients have the option to choose where their parcel should be delivered. They
are notified of the day on which delivery will take place – and in many regions the
delivery time as well. Our courier service even provides same-day parcel delivery and
evening delivery within a delivery window of the customer’s choice.

We are expanding the logistics platform, allowing business customers to grow their
online retail business even more quickly: small and medium-sized retailers can take
advantage of an additional sales channel at our shopping portal, MeinPaket.de. On
request, we can even cover the entire supply chain – from warehouse logistics to returns
management. We are developing the online food retailing segment at our online super-
market, Allyouneed.com, and our 2-Mann-Handling offers a solution for delivering
furniture ordered online.

The German parcel market volume totalled around €8.2 billion in 2013, nearly 5.1 %
more than the prior year. For years now, e-commerce has been the most important driver
of growth. In 2013, business customer volumes again experienced very strong growth
and had a positive impact on growth in the mail-order and parcel services businesses.
Overall, our market share in the reporting year was approximately 42.3 %.

Sending mail and parcels internationally

We carry mail and parcels across borders and offer international dialogue market-
ing services. In addition, we serve business customers in key domestic mail and parcel
markets, including in the United States and China.

We set ourselves apart from the competition by offering innovative products. For
example, we are developing international shipping solutions for private consumers
(B2C) in the growing e-commerce sector. This now includes a returns solution for
24 European countries. Our offer also comprises consulting and services for all phys-
ical and digital dialogue marketing needs. Furthermore, we offer international physical,
hybrid and electronic written communications for international business customers,
giving them the flexibility to decide what best suits their needs. Foreign customers tap
into our expertise and experience in order to do business successfully in the German
market. The global market volume for outbound international mail was approximately
€6.7 billion in 2013 (previous year: €6.8 billion). The decline in light-weight letters and
press products could only be compensated for in part by the increase in heavier items.
Our market share remained stable at the prior-year level of 15.8 %.

a.05 Domestic press services
market, 2013

Market volume: 14.8 billion items

11.4 % Deutsche Post

88.6 % Competition

Source: company estimate.

a.06 Domestic parcel market, 2013

Market volume: €8.2 billion

42.3 % DHL

57.7 % Competition

Source: company estimate.

a.07 International mail market
(outbound), 2013

Market volume: €6.7 billion

15.8 % DHL

84.2 % Competition

Source: company estimate.

Deutsche Post DHL 2013 Annual Report

General Information
Business units and market positions

Group Management Report

EXPRESS DIVISION

Leading provider of international express services

In the EXPRESS division, we transport urgent documents and goods reliably and on
time from door to door. Our network spans more than 220 countries and territories, in
which some 100,000 employees provide services for more than 2.7 million customers.
As a global network operator that applies standardised processes, we are constantly
optimising our service to keep our customer commitments and respond specifically
to customers’ wishes. All of this makes us the leading provider of international express
services.

Our core business is time-definite shipments

International time-definite courier and express shipments are our core business.
Our main product, Time Definite International (TDI), offers delivery as fast as possible.
Customers in more than 180 countries can now purchase our premium Time Definite
product with guaranteed pre-12 delivery and money-back guarantee. Our portfolio is
complemented by industry-specific services such as Medical Express and Collect and Return,
the latter of which is used in particular by customers in high-tech industries. Technical
products are collected from the user, taken in for repairs and then returned. DHL has also
increased activities for customers in the Life Sciences & Healthcare sector. We offer var-
ious types of thermal packaging for temperature-controlled, chilled and frozen content.

Our virtual airline

With an annual average of 3.1 million transported tonnes, DHL is one of the leading
international air freight carriers. Our network consists of several airlines, some of which
we own 100 %.

This combination of our own and purchased capacities, which include varied terms
of contract, allows us to respond flexibly to fluctuating demand. We do not enter into
long-term capacity obligations until our demand for cargo space exceeds the existing
offering. We use the available cargo space for our main product TDI as part of long-term
contracts – Block Space Agreements – and we sell excess capacity on the air freight market.
The largest buyer of this is the DHL Global Forwarding business unit.

We expanded services and capacities in the reporting year to meet rising trade
volumes. Additional routes were opened between Asia and the United States as well
as within Asia. As a result, we guarantee, amongst other things, next-day delivery for
shipments sent from Japan to all destinations in the United States. In the reporting
year, we completed the conversion of 18 Airbus A 300-600 passenger planes into cargo
planes, a project that began in 2011. The aircraft are now part of our regional fleets and
are used mainly in Europe.

Glossary, page 218

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Business units and market positions

International express business has increased

The international express business benefited in the reporting year, amongst other
things, from the overall stabilisation of the economy, the increase in e-commerce and
the growing importance of small and medium-sized enterprises in international trade.
The strong growth of our TDI product compared with the market indicates that we
maintained our position as global market leader.

Positive development in the Europe region

Despite modest economic momentum the express business in the Europe region
witnessed positive development. We were clearly the leading provider in 2011. In order
to meet growing volumes in the future, we began work at the end of 2013 to double
the capacity of our global hub in Leipzig, Germany. With improved service quality, we
intend to strengthen our position at this strategically important location.

Geared for growth in the Americas

Given the economy’s solid performance, our express business in the region was also

successful in the reporting year, as illustrated on page 66.

In the summer of 2013 we opened our expanded hub in Cincinnati, and, with a total
investment of US$105 million, we are thus prepared for future growth, particularly in
the small and medium-sized customer segment. We have also invested in Latin America,
especially in Mexico and Brazil, the largest economies in the region.

Asia remains an important market

Asia remains an important and profitable market for us and it is expected that our

leading position will have been further solidified there in the reporting year.

At our North Asia Hub in Shanghai, we are the first company in the region to be
permitted to offer the sorting of international transit shipments, a service which we have
provided since the fourth quarter of 2013. This not only expands our service but also
improves the utilisation of the hub.

Reliable partner in the Middle East

Business in the Middle East remained particularly difficult in the reporting year,
given the political unrest in Afghanistan, Yemen, Bahrain, Libya and Syria. Whilst
adhering to legal requirements and ensuring the safety of our employees, we maintained
our operations and therefore proved ourselves a reliable partner to our customers.

We are continuing to strengthen our presence in the Middle East through invest-
ments in Egypt, Saudi Arabia and Dubai, where we began construction of a logistics
centre in the first quarter of 2013. The facility covering roughly 17,000 m² located near
Dubai is intended to improve services for customers who import and export goods
into and out of the United Arab Emirates. Together with our partner, MGE Middle East
General Enterprise L. L. C., we shall invest around €20 million in the location and thus
further expand our leading position in the area.

a.08 European international express
market, 2011 1, 2, 3: top 4

Market volume: €6,813 million

10 % FedEx

14 % TNT

23 % UPS

41 % DHL

1 Includes the TDI express product.
2 Country base: AT, BE, CH, CZ, DE, DK, ES, FR, IL, IT,

NL, NO, PL, RU, SE, TR, UK.

3 Latest available market study.

Source: Market Intelligence 2012, annual reports
and desk research.

a.09 The Americas international express
market, 2011 1, 2, 3: top 4

Market volume: €7,352 million

1 % TNT

16 % DHL

30 % UPS

50 % FedEx

1 Includes the TDI express product.
2 Country base: AR, BR, CA, CL, CO, CR, MX, PA,

VE, US.

3 Latest available market study.

Source: Market Intelligence 2012, annual reports
and desk research.

a.10 Asia Pacific international express
market, 2011 1, 2, 3: top 4

Market volume: €7,487 million

10 % UPS

14 % EMS

21 % FedEx

40 % DHL

1 Includes the TDI express product.
2 Country base: AU, CN, HK, ID, IN, JP, KR, MY, NZ,

SG, TH, TW, VN.

3 Latest available market study.

Source: Market Intelligence 2012, annual reports
and desk research.

Deutsche Post DHL 2013 Annual Report

General Information
Business units and market positions

Group Management Report

GLOBAL FORWARDING, FREIGHT DIVISION

a.11 Air freight market, 2012: top 4

The air, ocean and road freight forwarder

The Global Forwarding and Freight business units are responsible within the Group
for air, ocean and road freight transport. Our freight forwarding services not only
include standardised transports but also multimodal and sector- specific solutions as
well as individualised industrial projects.

Our business model is very asset-light, as it is based on the brokerage of trans-
port services between our customers and freight carriers. This allows us to consolidate
shipments and purchase cargo space at better conditions. Our global presence ensures
network optimisation and the ability to meet the increasing demand for efficient routing
and multimodal transports.

The leader in a stagnating air freight market

The air freight market stagnated in 2013 despite a slight volume increase in the sec-
ond half of the year compared with the first half. According to IATA, the global airline
industry association, worldwide freight tonne kilometres flown during the reporting
year increased only slightly by 1.4 %. Capacities remained largely stable, whereby the
airlines shifted them from cargo planes to wide-body passenger planes as in the prior
year. Freight volumes were lower overall due to the decline in output in some industry
sectors. Moreover, customers throughout the industry increasingly chose other trans-
port modes. After transporting 2.3 million export freight tonnes in the previous year,
we remained the air freight market leader in 2013.

Ocean freight market experiences surplus capacities and weak demand

Although demand in the ocean freight market remained comparatively weak,
carriers still increased their capacities in the second half of 2013. Ocean carriers are
responding to supply and demand by putting new vessels into operation, limiting the
capacity on offer and adjusting travel speed. The actual freight rates on key trade lanes
remained volatile. Trade on the traditional lanes between Asia and Europe was softer
than expected, whilst north-south trade increased slightly. After transporting 2.84 mil-
lion twenty-foot equivalent units in the previous year, we remained the second-largest
provider of ocean freight services in 2013.

Growth remains slow in European road freight market

In the European road freight market, growth remained slow at an estimated –1 % to
1 % (previous year: 0 % to 2 %). The primary reasons for this were the macroeconomic
environment in Europe and intense competition in this sector. Nevertheless, DHL’s
Freight business unit was able to maintain its market share.

Thousand tonnes 1

801 Panalpina

1,093 Kuehne + Nagel

1,095 DB Schenker

2,327 DHL

1 Data based solely on export freight tonnes.

Source: annual reports, publications
and company estimates.

a.12 Ocean freight market, 2012: top 4

Thousand teu s 1

1,388 Panalpina

1,905 DB Schenker

2,840 DHL

3,473 Kuehne + Nagel

1 Twenty-foot equivalent units.

Source: annual reports, publications
and company estimates.

a.13 European road transport
market, 2012: top 5

Market volume: €174 billion 1, 2

1.2 % Kuehne + Nagel

1.5 % Dachser

1.8 % DSV

2.4 % DHL

3.4 % DB Schenker

1 Country base: total for 19 European countries,

excluding bulk and specialities transport.

2 2011 and 2012 figures have been adjusted with
respect to the MI study 2012 using current
price information.

Source: MI Study DHL 2013 (based on Eurostat,
financial publications, IHS Global Insight).

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Business units and market positions

SUPPLY CHAIN DIVISION

Customer-centric outsourcing solutions in two business units

In our SUPPLY CHAIN division, DHL provides warehousing, managed transport
and value-added services at every link in the supply chain for customers in a variety
of industries. We also offer solutions for corporate information and communications
management tailored precisely to the needs of our customers. The division comprises
the two business units of Supply Chain and Williams Lea.

Integrated end-to-end offering in contract logistics

In the Supply Chain business unit, we provide logistics solutions along the entire
supply chain for customers in a wide variety of sectors. From planning, sourcing, pro-
duction, storage and distribution to returns and recycling, customers rely on us to ensure
a smooth logistics flow.

a.14 Logistics and value-added services along the entire supply chain

Raw
materials

Inbound
transport

Production
flows

Outbound
transport

Warehousing

Distribution

Returns

DHL Supply Chain Services

1 Plan – Laying the foundation

3 Make – Supporting product

5 Deliver – Getting it where it

for a supply chain

manufacturing

needs to be

2 Source – Getting the materials

4 Store & Customise – Getting it

6 Return – Bringing it back when

at the time required

ready to sell

it’s not needed

We offer warehousing, distribution, managed transport and value-added services as
well as business process outsourcing, supply chain management and consulting solutions.
We secure them competitive advantages by ensuring that our customers’ products and
information reach their markets quickly and efficiently. With local insight and global
scale, we support customers in more than 60 countries in optimising their complex
processes.

Our business mainly provides expert solutions in six focus sectors: Consumer, Retail,
Technology, Life Sciences & Healthcare, Automotive and Energy. We manage the supply
chains all the way from the source of supply to the end customer. Flexibility, reliability
and cost efficiency are the key value drivers of our services, which range from inter-
national inbound logistics and warehouse and transport services to packaging and other
value-added services.

Customers in the Technology sector require fast, flexible and efficient supply chains.
In addition, demand for integrated product and service logistics is increasing. Our
portfolio ranges from inbound-to-manufacturing services and warehouse and transport
services to integrated packaging solutions, returns management and technical services.
For a leading manufacturer of printers and multifunctional systems, we handle the

Glossary, page 218

Deutsche Post DHL 2013 Annual Report

General Information
Business units and market positions

Group Management Report

configuration and technical adjustment of the devices in addition to managing and
operating the regional distribution centre in the Europe, Middle East and Africa region.
The result of this integrated solution was a 26 % cost reduction per unit within 18 months.
We are also increasingly providing integrated solutions in the Life Sciences & Health-
care sector, where supply chains and logistics processes are still developing in many parts
of the world. Our offering takes account of steadily rising cost pressure whilst meeting
the high quality standards of our customers.

The Automotive industry is one of our truly global sectors. Production is shift-
ing increasingly to emerging markets such as China, India and Brazil, in which we
already have a strong presence. For our inbound-to-manufacturing, aftermarket logistics and
lead logistics provider solutions, the key factor is our ability to offer a high degree of global
flexibility and reliability whilst further lowering costs.

In the fast-growing Energy sector, DHL provides integrated logistics solutions from
procurement to disposal. Our maintenance, repair and operation services offer stream-
lined supply chain and service solutions that can often substantially reduce costs whilst
significantly increasing maintenance productivity.

A variety of outsourcing solutions for companies

Williams Lea provides services in two areas: marketing solutions and business pro-
cess outsourcing. Document management, marketing and customer correspondence are
amongst the solutions supplied, which we offer to customers in the financial services,
retail, consumer goods, pharmaceutical, publishing, public and legal sectors.

Global market leader in contract logistics

DHL remains the global market leader in contract logistics, with a market share of
8.2 % (2012). This market is highly fragmented: the top ten players only account for
around 22 % of the overall market, the size of which is estimated to be €159 billion. We
lead the market in our key regions of North America, Europe and Asia Pacific and also
enjoy a very strong position in rapidly growing markets such as Brazil, India, China and
Mexico. Thanks to our global expertise and many years of business relationships with
multinational corporations, we are confident that we shall be able to expand further in
these markets.

Williams Lea is the market leader in outsourcing document management and mar-
keting production. This market is also highly fragmented and consists largely of spe-
cialists offering either a very limited set of services or occupying exclusive niches. Due
to our broad range of international services and long-lasting customer relationships,
we again succeeded in building on our leading position during the year under review.
Thanks to DHL’s good customer relationships, Williams Lea was able to gain additional
new business.

Glossary, page 218

a.15 Contract logistics market, 2012:
top 10

Market volume: €159 billion

1 % Ryder
1 % Norbert Dentressangle
1 % Neovia
1 % Sankyu Inc
1 % UPS
1 % SNCF Geodis
2 % Kuehne + Nagel
3 % Hitachi
3 % CEVA

8 % DHL

Source: Transport Intelligence; figures estimated
except for DHL, CEVA, Kuehne + Nagel, Norbert
Dentressangle, Ryder and SNCF Geodis; exchange
rates: as at June 2013.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Objectives and strategies

Group management, page 36 f.

Customers and quality, page 83 ff.

Employees, page 74

Results of operations, page 48 ff.

Objectives and strategies

CORPORATE STRATEGY

Strategy 2015 – our Group-wide framework

In 2009, we introduced our Strategy 2015, which represents the Group-wide frame-
work for our vision, mission, values and objectives. Our guiding principle is to remain
the postal service for Germany and to become the logistics company for the world. The
mission associated with this principle reflects our values and customer promise, namely:
We want to make our customers, employees and investors more successful, we
always show respect, without compromising on results; we make our customers’ lives
easier and we want to be a part of making our world a better place in which to live.
To this end, our strategy pursues three key objectives: we want to become the provider
of choice for customers, the employer of choice for our staff and prospective employees
and an attractive investment for shareholders. Our progress is routinely measured using
indicators relevant for internal management.

In the reporting year, significant progress was again made on a Group-wide basis.
This is reflected, for example, in customer satisfaction rates, the results of our annual
employee opinion survey as well as the development of key financial figures such as EBIT,
EAC and operating cash flow. Our ranking in “Fortune World’s most admired companies
2013” also reflects how satisfied customers and employees are with Deutsche Post DHL:
we come out top in our industry.

In 2014 we shall focus primarily on increasing profitability and generating cash.

a.16 Strategic approaches

Divisional focus

MaIL

eXpress

GLoBaL ForWarDInG, FreIGHt

suppLY CHaIn

Group-wide initiatives

Innovations

Infrastructure

Go to market

Unified corporate culture

Group-wide initiatives complement business strategies

Our divisional business strategies are supplemented by Group-wide strategic initia-
tives which we use as levers to help us achieve our goals. One example is DHL Customer
Solutions & Innovation (CSI). In the reporting year, this unit strengthened our sector
management and, in conjunction with our customers, developed sector-specific products
and services.

Our First Choice management approach helps us to continuously improve
intern al processes. Group-wide, over 30,000 employees have now been certified in
this methodology.

Deutsche Post DHL 2013 Annual Report

General Information
Objectives and strategies

Group Management Report

STRATEGY AND GOALS OF THE DIVISIONS

Strategic priorities of the divisions

The priorities of the operating divisions are anchored in the divisional business

strategies. Here, too, our focus is on strengthening our profitability.

a.17 Strategic priorities by division

MaIL

eXpress

Sustainably stabilise EBIT through improved
efficiency and investments in the growing parcel
business

MaIL anD parCeL strateGY

Growing continuously with the TDI product
and improving service, whilst optimally utilising
the network and increasing yield

FoCus

GLoBaL ForWarDInG,
FreIGHt

Introducing a forward-looking operating model
and growing sustainably in the difficult market
environment

GooD to Great

suppLY CHaIn

Growing profitably using expertise in outsourcing
and emerging markets

GroWtH tHrouGH eXCeLLenCe

MaIL division

The following strategic approaches are how we aim to meet the business challenges

of today and tomorrow.

Making costs more flexible: To achieve this goal, we are adapting our networks to
changing market conditions and shipment structures. We are also cutting costs wherever
possible and sensible, whilst investing in growth areas. Furthermore, we want to further
increase the quality of our products, whilst protecting the environment in the process.
For example, we commissioned the development of an electric delivery vehicle that pre-
cisely meets the needs of our delivery staff whilst improving our carbon footprint and
reducing operating costs. Our Parcel 2012 Production Concept has made our sorting
and transport more efficient and thereby lowered costs.

Providing the highest quality to our customers: We want to offer our customers the
best service at all times, at the highest level of quality and at reasonable prices. To this
end, we are modernising the sorting equipment and IT architecture in our mail network
on an ongoing basis. We are also investing in our parcel network and adapting it to in-
creasing volumes on an ongoing basis. Our goal is also to deliver 95 % of all items sent in
Germany to customers the next day. Moreover, we are constantly offering more services
to parcel recipients, for example, package notification, shipment status and preferred
location. Proximity to our customers is important to us, which is why we operate by far
the largest network of fixed-location retail outlets in Germany. We are also expanding
our successful co-operation with retailers, particularly by way of our Paketshops.

Motivating our workforce: The key to high quality and high performance is happy
and dedicated employees. That’s why we equip our workforce with state-of-the-art tools,
provide mail carriers with e-bikes and e-trikes, offer counselling on health issues and, at
some locations, make childcare available. The most recent collective agreement included
another noticeable wage increase, raising our levels even higher above the competition.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Objectives and strategies

Glossary, page 218

Customers and quality, page 84

Tapping into new online and offline markets: We are taking advantage of our expertise
in physical communications to offer competent digital communications. The inter net is
already strongly facilitating customer access to our services, allowing them to calculate
and purchase postage and also locate retail outlets and Packstations online and by mobile
telephone. We are also investing in future growth areas in all our businesses: beyond
our E-Postbrief product, we are active in the growing industry of online advertising.
We operate Europe’s largest platform for targeting (online advertising space marketing),
provide the largest online German marketplace for journalistic content and are the first
parcel delivery service in Germany to operate its own shopping portal. By acquiring
Allyouneed.com we have established an online supermarket, where together with retail
customers we are trialing same-day food delivery. At MeinPaket.de we offer one of the
largest online marketplaces in Germany. We have taken our expertise in transport and
network management into the deregulated coach market with the ADAC Postbus. In
2014, we shall operate additional lines, and in the future we intend to offer this service
nationwide in Germany.

eXpress division

As part of our strategic programme FOCUS, we have expanded our business and
increased our market share in recent years. In the reporting year, our attention was
focused on strengthening our profitability.

Managing revenue and costs: Our return on sales rises when growing volumes lead
to economies of scale in the network; when innovations and automation improve pro-
ductivity and costs are strictly managed. We minimise indirect costs through simplified
and standardised processes. For example, we are streamlining our IT system architecture
step-by-step.

Structuring sales and prices: Using global campaigns, we specifically target small and
medium-sized businesses which could benefit the most from exporting. We concentrate
upon items whose size and weight optimally match our network and thereby create
economies of scale. In terms of our pricing policy, we encourage global co-ordination
and discipline. We also work to continuously improve our customer approach. Our
Insanely Customer Centric Culture initiative is intended to fix problems faster and meet
customer expectations more effectively.

Managing the network: Most of our costs are attributable to the air and ground net-
work. We replace aeroplanes with newer, more efficient, and thus more cost-saving air-
craft. We sell available cargo space to freight and forwarding companies, thus improving
our network utilisation and reducing costs. On the ground, we are automating and
standardising processes. For instance, vehicles are equipped by default with shelves and
can be loaded directly from the conveyor belt. We also plan our pickup and delivery
routes to maximise time and cost savings.

Motivating our employees: Our established Certified International Specialist (CIS)
training programme ensures that all our employees have the requisite knowledge of
the international express business at their disposal. Training is carried out by our own
employees, including executives, for specific functions as well as on a cross-functional
basis. This adds to mutual understanding whilst reinforcing a team atmosphere and
loyalty within the division. The Certified International Manager (CIM) module is for
managers and is intended to strengthen the unified leadership culture within the divi-
sion. We want to sustainedly motivate our employees around the world. Systematic and
continuous recognition of outstanding performance is one way of contributing to this.

Deutsche Post DHL 2013 Annual Report

General Information
Objectives and strategies

Group Management Report

GLoBaL ForWarDInG, FreIGHt division

We are already well positioned in our markets due to our global product offering in
air and ocean freight and in overland transport. We aim to consistently achieve growth
that exceeds the market average and consolidate our leading position. To achieve this
goal, we pursue several approaches:

Developing new customer solutions: We are constantly developing new products and
services to meet the needs of all of our customers. In the reporting year, we were the
first company in our industry to introduce a tool that tracks the carbon footprint of
shipments. Customers worldwide now receive a carbon footprint statement via our
web-based Track & Trace service. Our Flexitank product now allows customers in all
regions to efficiently transport large quantities of non-hazardous liquids. Shipments
are dispatched in a standard container, which is simultaneously more economical and
environmentally friendly. DHL Thermonet represents the launch of a global air freight
service tailored to the Life Sciences & Healthcare sector. Customers in this sector can
manage their temperature-sensitive shipments, such as pharmaceuticals and medical
devices, using a transparent and regulatory-compliant platform.

Building up a comprehensive transport network: For a freight forwarding company
of our proportions, it is essential we continuously expand and optimise our network
and operations. We continue to focus our efforts in this area on the growth markets
of Brazil, Russia, India, China and Mexico. In 2013, we expanded the largest trade
lanes between Europe, the Middle East and Africa. We also established a new office in
Myanmar / Burma, from which we can better tap into the trade between ASEAN countries.
Furthermore, we expanded the intra-regional LCL lanes between the Americas – mainly
Latin America – and Asia. To optimise our network, we introduced intermodal road-rail
transport between Asia and Europe.

Simplifying and standardising processes: Our strategic project New Forwarding
Environ ment (NFE) made good progress in the reporting year. The aim is to develop
a forward-looking operating model with efficient processes and state-of-the-art IT
systems, which is intended to underpin our position as industry leader. Moreover, we
shall be able to manage our processes better, standardise products and offer modular
services. In future we intend to have a globally harmonised and unified organisation
with dedicated customer service. Customers will benefit from shorter response times,
products tailored to their needs and targeted communication. We are increasing the
transparency and quality of data for sales volumes, customer figures, capacities, oper-
ations and freight. A test phase of this new operating model has been underway in New
Zealand since the fourth quarter of 2013. We intend to roll the NFE project out through-
out the entire Global Forwarding business unit over the next two years.

Glossary, page 218

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Objectives and strategies

suppLY CHaIn division

Our Growth Through Excellence strategy is aimed at steadily improving our existing

business and achieving profitable growth in key sectors.

Steadily improving existing business: We have established three programmes to
continuously increase our performance, efficiency and competence. The first of these,
known as Operations Excellence, promotes operational and technical standards aimed at
guaranteeing the sustainability of our performance. We also apply the proven First Choice
methodology to sustain the achievements we have realised and improve on them even
further. Our Cost Leadership initiative is intended to significantly reduce costs and
manage them effectively in order to increase our overall profitability. We achieve this by
leveraging purchasing efficiency, operational discipline and best practices. As a result,
we succeeded in further reducing our direct costs in 2013. Our Organisational Capability
programme develops leadership qualities and enhances employee commitment. We
want to attract new talent and retain and develop our existing talent. To this end, we
have launched a top talent management programme.

Growing profitably in focus sectors: We have established three programmes to further
our growth. In the Sector Focus programme, we are deepening our expertise on an
ongoing basis throughout our six focus sectors. Dedicated global sector teams offer our
customers comprehensive sector-specific solutions along the entire supply chain and
ensure an exchange of knowledge on best practices across regions and business units.
In our Strategic Products Replication programme, we develop and reproduce logistics
solutions aimed at simplifying customers’ business processes. In doing so, we apply our
proven standards and practices. One example is our Technical Services, which are pro-
cesses integrated into the respective supply chain solutions and which we use to shorten
repair cycles and thus notably reduce our technology customers’ warehouse and trans-
port costs. Thus far, in addition to Technical Services, we have replicated the following
strategic products worldwide: Airline Business Solutions, E-Fulfilment, Environmental
Solutions, Lead Logistics Provider, Life Sciences & Healthcare Platform, Maintenance,
Repair & Operations and Packaging Services. With our Sales Effectiveness programme,
we are increasing the performance of our sales organisation by bolstering sales and
customer support, learning to better understand our customers’ business objectives and
inquiring regularly as to their satisfaction.

Corporate strategy, page 31

Business units and market

positions, page 29 f.

Deutsche Post DHL 2013 Annual Report

General Information
Group management

Group Management Report

Group management

FINANCIAL PERFORMANCE INDICATORS

Impact on management salaries

Deutsche Post DHL uses both financial and non-financial performance indicators
in its management of the Group. The monthly, quarterly and annual changes in these
indicators are compared with the data from the prior year as well as the data indicated
in the plan to assist in making management decisions. The year-to-year changes in
financial and non-financial performance metrics portrayed here are also relevant for
calculating management remuneration.

The Group’s financial performance indicators are intended to preserve a balance
between profitability, efficient use of resources and sufficient liquidity. The performance
of these indicators in the reporting year is described in the Report on economic position.

Page 43 ff.

a.18 eBIt calculation

Profit from operating activities measures earnings power

Revenue

Other operating income

Materials expense

Staff costs

Depreciation, amortisation

and impairment losses

Other operating expenses

The profitability of the Group’s divisions is measured using profit from operating
activities (EBIT). EBIT is calculated by taking revenue and other operating income and
subtracting materials expense and staff costs, depreciation, amortisation and impair ment
losses and other operating expenses. Interest and other finance costs / other financial
income are deducted from or added to net financial income / net finance costs. To be
able to compare divisions, the return on sales is calculated as the ratio of EBIT to revenue.

Profit from operating activities (eBIt)

eBIt after asset charge promotes efficient use of resources

a.19 eaC calculation

EBIT

Asset charge

= Net asset base
× Weighted average cost of capital

eBIt after asset charge (eaC)

a.20 Net asset base calculation

Operating assets

• Intangible assets
• Property, plant and equipment
• Goodwill
• Trade receivables

(part of net working capital)

• Other non-recurring operating assets

Operating liabilities

• Operating provisions

(without provisions for pensions
and similar obligations)

• Trade payables

(part of net working capital)
• Other non-recurring operating

liabilities

Net asset base

Since 2008, the Group has used EBIT after asset charge (EAC) as an additional key
performance indicator. EAC is calculated by subtracting a cost of capital component, or
asset charge, from EBIT. Making the asset charge a part of business decisions encourages
all divisions to use resources efficiently and ensures that the operating business is geared
towards increasing value sustainably whilst generating cash flow.

To calculate the asset charge, the net asset base is multiplied by the weighted average
cost of capital (WACC). The asset charge calculation is performed each month so that
fluctuations in the net asset base can also be taken into account during the year.

All of our divisions use a standard calculation for the net asset base. The key com-
ponents of operating assets are intangible assets, including goodwill, property, plant and
equipment and net working capital. Operating provisions and operating liabilities are
subtracted from operating assets.

The Group’s WACC is defined as the weighted average net cost of interest-bearing
liabilities and equity, taking into account company-specific risk factors in accordance
with the Capital Asset Pricing Model.

A standard WACC of 8.5 % is applied across the divisions, and this figure also
represents the minimum target for projects and investments within the Group. The
WACC is generally reviewed once annually using the current situation on the financial
markets. However, the goal is not to match every short-term change but to reflect long-
term trends. To ensure better comparability with previous years, the EAC was maintained
at a constant level in 2013, as in the previous year.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Group management

Preserving sufficient liquidity

In the reporting year, cash flow was used as an additional financial performance
indicator for calculating management remuneration. This performance metric is tar-
geted at maintaining sufficient liquidity to cover all of the Group’s financial obligations
from debt repayment and dividends, in addition to operating payment commitments
and investments.

Cash flow is calculated using the cash flow statement. Along with EBIT and EAC,
operating cash flow (OCF) is the main performance and incentive metric used by Group
manage ment. OCF includes items that are directly related to operating value creation. It
is calculated by adjusting EBIT for changes in fixed assets (depreciation, write-ups, gains
and losses from disposals), other non-cash income and expense, taxes paid, changes in
provisions and other non-current assets and liabilities. Net working capital remains as
a driver of OCF. Effective management of net working capital is an important way for
the Group to leverage OCF in the short to medium term.

NON-FINANCIAL PERFORMANCE INDICATOR

Employee opinion survey result as a management indicator

Our annual, Group-wide employee opinion survey measures how successful we
have been in approaching our goal of becoming the employer of choice for our staff.
Furthermore, the “Active Leadership” indicator in particular is a key management tool
that is used in the calculation of variable salary components for our executives. This
indicator reflects employees’ assessments of leadership competencies of their direct
superiors, such as how they respond to employee expectations or how they motivate
their staff. The results of the employee survey for the reporting year can be found in the
Employees section.

a.21 Calculation of operating cash flow

Consolidated net profit for the period
attributable to shareholders and
non-controlling interests

Income taxes

Net financial income / net finance costs

Net income from associates

eBIt (profit from operating activities)

Depreciation, amortisation and
( reversals of) impairment losses
on non-current assets

Net income / loss from disposal

of non-current assets

Non-cash income and expense

Change in provisions

Change in other non-current assets

and liabilities

Income taxes paid

Net cash from operating activities
before changes in working capital
(net working capital)

Changes in net working capital

Net cash from / used in operating

activities (operating cash flow – oCF)

Page 74

Deutsche Post DHL 2013 Annual Report

General Information
Disclosures required by takeover law

Group Management Report

Disclosures required by takeover law

Disclosures required under sections 289 (4) and 315 (4) of the Handelsgesetzbuch

(HGB – German Commercial Code) and explanatory report

Composition of issued capital, voting rights and transfer of shares

As at 31 December 2013, the company’s share capital totalled €1,209,015,874 and was
composed of the same number of no-par value registered shares. Each share carries the
same statutory rights and obligations and entitles the holder to one vote at the Annual
General Meeting (AGM). No individual shareholder or group of shareholders is entitled
to special rights, particularly rights granting powers of control.

The exercise of voting rights and the transfer of shares are based on the general legal
requirements and the company’s Articles of Association, which do not restrict either of
these activities. Article 19 of the Articles of Association sets out the requirements that
must be met in order to attend the AGM as a shareholder and exercise a voting right. Only
persons entered in the share register shall be recognised as shareholders by the company.
The Board of Management is not aware of any agreements between shareholders that
would limit voting rights or the transfer of shares.

Members of the Board of Management receive stock appreciation rights (SAR s)
each year as a long-term remuneration component under the Long-Term Incentive Plan
provided that they each invest cash or Deutsche Post AG shares for each tranche of the
plan. If a Board of Management member sells the shares included in their personal invest-
ment for the tranche or disposes of their personal cash investment before the scheduled
waiting period of four years has expired, all SAR s from that tranche will be forfeited.

As part of the Share Matching Scheme, participating Group executives are obligated
to use a portion of their annual bonus to purchase shares in the company. According
to the underlying terms, shares acquired under the scheme are subject to a four-year
lock-up period.

Shareholdings exceeding 10 % of voting rights

KfW Bankengruppe (KfW), Frankfurt am Main, is our largest shareholder, holding
around 21.0 % of the share capital. The Federal Republic of Germany holds an indirect
stake in Deutsche Post AG via KfW. According to the notifications we have received
pursuant to sections 21 et seq. of the Wertpapierhandelsgesetz (WpHG – German
Securities Trading Act), KfW and the Federal Republic of Germany are the only share-
holders that own more than 10 % of the share capital, either directly or indirectly.

Appointment and replacement of members of the Board of Management

The members of the Board of Management are appointed and replaced in accord-
ance with the relevant legal provisions (sections 84 and 85 of the Aktiengesetz (AktG –
German Stock Corporation Act) and section 31 of the Mitbestimmungsgesetz (MitbestG –
German Co-determination Act)). In accordance with section 84 of the AktG and section
31 of the MitbestG, appointments by the Supervisory Board shall be for a maximum
term of five years. Re-appointment or extension of the term of office is permitted for a
maximum of five years in each case. Article 6 of the Articles of Association stipulates
that the Board of Management must have at least two members. Beyond that, the num-
ber of board members is determined by the Supervisory Board, which may also appoint
a chairman and deputy chairman of the Board of Management.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Disclosures required by takeover law

Amendments to the Articles of Association

In accordance with section 119 (1), number 5 and section 179 (1), sentence 1 of the
AktG, amendments to the Articles of Association are adopted by resolution of the AGM.
In accordance with article 21 (2) of the Articles of Association in conjunction with
sections 179 (2) and 133 (1) of the AktG, such amendments generally require a simple
majority of the votes cast and a simple majority of the share capital represented on the
date of the resolution. In such instances where the law requires a greater majority for
amendments to the Articles of Association, that majority is decisive. Under article 14 (7)
of the Articles of Association, the Supervisory Board has the authority to resolve amend-
ments to the Articles of Association in cases where the amendments affect only the
wording.

Board of Management authorisation, particularly regarding issue
and buy-back of shares

The Board of Management is authorised, subject to the consent of the Super visory
Board, to issue up to 240 million new, no-par value registered shares on or before
28 May 2018 in exchange for cash and / or non-cash contributions and thereby increase
the company’s share capital by up to €240 million (Authorised Capital 2013, article 5 (2)
of the Articles of Association). When new shares are issued on the basis of Authorised
Capital 2013, the shareholders are entitled in principle to subscription rights. Such rights
may only be disapplied subject to the requirements specified in article 5 (2) of the
Articles of Association and subject to the consent of the Supervisory Board. Details may
be found in article 5 (2) of the Articles of Association of the company.

Authorised Capital 2013 is a financing and acquisition instrument in accordance
with international standards that allows the company to increase equity quickly, flexibly
and cost-effectively. The authorised capital is equivalent to less than 20 % of the share
capital. To date, the Board of Management has not exercised this authority.

An AGM resolution was passed on 25 May 2011 authorising the Board of Manage-
ment, subject to the consent of the Supervisory Board, to issue bonds with warrants,
convertible bonds and / or income bonds as well as profit participation certificates, or
a combination thereof, in an aggregate principal amount of up to €1 billion, on one or
more occasions until 24 May 2016, thereby granting options or conversion rights for up
to 75 million shares having a total share in the share capital not to exceed €75 million.
The aforementioned authorisation was utilised in the full amount in December 2012 by
issuing a convertible bond in the aggregate principal amount of €1 billion.

No shares were issued to the bond holders in financial year 2013. As at 31 Decem-
ber 2013, the share capital was still increased on a contingent basis by up to €75 million
in order to grant shares to the holders or creditors of the options, conversion rights
or conversion obligations arising from the resolution of 25 May 2011 after exercise of
their rights for the purpose of settling the entitlements related to the options or rights
or fulfilling the conversion obligations (Contingent Capital 2011, article 5 (3) of the
Articles of Association).

Deutsche Post DHL 2013 Annual Report

General Information
Disclosures required by takeover law

Group Management Report

An AGM resolution was passed on 29 May 2013 authorising the Board of Manage-
ment, subject to the consent of the Supervisory Board, to issue bonds with warrants,
convertible bonds and / or income bonds as well as profit participation certificates, or a
combination thereof (hereinafter referred to collectively as “bonds”), in an aggregate
principal amount of up to €1.5 billion, on one or more occasions until 28 May 2018,
thereby granting options or conversion rights for up to 75 million shares with a total
share in the share capital not exceeding €75 million. The bond conditions may also
stipulate an obligation to exercise options or conversion rights or may entitle the com-
pany to grant the bond holders or creditors shares in the company in lieu of payment of
all or part of the sum of money owed, either at the time of maturity of the bonds or at
another time. The share capital is increased on a contingent basis by up to €75 million
in order to grant shares to the holders or creditors of the bonds after exercise of their
options or conversion rights or to fulfil their option or conversion obligations, or to
grant them shares in lieu of monetary payment (Contingent Capital 2013, article 5 (4)
of the Articles of Association). When issuing bonds, subscription rights may only be
disapplied subject to the terms of the aforementioned resolution and subject to the
consent of the Supervisory Board. Further details may be found in the motion adopted
by the AGM under agenda item 7 of the AGM of 29 May 2013.

Authorisation to issue bonds is standard practice amongst publicly listed companies.
This allows the company to finance its activities flexibly and promptly and gives it the
financial leeway necessary to take advantage of favourable market conditions at short
notice, for example by offering bonds with options or conversion rights, or conversion
obligations on shares in the company as a consideration within the context of company
mergers, and when acquiring companies or shareholdings in companies. To date, the
Board of Management has not exercised this authority.

Finally, the AGM of 28 April 2010 authorised the company to buy back shares on or
before 27 April 2015 up to an amount not to exceed 10 % of the share capital existing as
at the date of the resolution. Such authorisation is subject to the proviso that at no time
should the shares thus acquired, together with the shares already held by the company,
account for more than 10 % of the share capital. The shares may be purchased through
the stock market, a public offer, a public call for offers of sale from the company’s share-
holders or by some other means in accordance with section 53 a of the AktG. The author-
isation permits the Board of Management to exercise it for every purpose permissible
under the law, particularly to redeem the purchased treasury shares without a further
AGM resolution, subject to the consent of the Supervisory Board. Details may be found
in the motion adopted by the AGM under agenda item 6 of the AGM of 28 April 2010.

In addition to this, the AGM of 28 April 2010 also authorised the Board of Manage-
ment, within the scope resolved by the AGM of 28 April 2010 in agenda item 6, to acquire
treasury shares through the use of derivatives, namely by servicing options that, upon
their exercise, require the company to acquire treasury shares (put options), by exercis-
ing options that, upon their exercise, grant the company the right to acquire treasury
shares (call options) or by servicing or exercising a combination of put and call options.
All share acquisitions using the aforementioned options are limited to a maximum of 5 %
of the share capital existing on the date of the resolution. The term of the options may
not exceed 18 months, must expire by no later than 27 April 2015 and be selected such
that treasury shares may not be acquired by exercising the options after 27 April 2015.
Further details may be found in the motion adopted by the AGM under agenda item 7
of the AGM of 28 April 2010.

Deutsche Post DHL 2013 Annual Report

Group Management Report

General Information
Disclosures required by takeover law

In addition to this, the AGM of 9 May 2012 authorised the Board of Management to
additionally use the shares acquired on the basis of these authorisations to list the com-
pany’s shares on a foreign stock exchange on which the shares have not previously been
admitted for trading on a regulated market, subject to the consent of the Supervisory
Board with subscription rights disapplied. Further details may be found in the motion
adopted by the AGM under agenda item 6 of the AGM of 9 May 2012.

It is standard business practice amongst publicly listed companies in Germany for
the AGM to authorise the company to buy back shares. The authorisation to repurchase
shares using derivatives is merely intended to supplement share buy-back as a tool and
give the company the opportunity to structure share repurchase in an advantageous
manner. The authorisation to use shares for the purpose of listing on a foreign stock
exchange is intended to enable the company to expand its shareholder base to foreign
countries in line with its global orientation.

Any public offer to acquire shares in the company is governed solely by law and the
Articles of Association, including the provisions of the Wertpapiererwerbs- und Über-
nahmegesetz (WpÜG – German Securities Acquisition and Takeover Act). The AGM
has not authorised the Board of Management to undertake actions within its sphere of
competence to block possible takeover bids.

Significant agreements that are conditional upon a change of control following
a takeover bid and agreements with members of the Board of Management
or employees providing for compensation in the event of a change of control

Deutsche Post AG took out a syndicated credit facility with a volume of €2 billion
from a consortium of banks. If a change of control within the meaning of the contract
occurs, each member of the bank consortium is entitled under certain conditions to
cancel its share of the credit line as well as its share of outstanding loans and request
repayment. The terms and conditions of the bond issued under the Debt Issuance
Programme established in March 2012 and of the convertible bond issued in Decem-
ber 2012 also contain change of control clauses. In case of a change of control within the
meaning of the terms and conditions, creditors are, under certain conditions, granted
the right to demand early redemption of the respective bonds. Furthermore, a frame-
work agreement exists concerning the supply of fuel, based on which fuel in the value
of a high double-digit million amount was obtained in the reporting year and which, in
case of a change of control, grants the supplier the right to bring the business relationship
to a close without notice.

In the event of a change of control, any member of the Board of Management is
entitled to resign their office for good cause within a period of six months following the
change of control, after giving three months’ notice at the end of a given month, and
to terminate their Board of Management contract (right to early termination). In the
event the right to early termination is exercised or a Board of Management contract is
terminated by mutual consent within nine months of the change of control, the Board
of Management member is entitled to payment to compensate the remaining term of
their Board of Management contract. Such payment is limited to the cap pursuant to
the recommendation of section 4.2.3 of the German Corporate Governance Code as
amended on 13 May 2013, with the specification outlined in the remuneration report.
With respect to options from the Long-Term Incentive Plan, the Board of Management
member will be treated as if the waiting period for all options had already expired upon
cessation of the Board of Management contract. The options eligible for exercise may
then be exercised within six months of cessation of the contract. With regard to the

Deutsche Post DHL 2013 Annual Report

General Information
Disclosures required by takeover law
Remuneration of the Board of Management and the Supervisory Board
Research and development

Group Management Report

Share Matching Scheme for executives, the holding period for the shares will become
invalid with immediate effect in the event of a change of control of the company. In any
such case, the employer will be responsible for any tax disadvantages resulting from
reduction of the holding period. Exempt from this are taxes normally incurred after
the holding period.

Remuneration of the Board of Management
and the Supervisory Board

Corporate Governance, page 123 ff.

The basic features of the remuneration system for the Board of Management and
the Supervisory Board are described in the Corporate Governance Report under
Remuneration report. The latter also forms part of the Group Management Report.

Research and development

As a service provider, the Group does not engage in research and development
activities in the narrower sense and therefore has no significant expenses to report in
this connection.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Overall Board of Management assessment of the economic position
Forecast / actual comparison

REPORT ON ECONOMIC POSITION

Overall Board of Management assessment
of the economic position

Earnings and operating cash flow increase

Whilst revenue declined slightly, Deutsche Post DHL increased profit from oper-
ating activities by 7.4 % in financial year 2013, due to improved margins. Also, strong
continued growth in the parcel business in Germany resulted in MAIL division earnings
at the upper end of our forecast. Performance in the DHL divisions was impeded by
major currency effects. Although revenue was lower, the EXPRESS and SUPPLY CHAIN
divisions were able to increase earnings through strict cost management. Operating
cash flow also saw an encouraging rise, increasing to around €3 billion. Therefore, in
the opinion of the Board of Management, the Group’s financial position remains good.

Forecast / actual comparison

a.22 Forecast / actual comparison

Targets 2013

Results 2013

Targets 2014

eBIt
Group: €2.7 billion to €2.95 billion 1.
MAIL division: €1.1 billion to €1.2 billion 1.
DHL divisions: €2.0 billion to €2.15 billion.
Corporate Center / Other: around €–0.4 billion.

eBIt
Group: €2.86 billion.
MAIL division: €1.23 billion.
DHL divisions: €2.06 billion.
Corporate Center / Other: €–0.42 billion.

eBIt
Group: €2.9 billion to €3.1 billion.
MAIL division: around €1.2 billion.
DHL divisions: €2.1 billion to €2.3 billion.
Corporate Center / Other: better than €–0.4 billion.

Operating cash flow
Operating cash flow will recover from the one-time
charges in 2012 and benefit from the expected
earnings improvement.

Capital expenditure (capex)
Increase investments from €1.70 billion (2012)
to a maximum of €1.8 billion 2.

eaC
€1,499 million (previous year: €1,331 million) 3.

eaC
Will continue to develop positively and increase
slightly.

Operating cash flow
Net cash from operating activities: €2,994 million
(previous year: cash outflow of €203 million).

Operating cash flow
Will continue to develop positively and increase
slightly.

Capital expenditure (capex)
Invested: €1.76 billion.

Capital expenditure (capex)
Increase investments to around €1.9 billion.

Dividend distribution
Pay out 40 % to 60 % of the net profit as dividend.

Dividend distribution
Proposal: pay out 48.9 % of adjusted net profit
as dividend.

Dividend distribution
Pay out 40 % to 60 % of the net profit as dividend.

Employee opinion survey 4
Key performance indicator “Active Leadership”
achieves an approval rating of 70 %.

Employee opinion survey 4
Increase approval rating of key performance
indicator “Active Leadership” to 71 %.

1 Forecast increased over the course of the year.
2 Forecast narrowed over the course of the year.
3 Prior-year amounts adjusted due to a revised calculation basis.
4 Explanation
Group management, page 37.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Economic parameters

Group Management Report

Economic parameters

Global economy witnesses very cautious growth

The global economy witnessed very cautious growth in 2013. Growth rates lagged
behind the prior-year figures, which were already only marginal, in the industrial
countries as well as the emerging markets. This was a consequence of a weak phase
at the very start of the year. Although the economy then proceeded to recover – quite
significantly in some industrial countries – overall global economic output grew by just
3.0 % in 2013 after adjustment for purchasing power (previous year: 3.1 %). Global trade
increased slightly with a rise of nearly 3 % (IMF: 2.7 %; OECD: 3.0 %).

a.23 Global economy: growth indicators in 2013

China

Japan

USA

Euro zone

Germany

Data partially estimated, as at 5 February 2014.
Sources: Postbank, national statistics.

Gross domestic
product (GDP)

Exports

Domestic
demand

7.7

1.7

1.9

– 0.4

0.4

7.9

1.6

2.8

1.6

0.6

n / a

1.7

– 0.9

0.7

Asian countries again generated the highest economic momentum, with gross
domestic product (GDP) increasing by 6.5 % (previous year: 6.4 %). In China, rising
demand in individual industrial countries led to an increase in exports. The govern-
ment also continued its efforts to boost domestic demand. Total GDP growth remained
on a par with the prior year at 7.7 % (previous year: 7.7 %). The Japanese economy grew
sharply in the first half of the year as a result of expansive monetary and fiscal policies.
These effects waned as the year progressed and the upturn abated somewhat. Growth
in private consumption and government spending as well as rising investments led to
significant growth in domestic demand. Exports were up slightly overall on an annual
average. Despite the strong upward trend, GDP only increased by 1.7 % due to the low
initial base (previous year: 1.4 %).

The US economy suffered from government budget cuts and tax increases at the
start of the year. From spring onwards, however, growth picked up markedly. Along
with an increase in private consumption, growth was also driven by gross fixed capital
formation and housing construction. Foreign trade did not impair growth, but the neg-
ative impact resulting from a significant decline in government spending was notable.
GDP increased by 1.9 % (previous year: 2.8 %).

In the euro zone, economic output was down by 0.4 % in the reporting year
( previous year: –0.7 %). At the beginning of the year, economic output continued to
suffer from the sovereign debt crisis. The consolidation measures put into effect in
some countries slowed not only government spending but also private consumption,
which decreased by 0.6 % on average for the year as unemployment rates proved to
be exceptionally high. Gross fixed capital formation declined by 3.5 % and domestic
demand by 0.9 %. The moderate expansion in foreign trade acted to slow the decrease
in GDP by 0.5 percentage points. Nonetheless, the economy improved over the course
of the year. Growth rates began rising again in the second quarter, a development that
extended to nearly all of the countries in crisis as the year progressed.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Economic parameters

Following a weak start, the German economy was rejuvenated over the course of
2013 with GDP increasing by 0.4 % (previous year: 0.7 %). Foreign trade proved to be a
detrimental factor. Demand from the euro zone was weak and exports to other regions
only moderate. Exports therefore grew by just 0.6 % (previous year: 3.2 %), whereas
growth in imports was more than twice that figure. Gross fixed capital formation declined
by 0.8 % on average for the year (previous year: –2.1 %). Growth was boosted by private
consumption, which rose by 0.9 % (previous year: 0.8 %). The German labour market
remained largely stable. The average annual number of employed workers increased to
41.8 million (previous year: 41.6 million).

Crude oil prices fall slightly

At the end of 2013, a barrel of Brent Crude was US$110.20 (previous year: US$111.48).
The annual average price of oil was just under US$109, a decrease of approximately 3 %
on the prior year. Over the course of the year the price of oil fluctuated between US$96
and US$119. In the first half, the weak global economy had a negative impact on demand
and led to decreasing price levels. In addition, countries not belonging to the Organisa-
tion of Petroleum Exporting Countries (OPEC) – above all the USA – steadily increased
production, which likewise depressed price quotations. This was followed by a revival
in oil prices due to improved growth prospects.

a.24 Brent Crude spot price and euro / us dollar exchange rate in 2013

140

120

100

1.55

1.50

1.45

1.40

1.35

1.30

1.25

1.20

1.15

1.10

1.05

January

March

June

September

December

Brent Crude spot price per barrel in US dollars

Euro / US dollar exchange rate

Euro receives boost from more stable economy

The weak economy and the sharply declining rate of inflation in the euro zone
induced the European Central Bank (ECB) to lower its key interest rate by 0.25 percent-
age points in both May and November to reach 0.25 %. The ECB additionally announced
that it would leave the key interest rate at the current level for some time or lower it even
further. The US Federal Reserve maintained its very expansive monetary policy, stating
that it did not intend to increase its key interest rate from the current 0 % to 0.25 %
until the unemployment rate falls below 6.5 % at the earliest. In December, however, the
US Fed decided to slightly reduce the volume of purchases of government bonds and
mortgage- backed securities in order to give the economy an additional boost.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Economic parameters

Group Management Report

At the start of 2013, the euro and US dollar exchange rates were still under the influ-
ence of the European sovereign debt crisis, which had widened to include Cyprus. This,
in conjunction with the weak euro zone economy, resulted in a drop in the euro to its
annual low of just under US$1.28 in March. Thanks to the gradually improving economy
in the euro zone, fears that the sovereign debt crisis might re-intensify abated over the
course of the year. The euro benefited from this with an increase of 4.2 % to over US$1.37
by the end of the year. Measured against the pound sterling, the euro posted a 2.4 % gain.

Moderate risk premiums for corporate bonds

The bond markets were dominated by the weak economy and the EMU sovereign
debt crisis in the initial months of 2013. In May, the yield on ten-year German govern-
ment bonds fell to an annual low of 1.17 %. Despite the ECB’s reductions in the key interest
rate, capital market interest rates increased during the rest of the year to reach 1.93 %
by the end of 2013 (previous year: 1.32 %). Like German bonds, yields on ten-year US
government bonds also fell initially. However, they then increased sharply in light of
the improving US economy and prospects of tapering bond buying by the US Federal
Reserve. By the end of the year, bond yields had risen by 1.27 percentage points year-
on-year to 3.03 %. Risk premiums for corporate bonds fluctuated at a similarly moderate
level during the reporting year.

International trade continues to grow in emerging markets

The global economy witnessed cautious growth in 2013. Trade volumes (transported
quantity in tonnes) thus only increased by around 1.7 % in the reporting year. The main
consequence of the low demand for goods was a decline in European imports. Trade
between emerging markets in the Asia Pacific, Latin America and Middle East /Africa
regions continued to increase, however.

a.25 Trade volumes: compound annual growth rate 2012 to 2013

Exports

Asia Pacific

Europe

Latin America

MEA (Middle East /Africa)

North America

Imports

Asia Pacific

Europe

Latin America

MEA (Middle
East /Africa) North America

5.1

0.5

9.4

3.9

–1.6

0.0

–1.3

– 4.7

–1.7

0.6

3.2

0.5

4.4

1.8

3.0

3.5

0.8

5.0

3.2

0.7

2.4

–3.1

–3.9

–7.9

0.5

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Economic parameters

A.26 Major trade flows: 2013 volumes

Million tonnes

Europe

2,532

MEA

268

Asia Pacific

2,960

North America

474

Latin America

237

Intra-regional

More than 300

300 to 100

Less than 100

North America
Exports

322

150

237

Imports

215

144

126

299

779

784

Latin America
Exports

101

550

Imports

237

Europe
Exports

Imports

332

556

239

299

464

1,189

384

126

919

311

150

239

1,256

MEA (Middle East /Africa)
Exports

1,363

Imports

236

332

101

Asia Pacific
Exports

739

790

236

311

144

Imports

1,363

556

215

2,185

384

322

550

2,619

MEA

Asia Pacific

Europe

North America

Latin America

Legal environment

In view of our leading market position, a large number of our services are subject
to sector-specific regulation under the Postgesetz (PostG – German Postal Act). Further
information on this issue and legal risk is contained in the Notes to the consolidated
financial statements.

Note 53

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Significant events
Results of operations

Group Management Report

Significant events

No significant events

There were no events with material effects on the Group’s net assets, financial pos-

ition and results of operations in financial year 2013.

Results of operations

a.27 Selected indicators for results of operations

Revenue

Profit from operating activities (EBIT)

Return on sales 1

Consolidated net profit for the period 2

Earnings per share 3

Dividend per share

1 EBIT / revenue.
2 After deduction of non-controlling interests, prior-year amount adjusted.
3 Basic earnings per share, prior-year amount adjusted.
4 Proposal.

€ m

€

2012

55,512

2,665

4.8

1,640

1.36

0.70

2013

55,085

2,861

5.2

2,091

1.73

0.80 4

Changes in portfolio and reporting

The amendments to IAS 19 (Employee Benefits) have been required to be applied
since 1 January 2013. This has in some cases significantly impacted the recognition of
pension plans and partial retirement arrangements in the balance sheet and income
statement. Detailed information can be found in the Notes. The prior-year amounts
have been adjusted.

To improve the transparency of the balance sheet, we broke down the receivables
and other current assets item on the assets side into trade receivables and other current
assets. On the liabilities side, the capital reserves included in the other reserves item are
now shown separately. The prior-year amounts have been adjusted.

We disposed of our domestic express business in Romania by selling our subsidiary
Cargus International S.R.L. with effect from 31 March 2013. Since then, our focus there
has been on international business.

In the SUPPLY CHAIN division, we sold our interests in DHL Fashion (France) SAS,
US company Exel Direct Inc. and ITG GmbH, Germany, together with their subsidiaries
in the second quarter. All of the companies’ assets and liabilities had previously been
reclassified as held for sale.

In the MAIL division, we acquired optivo GmbH, a leading German e-mail market-
ing services provider, on 28 June 2013. This acquisition enhances our range of services
and will allow us to develop our business in this area.

We sold 50 % of our shares in Deutsche Post Mobility GmbH to Allgemeiner
Deutscher Automobil-Club (ADAC) in the second quarter. Since October 2013, we have
jointly operated a coach network and have entered the deregulated coach market with
the “ADAC Postbus”.

Note 4

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Results of operations

We acquired RISER ID Services GmbH, the market leader in electronic address
registration information services, at the end of July. The company complements the
range of digital address verification services offered by the MAIL division.

In the fourth quarter, we increased our interest in the UK company Tradeteam

Limited from 50.1 % to 100 %.

Currency effects cause 0.8 % decline in consolidated revenue

a.28 Consolidated revenue

Consolidated revenue declined slightly by 0.8 % to €55,085 million in financial
year 2013 (previous year: €55,512 million). The proportion of consolidated revenue
generated abroad declined from 69.7 % to 69.0 %, largely due to negative currency
effects of €1,738 million. Changes in the portfolio reduced revenue by €287 million. At
€14,494 million, revenue in the fourth quarter was down 0.6 % year-on-year ( previous
year: €14,577 million). The figure was negatively impacted by currency effects of
€607 million and changes in the portfolio.

Other operating income declined by €207 million to €1,961 million. In the previous
year, provisions relating to the US express business that were no longer required had
been reversed.

€ m

2013

17,074

38,011

2012

16,825

38,687

55,085

55,512

Germany

Abroad

Lower transport costs

Materials expense declined by €651 million to €31,212 million, due in particular to

currency effects.

At €17,785 million, staff costs were on a level with the prior year (€17,770 million).
Labour costs in the MAIL division and the higher number of employees in the SUPPLY
CHAIN division caused staff costs to increase, whilst currency effects reduced this item.
At €1,341 million, depreciation, amortisation and impairment losses also remained

at the previous year’s level (€1,339 million).

Other operating expenses declined by €196 million to €3,847 million. The prior-year

figure had been pushed up by the additional VAT payment, amongst other factors.

a.29 Development of revenue, other operating income and operating expenses

Revenue

€ m

55,085

– 0.8

• Growth trends in the German parcel and international

express businesses remain intact

• Currency effects reduce consolidated revenue

by €1,738 million

Other operating income

1,961

– 9.5 • Previous year also included income from the reversal

Materials expense

Staff costs

31,212

17,785

of provisions for the US express business

–2.0 • Declined due in particular to currency effects

0.1

• Increased number of staff, mostly in the SUPPLY CHAIN

division

• Higher labour costs in the MAIL division
• Currency effects reduce staff costs

Depreciation, amortisation
and impairment losses

1,341

0.1 • On a par with the previous year

Other operating expenses

3,847

– 4.8 • Previous year also included the additional VAT payment

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Results of operations

Group Management Report

a.30 Consolidated eBIt

Consolidated eBIt improves by 7.4 %

€ m

2013

2012

2,861

2,665

Profit from operating activities (EBIT) improved year-on-year, rising by 7.4 % to

€2,861 million. In the fourth quarter, it rose by 7.0 % to €885 million.

Net finance costs improved from €456 million in the previous year to €289 million
in the year under review. In 2012, the figure was impacted by the interest expense asso-
ciated with the additional VAT payment, amongst other things, whereas the gain on the
Postbank disposal made a positive contribution. Interest expenses for provisions for pen-
sions and other provisions declined during the reporting year due to lower interest rates.

Profit before income taxes improved by 16.4 % to €2,572 million.
At €361 million, income taxes were down €86 million on the prior-year figure, partly
because we agreed in the context of a tax audit of outstanding issues from 2006 to 2008
to reverse a tax liability.

Net profit and earnings per share up considerably

Consolidated net profit for the period improved from €1,762 million to €2,211 mil-
lion. Of this amount, €2,091 million is attributable to shareholders of Deutsche Post AG
and €120 million to non-controlling interest holders. Basic and diluted earnings per
share also increased, up from €1.36 to €1.73 and from €1.30 to €1.66, respectively.

a.31 Total dividend and dividend
per no-par value share

€ m

556

0.50

1,087

903

836

846

786

725 725

0.90

0.75

0.70

0.70 0.70

0.65

0.60 0.60

967

0.80

Dividend of €0.80 per share proposed

Our finance strategy calls for a payout of 40 % to 60 % of net profits as dividends as
a general rule. At the Annual General Meeting on 27 May 2014, the Board of Manage-
ment and the Supervisory Board will therefore propose a dividend of €0.80 per share
for financial year 2013 (previous year: €0.70) to shareholders. The distribution ratio
based on the consolidated net profit for the period attributable to Deutsche Post AG
shareholders amounts to 46.2 %. The net dividend yield based on the year-end closing
price of our shares is 3.0 %. The dividend will be distributed on 28 May 2014 and is tax-
free for shareholders resident in Germany.

04 05 06 07 08 09

13 1

eBIt after asset charge increases

Dividend per no-par value share (€)

1 Proposal.

EAC improved from €1,331 million to €1,499 million in 2013, due primarily to the
improved profitability in the MAIL and EXPRESS divisions. The asset charge rose mod-
erately by 2.1 %, which was predominantly attributable to increased capital expenditures
throughout the divisions.

a.32 eBIt after asset charge (eaC)

€ m

EBIT

Asset charge

eaC

1 Prior-year amounts adjusted due to a revised calculation basis.

2012
adjusted 1

2,665

–1,334

1,331

2013

+ / – %

2,861

–1,362

1,499

7.4

–2.1

12.6

In the reporting year, the net asset base saw a slight €106 million decline to
€15,330 million. The changes in working capital resulting from good working capital
manage ment contributed to this decline. Although investments in IT systems, the pur-
chase of freight aircraft and replacement and expansion investments in warehouses,

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Results of operations
Financial position

sorting systems and the vehicle fleet increased year-on-year, they were unable to com-
pensate for the decrease in intangible assets as a result of amortisation and impairment
as well as exchange rate losses.

The decline in operating provisions is due to the utilisation of some of the provi-
sion for postage stamps, amongst other factors. In addition, the decrease in other non-
current assets and liabilities contributed to the decline in the net asset base.

a.33 Net asset base (unconsolidated)

€ m

Intangible assets, property, plant and equipment, and goodwill

Net working capital

Operating provisions (excluding provisions for pensions

and similar obligations)

Other non-current assets and liabilities

Net asset base

1 Prior-year amounts adjusted due to a revised calculation basis.

Financial position

31 Dec. 2012
adjusted 1

31 Dec. 2013

+ / – %

18,860

– 503

–2,825

– 96

15,436

18,698

– 675

–2,633

– 60

15,330

– 0.9

34.2

– 6.8

–37.5

– 0.7

Financial management is a centralised function in the Group

The Group’s financial management activities include managing cash and liquidity;
hedging interest rate, currency and commodity price risk; ensuring Group financing;
issuing guarantees and letters of comfort and liaising with rating agencies. We steer
processes centrally, which allows us to work efficiently and successfully manage risk.

Responsibility for these activities rests with Corporate Finance at Group head-
quarters in Bonn, which is supported by three Regional Treasury Centres in Bonn
( Germany), Weston (USA) and Singapore. These act as interfaces between headquarters
and the operating companies, advise the companies on all financial management issues
and ensure compliance with Group-wide requirements.

Corporate Finance’s main task is to minimise financial risk and the cost of capital,
whilst preserving the Group’s lasting financial stability and flexibility. In order to main-
tain its unrestricted access to the capital markets, the Group continues to aim for a credit
rating appropriate to the sector. We therefore monitor the ratio of our operating cash
flow to our adjusted debt particularly closely. Adjusted debt refers to the Group’s net
debt, allowing for unfunded pension obligations and liabilities under operating leases.

Maintaining financial flexibility and low cost of capital

The Group’s finance strategy builds on the principles and aims of financial manage-
ment. In addition to the interests of shareholders, the strategy also takes lender require-
ments into account. The goal is for the Group to maintain its financial flexibility and low
cost of capital by ensuring a high degree of continuity and predictability for investors.
A key component of this strategy is a target rating of “BBB+”, which is managed via
a dynamic performance metric known as funds from operations to debt (FFO to debt).
Our strategy additionally includes a sustained dividend policy and clear priorities re-
garding the use of excess liquidity, which is to be used to gradually increase plan assets
of our German pension plans as well as paying special dividends or buying back shares.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Financial position

Group Management Report

a.34 Finance strategy

Credit rating

Investors

• Reliable and consistent information

from the company.

• Predictability of expected returns.

Group

• Preserve financial and strategic flexibility.
• Assure low cost of capital (WACC) 1.

• Maintain “BBB+” and “Baa1” ratings, respectively.
• FFO to debt used as dynamic performance metric.

Dividend policy

• Pay out 40 % to 60 % of net profit.
• Consider cash flows and continuity.

Excess liquidity

1. Increase plan assets of German pension plans.
2. Pay out special dividends or execute share buy-back

programme.

Debt portfolio

• Syndicated credit facility taken out as liquidity reserve.
• Debt Issuance Programme established for issuing bonds.
• Issue bonds to cover long-term capital requirements.

1 Weighted average cost of capital

Group management, page 36.

Funds from operations (FFO) represents operating cash flow before changes in
working capital plus interest and dividends received less interest paid and adjusted for
operating leases, pensions and non-recurring income or expenses, as shown in the
following calculation. In addition to financial liabilities and surplus cash and near-
cash investments, the figure for debt also includes operating lease liabilities as well as
unfunded pension liabilities.

a.35 FFo to debt

€ m

Operating cash flow before changes in working capital

Interest and dividends received

Interest paid

Adjustment for operating leases

Adjustment for pensions

Non-recurring income / expenses

Funds from operations (FFo)

Reported financial liabilities

Financial liabilities at fair value through profit or loss

Adjustment for operating leases

Adjustment for pensions

Surplus cash and near-cash investments 2

Debt

FFo to debt (%)

1 To improve comparability, the figures take the transition to the new IAS 19 standard into account.
2 Surplus cash and near-cash investments are defined as cash and cash equivalents and investment funds

callable at sight, less cash needed for operations.

2012 1

219

296

1,243

2,671

3,974

4,816

117

5,187

5,068

1,224

2013

3,078

166

1,240

144

4,425

5,940

5,099

4,941

3,088

13,730

12,852

28.9

34.4

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Financial position

The “FFO to debt” dynamic performance metric rose significantly in the reporting
year compared with the prior year due to the improvement in funds from operations
and the decrease in debt.

Funds from operations increased by €451 million to a total of €4,425 million, pri-
marily due to the increase in operating cash flow before changes in working capital. The
prior-year figure had been negatively impacted by the one-time increase in the plan assets
of German pension plans (€1,986 million) and portions of the additional VAT payment
(€384 million). Since the related effects were non-recurring, they were recorded under
non-recurring income / expenses, which in the previous year also included operating
restructuring payments (€140 million) and the interest effects of the additional VAT
payment (€161 million). In the reporting year, operating restructuring payments in the
amount of €73 million were recognized as non-recurring income / expenses.

Debt declined by €878 million year-on-year to €12,852 million in financial year
2013. The decrease was mainly attributable to the good operating business trend, which
led to a substantial rise in surplus cash and near-cash investments. The increase was also
the result of bonds totalling €1 billion that we issued in October 2013 to refinance a bond
which matured in January 2014. However, since reported financial liabilities also rose
in the same amount, the bond issues had a neutral impact on debt. More information
on the financial liabilities reported is contained in the Notes.

Cash and liquidity managed centrally

The cash and liquidity of our globally operating subsidiaries is managed centrally
by Corporate Treasury. More than 80 % of the Group’s external revenue is consolidated
in cash pools and used to balance internal liquidity needs. In countries where this
practice is ruled out for legal reasons, internal and external borrowing and investment
are arranged centrally by Corporate Treasury. In this context, we observe a balanced
banking policy in order to remain independent of individual banks. Our subsidiaries’
intra-group revenue is also pooled and managed by our in-house bank in order to
avoid external bank charges and margins through intercompany clearing. Payment
trans actions are executed in accordance with uniform guidelines using standardised
processes and IT systems. As part of the transition to SEPA, many Group companies
pooled their external payment transactions in the Group’s Payment Factory, which
executes payments in the name of the respective companies via Deutsche Post AG’s
central bank accounts.

Limiting market risk

The Group uses both primary and derivative financial instruments to limit market
risk. Interest rate risk is managed exclusively via swaps. Currency risk is additionally
hedged using forward transactions, cross-currency swaps and options. We pass on most
of the risk arising from commodity fluctuations to our customers and, to some extent,
use commodity swaps to manage the remaining risk. The parameters, responsibilities
and controls governing the use of derivatives are laid down in internal guidelines.

Note 46

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Financial position

Group Management Report

Flexible and stable financing

The Group covers its long-term financing requirements by maintaining a balanced
ratio of equity to liabilities. This ensures our financial stability and also provides adequate
flexibility. Our most important source of funds is net cash from operating activities.

In the reporting year, the five-year credit facility with a volume of €2 billion taken
out with a consortium of national and international banks in 2010 was renewed early
and extended until 2018 at more favourable terms. Two additional one-year extension
options were also agreed upon. This credit facility guarantees us favourable market
conditions and acts as a secure, long-term liquidity reserve. It does not contain any
covenants concerning the Group’s financial indicators. In view of our solid liquidity, the
syndicated credit facility was not drawn down during the year under review.

As part of our banking policy, we spread our business volume widely and main-
tain long-term relationships with the financial institutions we entrust with our busi-
ness. In addition to credit lines, we meet our borrowing requirements through other
independent sources of financing, such as bonds and operating leases. Most debt is
taken out centrally in order to leverage economies of scale and specialisation benefits
and hence to minimise the cost of capital.

In October 2013, we took advantage of the favourable capital market environment
to issue two bonds with a volume of €0.5 billion each, in connection with our Debt
Issuance Programme with a volume of up to €5 billion as established in 2012. The cash
inflow received in the same month was used to repay a bond in the amount of €0.9 bil-
lion that matured in January 2014. Further information on the various bonds is con-
tained in the Notes.

Group issues sureties, letters of comfort and guarantees

Deutsche Post AG provides security for the loan agreements, leases and supplier
contracts entered into by Group companies, associates or joint ventures by issuing letters
of comfort, sureties or guarantees as needed. This practice allows better conditions to
be negotiated locally. The sureties are provided and monitored centrally.

Creditworthiness of the Group remains adequate

Credit ratings represent an independent and current assessment of a company’s
credit standing. Ratings are based on a quantitative analysis and measurement of the
annual report and appropriate planning data. Qualitative factors, such as industry-
specific features, and the company’s market position and range of products and services,
are also taken into account.

Moody’s Investors Service has maintained the Group’s credit rating of “Baa1” with
a positive outlook. Fitch also confirmed its rating of “BBB+” with a stable outlook in
the reporting year.

This means that the capacity of the Group to meet its financial obligations continues
to be classified as adequate. Deutsche Post DHL is well positioned in the transport and
logistics sector with these ratings. The following table shows the ratings as at the report-
ing date and the underlying factors. The complete and current analyses by the rating
agencies and the rating categories can be found on our website.

Note 46

dpdhl.com/en/investors

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Financial position

a.36 Agency ratings

Fitch Ratings

Long-term: BBB +
Short-term: F 2
Outlook: stable

Moody’s Investors
Service

Long-term: Baa 1
Short-term: P – 2
Outlook: positive

Rating factors

• Well-integrated business profile.
• Dominant position in the domestic

mail and parcel market.

• Exposure to regulatory and litigation
risks (i. e., EU antitrust and state aid
investigations).

• Strong global footprint in the EXPRESS,

• Structural volume decline in the

GLOBAL FORWARDING, FREIGHT and
SUPPLY CHAIN businesses.

• Improvements in the financial profile

after the completion of the sale
of Postbank shares.

• Recovery of the express business’s
profits and market share, offsetting
the challenging macroeconomic
environment.

• Scale and global presence as the
world’s largest logistics company.

• Large and relatively robust mail

business in Germany.

• Success in restoring profitability

of logistics activities whilst reducing
negative regulatory and e-substitution
effects on the MAIL division.

• Conservative financial policy and

sound liquidity profile of the Group.

MAIL division due to secular changes
in the industry (i.e., competition
from electronic communication and
digitalisation).

• High exposure to global market

volatility through the DHL divisions.

• Exposure to global macroeconomic
trends in the logistics businesses.

• Structural decline of traditional

postal services.

• Despite the improving trend, credit
metrics are at the low end of the
rating category.

Liquidity and sources of funds

As at the balance sheet date, the Group had cash and cash equivalents in the amount
of €3.4 billion (previous year: €2.4 billion) at its disposal. A large portion of this is
accounted for by Deutsche Post AG. Most of the cash is invested centrally on the money
market. These short-term money market investments had a volume of €2.0 billion
as at the balance sheet date. Another €0.6 billion was invested in short-term money
market funds.

The financial liabilities reported in our balance sheet breakdown as follows:

a.37 Financial liabilities

€ m

Bonds

Due to banks

Finance lease liabilities

Liabilities to Group companies

Liabilities at fair value though profit or loss

Other

2012

4,109

137

149

117

211

4,816

2013

5,088

199

213

317

5,940

The increase in financial liabilities is primarily the result of the two bonds that
we issued in October 2013 in the amount of €0.5 billion each. Further information on
recognised financial liabilities is contained in the Notes.

Note 46

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Financial position

Group Management Report

Operating leases remain an important source of funding for the Group. We mainly
use operating leases to finance real estate, although we also finance aircraft, vehicle fleets
and IT equipment.

a.38 Operating lease liabilities by asset class

€ m

Land and buildings

Aircraft

Technical equipment and machinery

Other equipment, operating and office equipment, transport equipment, miscellaneous

2012

5,100

647

513

2013

4,966

524

572

6,325

6,129

1,128

979

Operating lease obligations decreased year-on-year to €6.1 billion because the
reduction in the remaining terms of legacy agreements, especially for real estate and
aircraft, is not matched by the same volume of new leases.

Capital expenditure slightly above prior-year level

As at the end of December 2013, the Group’s capital expenditure (capex) amounted
to €1,755 million, which represents a year-on-year increase of 3.4 % (previous year:
€1,697 million). Investments were made mainly to replace and expand assets. €1,511 mil-
lion was invested in property, plant and equipment and €244 million in intangible assets
excluding goodwill. Investments in property, plant and equipment related primarily to
advance payments and assets under development (€640 million), transport equipment
(€283 million), land and buildings (€214 million), technical equipment and machinery
(€151 million), IT equipment (€112 million), operating and office equipment (€77 mil-
lion) as well as aircraft (€34 million).

In regional terms, our focus remained on Europe, the Americas and Asia.

a.39 Capex by region

€ m

Germany

Americas

180

259

Europe (excluding Germany)

227

259

Asia Pacific

165

160

Other regions

2013

2012

a.40 Capex and depreciation, amortisation and impairment losses, full year

MAIL

2013

434

EXPRESS

2013

508

2012

597

2012

332

GLOBAL FORWARDING,
FREIGHT

SUPPLY CHAIN

Corporate Center /
Other

2012

150

2013

129

2012

300

2013

277

2012

318

2013

407

2012

1,697

Group

2013

1,755

334

358

400

408

111

288

270

206

213

1,339

1,341

0.99

1.21

1.49

1.25

1.35

1.40

1.04

1.03

1.54

1.91

1.27

1.31

Capex (€m)

Depreciation, amortisation
and impairment losses (€m)

Ratio of capex to depre-
ciation, amortisation and
impairment losses

a.41 Capex and depreciation, amortisation and impairment losses, Q 4

MAIL

2013

259

EXPRESS

2013

232

2012

173

2012

141

108

100

GLOBAL FORWARDING,
FREIGHT

SUPPLY CHAIN

2012

2013

2012

2013

Corporate Center /
Other

2012

109

2013

217

Group

2013

855

2012

562

349

348

1.62

2.40

1.73

2.47

1.93

2.48

1.13

1.38

1.85

3.74

1.61

2.46

Capex (€m)

Depreciation, amortisation
and impairment losses (€m)

Ratio of capex to depre-
ciation, amortisation and
impairment losses

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Financial position

MaIL expands parcel capacities

a.42 Capex by segment

Capital expenditure in the MAIL division increased in the reporting year from
€332 million to €434 million. The majority of investments (€189 million) was attribut-
able to the Parcel 2012 Production Concept, which aims to adapt our network capacities
to cater to increasing shipment volumes. With regard to E-POST, platform functionality
was expanded. Furthermore, we maintained our production facilities and infrastructure,
and equipped our mail and parcel operations with new hand scanners.

€ m

MAIL

EXPRESS

434

332

508

597

GLOBAL FORWARDING, FREIGHT

129

150

SUPPLY CHAIN

277

300

Corporate Center /Other

407

318

2013

2012

Objectives and strategies, page 34

eXpress invests in markets with rising customer demand

In the EXPRESS division, capital expenditure amounted to €508 million in the
reporting year, thus falling below the prior-year figure of €597 million, primarily because
of considerable investment in our aircraft fleet in the previous year. In the reporting
year, we increasingly focused our investments on the high-growth Asia Pacific and MEA
(Middle East and Africa) regions in order to meet rising customer demand. Increased
investments were also made in the Europe region.

GLoBaL ForWarDInG, FreIGHt expands It

In the GLOBAL FORWARDING, FREIGHT division, capital expenditure declined from
€150 million in the prior year to €129 million in 2013. Of that figure, €103 million was
attributable to the Global Forwarding business unit, where we improved our IT, particu-
larly as part of the New Forwarding Environment project, and consolidated and modernised
warehouses, mainly in the Asia Pacific and Europe regions. A total of €26 million was
invested in the Freight business unit – the majority of the investments were made in real
estate, office, operating and IT equipment as well as in software.

suppLY CHaIn supports new business

In the SUPPLY CHAIN division, capital expenditure amounted to €277 million in the
reporting year (previous year: €300 million). Of this amount, €239 million related to
the Supply Chain business unit, €19 million to Williams Lea and €19 million to central
entities. Approximately 54 % of the funds were used to support new business globally. In
the Americas and Asia Pacific regions, investments focused primarily on the Consumer,
Retail and Automotive sectors. In Europe, the majority of investments were made in
the UK, the Benelux countries and Eastern Europe, in particular to support projects in
Airline Business Solutions and the Technology sector. In the Williams Lea business unit,
IT infrastructure was the main focus of our investments. The central entities invested
in a global finance project.

Cross-divisional investments increase in fleet and real estate

Cross-divisional capital expenditure rose from €318 million in 2012 to €407 million
in the reporting year, which was predominantly attributable to higher expenditures for
real estate and vehicles. Investments in IT were below the high prior-year level.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Financial position

Group Management Report

a.43 Operating cash flow by division,
2013

€ m

MAIL

EXPRESS

940

1,471

GLOBAL FORWARDING, FREIGHT

SUPPLY CHAIN

649

637

Operating cash flow firmly in positive territory

Net cash from operating activities amounted to €2,994 million in 2013. By contrast,
a net cash outflow of €203 million was generated in the previous year. This €3,197 mil-
lion improvement is primarily due to reductions in provisions. In the previous year, we
funded further pension obligations and covered the additional VAT payment. The figure
was also pushed up by the improved EBIT and a lower figure for non-cash income and
expenses. At €3,078 million, net cash from operating activities before changes in work-
ing capital also increased sharply compared with the previous year’s figure (€219 mil-
lion). Thanks to better working capital management, the cash outflow from changes in
working capital declined from €422 million to €84 million. The change in liabilities and
other items made a particularly significant contribution to this development.

a.44 Selected cash flow indicators

€ m

Cash and cash equivalents as at 31 December

Change in cash and cash equivalents

Net cash used in / from operating activities

Net cash used in investing activities

Net cash from / used in financing activities

2012

2,400

–701

–203

–1,697

1,199

2013

3,417

1,112

2,994

–1,772

–110

Net cash used in investing activities rose by €75 million to €1,772 million. At
€1,389 million, investments in property, plant and equipment and intangible assets were
down €250 million year-on-year (previous year: €1,639 million); their main focuses
are described in the capital expenditure section. Although some of the expenditures
had been capitalised towards the end of the year, this cash was only paid after the bal-
ance sheet date. Cash flow from investing activities rose due to the cash outflow from
the change in current financial assets in particular. At €575 million, the figure was up
€565 million year-on-year, due in particular to the investment of short-term liquidity
in money market funds. In contrast, cash paid to acquire other non-current financial
assets was down €268 million on the prior year. In the previous year, the recognition
of the demand for repayment of state aid reduced net cash used in investing activities
by €298 million.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Financial position

a.45 Calculation of free cash flow

€ m

Net cash used in / from operating activities

Sale of property, plant and equipment and intangible assets

2012

–203

225

2013

2,994

177

Acquisition of property, plant and equipment and intangible assets

–1,639

–1,389

Q 4 2012

Q 4 2013

– 629

– 542

1,561

– 460

Cash outflow arising from change in property, plant
and equipment and intangible assets

–1,414

–1,212

– 466

– 401

Disposal of subsidiaries and other business units

Acquisition of subsidiaries and other business units

Cash outflow / inflow arising from acquisitions / divestitures

Interest received

Interest paid

Net interest paid

Free cash flow

– 57

–18

–296

–250

–37

– 5

–166

–124

–1

–2

–26

–16

– 45

–37

–1,885

1,653

–1,113

1,124

Free cash flow improved significantly year-on-year from €–1,885 million to
€1,653 million. In the fourth quarter, it changed from €–1,113 million in the comparable
prior-year period to €1,124 million.

Net cash used in financing activities amounted to €110 million in the year under
review, compared with a net cash inflow of €1,199 million in the previous year. As in
2012, the dividend paid to our shareholders was the largest payment in this area, at
€846 million. The cash inflow from the issuance of non-current financial liabilities
declined by €2,166 million to €1,010 million, mainly because we issued new bonds and
a convertible bond to fund our pension obligations in the previous year. In the reporting
year, the issue of two bonds with a five-year and ten-year term resulted in a cash inflow
of €495 million for each bond. Interest payments fell by €130 million to €166 million,
primarily because interest of €161 million had been incurred in the previous year for
the additional VAT payment.

Cash and cash equivalents rose from €2,400 million as at 31 December 2012 to
€3,417 million, due to the changes in the cash flows from the individual areas of activity.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Net assets

Group Management Report

Net assets

a.46 Selected indicators for net assets

Equity ratio 1

Net debt

Net interest cover

FFO to debt 2

1 Prior-year amount adjusted.
2 Calculation

Financial position, page 52.

€ m

2012

27.3

1,952

10.7

28.9

2013

28.3

1,481

23.1

34.4

Consolidated total assets increased

The Group’s total assets amounted to €35,478 million as at 31 December 2013,

€1,621 million higher than at 31 December 2012 (€33,857 million).

Non-current assets decreased by €202 million to €21,366 million. Intangible assets
declined by €315 million to €11,836 million, mainly due to a reduction in goodwill
resulting from currency effects. Property, plant and equipment rose by €151 million
to €6,814 million. This increase is partly due to capital expenditure in connection with
the development of the EXPRESS division’s infrastructure in rapidly growing markets.
Non-current financial assets increased by €85 million to €1,124 million, whilst other
non-current assets were down €114 million to €184 million, due primarily to the
decrease in pension assets resulting from actuarial losses. At €1,327 million, deferred
tax assets were on a level with the previous year (€1,328 million).

Current assets were up by €1,823 million to €14,112 million and inventories by
€81 million to €403 million. Current financial assets rose by €569 million to €821 mil-
lion, largely because we invested excess funds in money market funds. Trade receivables
rose slightly from €6,959 million to €7,040 million. At €2,221 million, other current
assets were up €68 million on the figure as at 31 December 2012. We report on the
€1,017 million rise in cash and cash equivalents to €3,417 million in detail in the section
entitled financial position. Income tax assets increased by €41 million to €168 million.

At €9,857 million, equity attributable to Deutsche Post AG shareholders was
€838 million higher than at 31 December 2012 (€9,019 million). Whilst consolidated
net profit for the period made a positive contribution, the equity figure was reduced by
the dividend paid to our shareholders and negative currency effects.

Current and non-current liabilities rose from €15,651 million to €16,970 million,
also because trade payables increased by €401 million to €6,392 million. A bond in the
amount of €926 million falling due in January 2014 was reclassified to current financial
liabilities and we borrowed €1 billion in non-current financial liabilities on the capital
market. Overall, financial liabilities increased by €1,124 million to €5,940 million.
Current and non-current provisions decreased by €518 million from €8,978 million to
€8,460 million, mainly because we utilised restructuring provisions. Income tax liabil-
ities also decreased by €104 million to €430 million.

Page 58 f.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Net assets

Net debt declines to €1,481 million

Our net debt declined from €1,952 million as at 31 December 2012 to €1,481 million
at the reporting date. The prior-year figure was affected by the additional VAT payment
(€482 million) and the amount demanded as repayment of state aid that is administered
in a trust account (€298 million), amongst other things.

The equity ratio improved by one percentage point to 28.3 %.
The dynamic gearing ratio is an indicator of internal financing capacity and expresses
the average number of years a company would require to pay off its outstanding debt
using the cash flow generated from operating activities. It amounted to 0.5 years in the
year under review.

Net interest cover shows the extent to which net interest obligations are covered by

EBIT. Due to the improved EBIT, it rose to 23.1.

Net gearing expresses the ratio of net debt to the total of equity and net debt. This

amounted to 12.8 % at 31 December 2013.

a.47 Net debt

€ m

Non-current financial liabilities

Current financial liabilities

Financial liabilities

Cash and cash equivalents

Current financial assets

Long-term deposits 1

Positive fair value of non-current financial derivatives 1

Financial assets

Net debt

1 Prior-year amount adjusted. Reported in current financial liabilities in the balance sheet.

2012

4,399

377

4,776

2,400

252

115

2,824

1,952

2013

4,591

1,290

5,881

3,417

821

107

4,400

1,481

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Business performance in the divisions

Group Management Report

Business performance in the divisions

OVERVIEW

a.48 Key figures by operating division

€ m

MaIL

Revenue

of which Mail Communication

Dialogue Marketing

Press Services

Parcel Germany

Retail Outlets

Global Mail

Pension Service

Consolidation / Other

Profit from operating activities (EBIT)

Return on sales (%) 1

Operating cash flow

eXpress

Revenue

of which Europe

Americas

Asia Pacific

MEA (Middle East and Africa)

Consolidation / Other

Profit from operating activities (EBIT)

Return on sales (%) 1

Operating cash flow

GLoBaL ForWarDInG, FreIGHt

Revenue

of which Global Forwarding

Freight

Consolidation / Other

Profit from operating activities (EBIT)

Return on sales (%) 1

Operating cash flow

suppLY CHaIn

Revenue

of which Supply Chain

Williams Lea

Consolidation / Other

Profit from operating activities (EBIT)

Return on sales (%) 1

Operating cash flow

1 EBIT / revenue.

2012
adjusted

2013

+ / – %

Q 4 2012
adjusted

Q 4 2013

+ / – %

13,972

14,452

5,284

2,548

744

3,477

850

1,712

101

–744

1,048

7.5

–1,445

5,619

2,363

734

3,750

883

1,783

–778

1,226

8.5

940

12,778

12,712

5,614

2,276

4,301

961

–374

1,110

8.7

1,102

15,666

11,604

4,192

–130

514

3.3

647

14,340

13,000

1,345

– 5

419

2.9

432

5,891

2,259

4,289

924

– 651

1,133

8.9

1,471

14,838

10,727

4,246

–135

483

3.3

649

14,277

12,939

1,345

–7

441

3.1

637

3.4

6.3

–7.3

–1.3

7.9

3.9

4.1

–3.0

– 4.6

17.0

–

– 0.5

4.9

– 0.7

– 0.3

–3.9

–74.1

2.1

–

33.5

– 5.3

–7.6

1.3

–3.8

– 6.0

–

0.3

– 0.4

– 0.5

0.0

– 40.0

5.3

–

47.5

3,851

1,394

691

189

1,038

229

496

–209

372

9.7

–1,415

3,342

1,482

602

1,121

239

–102

280

8.4

495

3,989

2,942

1,081

–34

167

4.2

237

3,733

3,391

345

–3

116

3.1

275

3,968

1,476

654

194

1,112

240

480

–210

360

9.1

328

3,326

1,561

593

1,118

229

–175

320

9.6

588

3,789

2,731

1,093

–35

139

3.7

374

3,712

3,343

371

–2

178

4.8

376

3.0

5.9

– 5.4

2.6

7.1

4.8

–3.2

– 4.3

– 0.5

–3.2

–

– 0.5

5.3

–1.5

– 0.3

– 4.2

–71.6

14.3

–

18.8

– 5.0

–7.2

1.1

–2.9

–16.8

–

57.8

– 0.6

–1.4

7.5

33.3

53.4

–

36.7

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Business performance in the divisions

Glossary, page 218

MAIL DIVISION

Revenue up by 3.4 %

In the reporting year, revenue in the division was €14,452 million and therefore well
above the prior year’s figure of €13,972 million, despite 0.6 fewer working days. The figure
for the reporting year included negative currency effects of €26 million. Our operating
business performed well overall, especially in the Mail Communication, Parcel Germany
and Global Mail business units. In the first half of 2013, we utilised some of the provision
recognised for postage stamps, which resulted in a positive effect of €50 million.

Volumes increase following product discontinuation

In the Mail Communication business unit, the volume of letters we delivered in 2013
increased overall by 3.1 %, although private customer volumes declined by 2.6 %. Since
we discontinued our Infobrief product, business customers have been sending more
traditional letters. In the regulated sector, we raised prices for the first time in 15 years
as permitted by the price-cap procedure. Revenue in the business unit increased in the
reporting year by 6.3 % from €5,284 million to €5,619 million. A further price increase
was approved for 2014.

a.49 Mail Communication: volumes

mail items (millions)

Business customer letters

Private customer letters

Total

2012

6,403

1,175

7,578

2013

6,672

1,144

7,816

+ / – %

Q 4 2012

Q 4 2013

4.2

–2.6

3.1

1,643

341

1,984

1,745

335

2,080

+ / – %

6.2

–1.8

4.8

Unaddressed advertising mail on upwards trend

In the Dialogue Marketing business unit, volumes declined overall. Whilst
unaddressed advertising mail saw an upwards trend, addressed advertising mail
declined because we discontinued our Infobrief product. The mail-order business
continued to hold back on advertising expenditure. Moreover, the insolvencies of our
customers Neckermann and Praktiker had an adverse impact. Revenue in the business
unit declined by 7.3 % in the reporting year to €2,363 million (previous year: €2,548 mil-
lion). The quarter-on-quarter decline was somewhat less pronounced.

a.50 Dialogue Marketing: volumes

mail items (millions)

Addressed
advertising mail

Unaddressed
advertising mail

Total

2012

2013

+ / – %

Q 4 2012

Q 4 2013

+ / – %

5,869

5,470

4,197

10,066

4,281

9,751

– 6.8

2.0

–3.1

1,607

1,529

– 4.9

1,158

2,765

1,253

2,782

8.2

0.6

Press services revenue down

Revenue in the Press Services business unit totalled €734 million in the reporting
year, 1.3 % below the prior-year figure of €744 million. Circulation figures continued
their downwards trend in the German press services market and further publications
were discontinued.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Business performance in the divisions

Group Management Report

Parcel business sees strong sustained growth

In the Parcel Germany business unit, revenue in the reporting year was €3,750 mil-
lion, exceeding the prior-year figure of €3,477 million by a substantial 7.9 %. Fourth-
quarter growth was somewhat lower. We are laying the logistical foundation for con-
tinued strong growth in e-commerce by expanding our portfolio and improving our
services.

a.51 Parcel Germany: volumes

parcels (millions)

Business customer parcels 1

Private customer parcels

Total

1 Including intra-group revenue.

2012

835

120

955

2013

902

124

1,026

+ / – %

Q 4 2012

Q 4 2013

+ / – %

8.0

3.3

7.4

244

284

261

302

7.0

2.5

6.3

Retail outlets increase revenue

Revenue generated by the 26,000-plus sales points amounted to €883 million in the
reporting year, a 3.9 % increase over the prior year (€850 million). In the fourth quarter,
revenue growth was actually 4.8 %, driven by factors including strong parcel growth.

Sustained positive performance in international mail business

In the Global Mail business unit, volume declined in the reporting year, whilst
revenue rose by 4.1 % to €1,783 million. The trend that sees customers shifting from
lightweight to heavier items continues across all regions. Furthermore, the development
witnessed in both domestic business in the United States, and cross-border mail to and
from Germany was particularly strong.

a.52 Mail International: volumes

mail items (millions)

Global Mail

2012

1,900

2013

1,804

+ / – %

– 5.1

Q 4 2012

Q 4 2013

515

473

+ / – %

– 8.2

Increased costs slow improvement in earnings

EBIT in the MAIL division was up 17.0 % to €1,226 million in financial year 2013, a
substantial increase on the adjusted prior-year figure of €1,048 million. The figure for
the reporting year included a positive effect of €50 million from the utilisation of some
of the provision recognised for postage stamps. Furthermore, the previous year was
affected adversely by €151 million resulting from the additional VAT payment. Signifi-
cantly higher labour and material costs noticeably slowed an improvement in earnings.
Return on sales was 8.5 %, exceeding the prior year (7.5 %). In the fourth quarter of 2013,
EBIT amounted to €360 million, 3.2 % less than the prior year (adjusted: €372 million).
Operating cash flow in the reporting year was €940 million, significantly exceeding
the prior-year figure of €–1,445 million. The prior year included the effects from the
additional VAT payment (€−290 million) as well as the funding of our pension obliga-
tions (€−1,897 million). Working capital in the reporting year was €−424 million.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Business performance in the divisions

EXPRESS DIVISION

Operating business continues to perform well

In the reporting year, revenue in the division amounted to €12,712 million – only
slightly below the previous year’s figure of €12,778 million. Operationally, we have con-
tinued to grow: excluding the considerable negative currency effects of €546 million and
revenues of €75 million related to the divested domestic express business in Australia,
New Zealand and Romania included in the prior year, revenue increased by 4.3 %.

In the Time Definite International (TDI) product line, per-day shipment volumes
rose by 8.4 % compared with the prior year. An increase of 8.4 % in the fourth quarter
affirmed this positive trend.

In the Time Definite Domestic (TDD) business, our customers sent 9.3 % more ship-

ments each day year-on-year. Growth in the fourth quarter amounted to 9.1 %.

For reasons of materiality, we no longer report the Day Definite Domestic (DDD)

product line separately with effect from the first quarter of 2013.

a.53 eXpress: revenue by product

€ m per day 1

Time Definite
International (TDI)

Time Definite
Domestic (TDD)

2012
adjusted

34.1

4.3

2013

+ / – %

36.5

4.6

7.0

Q 4 2012
adjusted

36.5

4.6

Q 4 2013

+ / – %

39.5

4.8

8.2

4.3

1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis

for the weighted calculation of working days.

a.54 eXpress: volumes by product

Thousands of items
per day 1

2012
adjusted

2013

+ / – %

Time Definite
International (TDI)

Time Definite
Domestic (TDD)

596

749

646

819

8.4

9.3

Q 4 2012
adjusted

643

791

Q 4 2013

+ / – %

697

863

8.4

9.1

1 To improve comparability, product revenues were translated at uniform exchange rates. These revenues are also the basis

for the weighted calculation of working days.

Above-average growth in some Europe region countries

Revenue in the Europe region increased by 4.9 % in the reporting year to €5,891 mil-
lion (previous year: €5,614 million). The figure included revenues of €15 million related
to the domestic express business in Romania, which was sold in the first quarter of
2013. Excluding this sale and negative currency effects of €85 million related mainly to
our business activities in the UK, Switzerland, Scandinavia, Russia, Turkey and several
countries in Eastern Europe, revenue growth was 6.7 %. Our business saw above-average
growth especially in large countries such as Germany, the UK, Russia, the Netherlands,
Spain and France. Daily shipment volumes in the TDI product line grew by 8.2 % in the
reporting year and 7.0 % in the fourth quarter.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Business performance in the divisions

Group Management Report

Volumes in the Americas region see final-quarter double-digit increases

In the reporting year, revenue in the Americas region amounted to €2,259 mil-
lion – slightly below the previous year’s figure of €2,276 million. This figure included
negative currency effects of €146 million related mainly to our business activities in the
United States, however also in Canada and other Central and South American countries.
Excluding these effects, revenue in the region increased by 5.7 %. Daily shipment volumes
in the TDI product line improved by 7.3 % in the reporting year, recording double-digit
growth of 10.1 % in the fourth quarter.

Sustained strong business growth in the Asia Pacific region

Despite the adverse impact of considerable negative currency effects of €270 million,
which related mainly to Japan, Australia and India, revenue in the Asia Pacific region
was €4,289 million and thus almost on a par with the prior year’s figure of €4,301 million.
Excluding these effects and the above-mentioned disposals of €60 million, revenue grew
by 7.4 %. In the TDI product line, our customers sent 9.0 % more shipments per day in
2013 than in the previous year; volumes in China, Australia and India saw double-digit
growth. Volume growth in the fourth quarter amounted to 8.9 %.

Volumes in the Mea region continue to rise

In the MEA region (Middle East and Africa), revenue in the reporting year was
€924 million and thus 3.9 % below the prior year’s figure of €961 million. The figure
for the reporting period included negative currency effects of €53 million. Excluding
these effects, revenue grew by 1.7 % in the reporting year. Per-day shipment volumes for
the TDI product line increased by 9.0 %, recording an encouraging 10.7 % in the fourth
quarter.

eBIt exceeds high prior-year figure

EBIT in the division was €1,133 million in 2013, exceeding the record high of the
previous year (adjusted: €1,110 million) by 2.1 %. The prior-year figure included one-
time effects, which had a positive impact on earnings of €113 million. The EBIT figure
for the reporting year included a €12 million deconsolidation gain on the divestment of
the domestic express business in Romania. Excluding these effects, earnings improved
considerably by 12.4 % in the reporting year. In the fourth quarter they even improved
by 14.3 % to €320 million (previous year, adjusted: €280 million).

Return on sales rose to 8.9 % for the reporting year (previous year: 8.7 %) and 9.6 %
for the fourth quarter (previous year, adjusted: 8.4 %). Excluding the one-time effects
mentioned above, return on sales rose from 7.8 % to 8.8 % year-on-year.

Thanks to increased profitability and further optimised working capital manage-
ment, we increased the division’s operating cash flow in the reporting year by 33.5 % to
€1,471 million (previous year: €1,102 million). In the fourth quarter, we also benefited
from considerable seasonal effects in working capital, which together with increased
profitability allowed operating cash flow to increase to €588 million (previous year:
€495 million).

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Business performance in the divisions

GLOBAL FORWARDING, FREIGHT DIVISION

Freight forwarding business profitable in weak market

Revenue in the division decreased by 5.3 % to €14,838 million in the reporting
year (previous year: €15,666 million). This figure included negative currency effects of
€491 million. The freight forwarding business declined in the first three quarters of 2013
in an appreciably weakened market. In the fourth quarter, revenue was 5.0 % below the
prior-year period at €3,789 million (previous year: €3,989 million) due also to the inclu-
sion of negative currency effects of €184 million in this figure. Excluding currency effects,
revenue saw a 0.4 % year-on-year decrease. The business remained profitable overall.

In the Global Forwarding business unit, revenue declined by 7.6 % in the report-
ing year to €10,727 million (previous year: €11,604 million). Excluding negative cur-
rency effects of €465 million, the decline was 3.6 %. Gross profit decreased by 5.7 % to
€2,503 million (previous year: €2,655 million).

Our strategic project New Forwarding Environment continues to make good progress.

Objectives and strategies, page 34

Gross profits in air and ocean freight decline

Revenues and volumes in air and ocean freight decreased over the course of the

reporting year as a whole, whereas the decline in the fourth quarter was lower.

Our air freight volumes in 2013 were 4.8 % below the prior-year figure, due primarily
to a decline in demand from several large customers in both the Technology and
Engineering & Manufacturing sectors. Although higher freight rates were announced,
short-term purchases on the spot market kept rates stable. Airlines are expanding their
passenger capacities by putting new aircraft into operation. However, freight capacities
are being reduced significantly and selectively in order to drive up the rates. This has
led to increased pressure on margins since the end of the third quarter. In addition,
several large airlines adjusted the basis for calculating fuel surcharges, which also had a
negative impact on margins. Our air freight revenue in the reporting year declined by
10.0 %, which resulted in a 12.6 % decrease in gross profit. In the fourth quarter, volumes
were 2.2 % and revenue 5.9 % below the prior-year quarter.

Our ocean freight volumes in the reporting year were down 1.2 %. The main driver
for this decrease was a decline in demand in the Americas region. The intra-Asian
routes continue to record the highest volumes. The volumes on these routes increased
year-on-year. Exports from Europe remain stable, whilst demand on the north-south
routes is increasing. The rates on the east-west trade lanes remain volatile. Ocean car-
riers are responding to supply and demand by limiting effective capacity and adjusting
travel speed. Our ocean freight revenue decreased by 5.5 % in the reporting year; gross
profit declined by 3.1 %. In the fourth quarter, volumes again increased slightly by 0.9 %;
revenue remained 7.9 % below the prior year.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Business performance in the divisions

Group Management Report

Our industrial project business (in table 55, reported as part of Other) saw weaker
performance in the reporting year compared with the prior year. Discontinuing the
unprofitable part of our ship charter business in China in 2012 resulted in a drop in
revenue; however, this could be partially offset by the addition of new profitable business.
The share of revenue related to industrial project business and reported under Other
was 37.9 % and therefore almost on a par with the previous year (38.7 %). Gross profit
improved by a double-digit percentage compared with the prior year.

a.55 Global Forwarding: revenue

€ m

Air freight

Ocean freight

Other

Total

2012

5,517

3,738

2,349

2013

4,968

3,532

2,227

11,604

10,727

+ / – %

–10.0

– 5.5

– 5.2

–7.6

Q 4 2012

1,397

921

624

2,942

Q 4 2013

1,315

848

568

2,731

a.56 Global Forwarding: volumes

thousands

Air freight

tonnes

of which exports

tonnes

Ocean freight

TEU s 1

1 Twenty-foot equivalent units.

2012

4,147

2,327

2,840

2013

3,949

2,215

2,807

+ / – %

– 4.8

–1.2

Q 4 2012

1,070

606

701

Q 4 2013

1,046

591

707

+ / – %

– 5.9

–7.9

– 9.0

–7.2

+ / – %

–2.2

–2.5

0.9

Slight revenue growth in European overland transport business

In the Freight business unit, revenue was up by 1.3 % to €4,246 million in 2013
(previous year: €4,192 million). In addition to the effect of one additional working day,
business grew primarily in Germany, Eastern Europe, the Benelux countries and France.
Despite continuing pressure on margins in the highly competitive European transport
market, gross profit was €1,152 million in the reporting year and thus on a par with the
prior year’s figure of €1,155 million.

eBIt includes higher expenses for nFe

EBIT in the division was €483 million and therefore 6.0 % below the prior-year level
(adjusted: €514 million). Whilst gross profit margins declined, efficiency increased and
the relationship between gross margin and EBIT improved. As in the previous year,
earnings included expenses for the NFE project, which, as expected, were higher than
in 2012. Return on sales was 3.3 % as in the previous year.

In the fourth quarter of 2013, EBIT fell year-on-year by 16.8 % to €139 million.
Net working capital was reduced considerably year-on-year, thanks to strict
cash management, leading to an operating cash flow of €649 million (previous year:
€647 million).

Deutsche Post DHL 2013 Annual Report

Group Management Report

Report on Economic Position
Business performance in the divisions

a.57 suppLY CHaIn:
revenue by sector, 2013

Total revenue: €14,277 million

3 % Energy
4 % Supply Chain Others
9 % Automotive
9 % Williams Lea
11 % Technology
19 % Life Sciences
& Healthcare

20 % Consumer

25 % Retail

a.58 suppLY CHaIn:
revenue by region, 2013

Total revenue: €14,277 million

14 % Asia Pacific /

Middle East/Africa 1

28 % Americas

58 % Europe/Other /
Consolidation 1

1 At the beginning of 2013, the sub-region
Middle East and Africa was consolidated
into the Asia Pacific region.

SUPPLY CHAIN DIVISION

Revenue growth impacted by negative currency effects

Revenue in the division decreased slightly in the reporting year by 0.4 % to
€14,277 million (previous year: €14,340 million). We disposed of our investments in
three businesses which were no longer considered to be core activities. This reduced
revenue by €212 million. Excluding these disposals and considerable negative currency
effects of €694 million, revenue grew by 5.9 %. The main currency effect came from the
appreciation of the euro against the pound sterling. In the fourth quarter of 2013, rev-
enue decreased by 0.6 % year-on-year to €3,712 million (previous year: €3,733 million).
Excluding the effects mentioned above, revenue growth was 7.5 %.

Asian supply chain business records highest revenue growth

Revenue in the Supply Chain business unit for 2013 was €12,939 million, a slight
0.5 % decline from the previous year (€13,000 million). Excluding business disposals
and high negative currency effects, growth was 6.0 %. The largest revenue increases were
seen in the Life Sciences & Healthcare, Automotive, Consumer and Technology sectors
along with significant growth in Airline Business Solutions. Revenue from the top 20
customers increased by 5.4 %.

In the Americas region, revenues in the major sectors Consumer, Life
Sciences & Healthcare and Automotive improved due to additional volume and new
business. The strongest revenue growth was seen in Brazil, principally in the Technology
sector.

The largest percentage revenue increase was achieved in the Asia Pacific region,
primarily in Australia, China and Thailand. Revenue growth in Australia resulted from
additional volumes and new business, above all in the Consumer, Life Sciences & Health-
care and Technology sectors, as well as from Airline Business Solutions. In China, rev-
enue increased significantly in the Consumer and Technology sectors, whilst in Thailand
we benefited from new business and higher volumes in the Automotive, Consumer and
Retail sectors.

In Europe, volumes in the Automotive sector and in Airline Business Solu-
tions increased on account of higher end-customer demand. Revenue in the Life
Sciences & Healthcare sector improved due to additional business with the UK National
Health Service. The economic environment adversely affected business in other parts
of Europe.

Revenue in the Williams Lea business unit was €1,345 million in the reporting year
(previous year: €1,345 million). Excluding negative currency effects, revenue increased
by 4.5 % with accelerated growth in the second half of the year. Additional activity and
the start of new contracts were partly offset by lower volumes in the banking and legal
sectors, as well as some contract losses.

New business worth around €1,520 million secured

In the reporting year, the Supply Chain business unit concluded additional contracts
worth around €1,520 million (previous year: around €1,210 million) in annualised reve-
nue with both new and existing customers. Substantial signings were secured with major
customers in the Consumer, Retail, Life Sciences & Healthcare and Technology sectors.
The annualised contract renewal rate remained at a consistently high level.

Deutsche Post DHL 2013 Annual Report

Report on Economic Position
Business performance in the divisions

Group Management Report

Earnings impacted by one-time effects and business disposals

EBIT in the division was €441 million in the reporting year (previous year, adjusted:
€419 million). This figure included a non-cash one-off gain on the adjustment of pension
plans of €50 million in the fourth quarter, arising from the transition of defined benefit
to defined contribution pension plans in the UK. In the reporting year, this one-off
benefit was offset by €30 million in restructuring expenses mainly for initiatives to
reduce indirect costs in Europe. The division also incurred expenses associated with
business disposals.

Earnings were impacted by contract losses and the first-quarter charges associated
with the Chapter 11 insolvency filing of a major Williams Lea customer based in the
United States. The further improved management of our contract portfolio and strong
performance in the Americas and Asia Pacific regions offset lower volumes and mar-
gin pressure in other markets. The return on sales was 3.1 % (previous year: 2.9 %). In
the fourth quarter of 2013, EBIT amounted to €178 million (previous year, adjusted:
€116 million), benefitting from the above-mentioned one-time effects and improved
business performance.

Operating cash flow for the reporting year increased to €637 million, from €432 mil-

lion in the previous year.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Deutsche Post Shares

DEUTSCHE POST SHARES

Equity markets benefit from monetary policies

The stock markets performed well again in 2013. At the start of the year, sentiment
was still bearish given concerns regarding France’s risk of dipping into recession as well
as the difficult situations in Italy, Spain, Portugal and Cyprus. On 19 April 2013, the
DAX reached its annual low of 7,460 points. Whilst a good reporting season and the
lowering of key interest rates by the ECB in May led the markets to recover, the upwards
trend abated towards the end of the first half amidst speculation of a halt to the US Federal
Reserve’s expansive monetary policies. The DAX was up at the end of the first half thanks
to the sustained growth of the German economy. However, the EURO STOXX 50 reached
its annual low of 2,512 points on 24 June. In the second half, both indices displayed a
steady upwards trend on the back of the US budget agreement and the decision of the
ECB to take its key interest rate down another notch. After slight corrections, the markets
rallied once again at year-end. The DAX reached a new all-time high of 9,589 points on
27 December and the EURO STOXX 50 reached an annual high of 3,111 points on the same
day. The DAX ended the year 2013 at 9,552 points, a gain of 25.5 %. The EURO STOXX 50
was up 18.4 % year-on-year.

a.59 Deutsche Post shares: multi-year review

Economic parameters, page 45

Year-end closing price

High

Low

Number of shares

Market capitalisation as at 31 December

2007

23.51

25.65

19.95

2008

11.91

24.18

7.18

€

millions

€ m

1,208.2 1

28,388

1,209.0 1

14,399

2009

13.49

13.79

6.65

1,209.0

16,309

2010

12.70

14.46

11.18

1,209.0

15,354

2011

11.88

13.83

9.13

1,209.0

14,363

2012

16.60

16.66

11.88

1,209.0

20,069

2013

26.50

26.71

16.51

1,209.0

32,039

Average trading volume per day

6,907,270

7,738,509

5,446,920

5,329,779

4,898,924

4,052,323

4,114,460

Annual performance including dividends

Annual performance excluding dividends

Beta factor 2

Earnings per share 3

Cash flow per share 4

Price-to-earnings ratio 5

Price-to-cash flow ratio 4, 6

Dividend

Payout ratio

Dividend per share

Dividend yield

€

€ m

€

6.9

2.9

0.68

1.15

4.27

20.4

5.5

1,087

78.6

0.90

3.8

– 45.5

– 49.3

0.81

–1.40

1.60

– 8.5

7.4

725

–

0.60

5.0

18.3

13.3

0.91

0.53

– 0.48

25.5

–28.1

725

112.6

0.60

4.4

–1.4

– 5.9

0.95

2.10

1.59

6.0

8.0

786

30.9

0.65

5.1

–1.3

– 6.5

1.19

0.96

1.96

12.4

6.1

846

72.7

0.70

5.9

45.6

39.7

0.88

1.36 7

– 0.17

12.2 7

– 97.6

846

51.6

0.70

4.2

63.9

59.6

0.86

1.73

2.48

15.3

10.7

967 8

46.2 9

0.80 8

3.0

Note 38.

1 Increase due to exercise of stock options
2 Three-year beta; source: Bloomberg.
3 Based on consolidated net profit after deduction of non-controlling interests
4 Cash flow from operating activities.
5 Year-end closing price / earnings per share.
6 Year-end closing price / cash flow per share.
7 Adjusted after applying IAS 19 R.
8 Proposal.
9 Excluding extraordinary effects: 48.9 %.

Note 22.

Deutsche Post DHL 2013 Annual Report

Deutsche Post Shares

Group Management Report

a.60 Peer group comparison: closing prices

Deutsche Post DHL

PostNL

TNT Express

FedEx

UPS

Kuehne + Nagel

30 Sept.
2013

24.53

3.20

6.75

114.11

91.37

118.50

31 Dec.
2013

26.50

4.15

6.75

143.77

105.08

117.10

EUR

USD

CHF

+ / – %

8.0

29.7

0.0

26.0

15.0

–1.2

30 Dec.
2012

16.60

2.92

8.43

91.72

73.73

110.00

31 Dec.
2013

26.50

4.15

6.75

143.77

105.08

117.10

+ / – %

59.6

42.1

–19.9

56.7

42.5

6.5

a.61 Share price performance

€

Closing price: € 26.50

30 December 2012

31 March 2013

30 June 2013

30 September 2013

31 December 2013

Deutsche Post

EURO STOXX 50 1

DAX 1

1 Rebased to the closing price of Deutsche Post shares on 30 December 2012.

Deutsche Post shares outperform the DaX for the third consecutive year

Deutsche Post shares again made strong gains over the course of 2013. Although
the shares recovered quickly from their annual low of €16.51 on 8 January, they then
proceeded to mirror the fluctuating market. After publication of the figures for 2012 on
5 March our shares broke away from the rest of the market to take a lead that widened
even more after the announcement of the quarterly figures on 14 May 2013. The free
float steadily increased up until the end of July, finally reaching 79.0 % as a result of full
conversion of a convertible bond issued by KfW Bankengruppe (KfW). Publication of
the results for the second quarter on 6 August led to fresh price gains for our shares
along with rising market capitalisation, a development that made no small contribution
to their admission to the EURO STOXX 50 on 23 September. Over the rest of the year we
registered additional gains thanks to increases in demand as well as another announce-
ment of solid figures on 12 November, this time for the third quarter. The subsequent
brief price correction was followed by a year-end rally to a new all-time high of €26.71
on 27 December. With a closing price of €26.50, our shares ended the year up 59.6 % and
thus outperformed the DAX for the third consecutive year. Deutsche Post shares were also
the second-strongest stock in Germany’s leading index as well as in the EURO STOXX 50
at the end of 2013. Average daily Xetra trading volumes remained at the prior-year level
at 4.1 million shares.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Deutsche Post Shares

Majority of analysts give shares a “buy” rating

a.62 Shareholder structure 1

21.0 % KfW Bankengruppe

79.0 % free float

67.8 % institutional

investors

11.2 % private investors

1 As at 31 December 2013.

a.63 Shareholder structure by region 1

13.8 % USA

14.8 % UK

26.9 % Other

44.5 % Germany

1 As at 31 December 2013.

At the close of 2013, 18 analysts issued a “buy” recommendation on our shares – six
fewer than the year before. Due to the strong share performance, more analysts regard
our stock as appropriately rated. As a result, the number of hold ratings increased from
11 to 14. Only three analysts recommended selling, one more than in the previous year.
The average price target increased from €17.44 to €26.13 during the year.

Free float rises anew

The convertible bond issued by KfW on 23 July 2009 and exchangeable for 54.1 mil-
lion Deutsche Post shares was converted in full by the bond creditors prior to the end
of July due to the strong performance of the stock. KfW’s stake thus dropped by 4.5 %
to 21.0 % in advance of the conversion deadline of 30 July 2014 with the according rise
in the free float to 79.0 %. The share of our stock held by private investors rose to 11.2 %
(previous year: 10.8 %). In terms of the regional distribution of identified institutional
investors, the highest percentage of shares (14.8 %) continues to be held in the United
Kingdom (previous year: 13.8 %). The share of US investors increased to 13.8 % (previous
year: 12.3 %) whilst that of institutional investors in Germany rose to 12.3 % (previous
year: 11.7 %). Our 25 largest institutional investors hold a total of 30.5 % of all issued shares.

Focused capital markets communication recognised

We again succeeded in demonstrating the potential of our company and its divisions
to the capital markets in the reporting year. In April, we held two Capital Markets
Tutorial Workshops – one in London and one in Frankfurt am Main – to ensure a
high level of transparency with regard to pensions and other provisions, including their
impact on the financial statements and free cash flow. In further tutorial workshops in
Leipzig and London in September, we explained the business model of our EXPRESS
division to investors and analysts with the aim of boosting confidence in the division’s
financial objectives. Our discussions regarding the MAIL division focused on medium-
term profit expectations and growth prospects for the parcel business. With respect to
the GLOBAL FORWARDING, FREIGHT division, discussions revolved around implemen-
tation of our strategic NFE project, and those regarding the SUPPLY CHAIN division
involved the prospects for growth and profitability.

We have further developed our investor targeting activities, holding a total of 566
one-on-one meetings at national and international conferences and road shows, 104 of
which involved members of our Board of Management. Our investor relations work was
recognised in the annual survey conducted by the Institutional Investor trade journal,
with both our CEO and IR team winning first place respectively in the transport sector
in a poll of sell-side analysts. In the opinion of their buy-side counterparts, Dr Frank
Appel and Lawrence Rosen also ranked amongst the top board members in the sector.
Our investor relations site took first place in the IR Global Rankings out of 300
participating companies in the category of “IR Website”. Furthermore, we have also
been providing up-to-date IR and financial media news for the iPad since June 2013.
In the reporting year alone, our free “DPDHL IR app” has been downloaded more than
2,000 times.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Employees

Group Management Report

NON-FINANCIAL FIGURES

Deutsche Post DHL not only wants to be an attractive investment for shareholders, it
also wants to become the employer of choice for employees and the provider of choice for
customers. Our services in the areas of Hr, diversity, health management, occupational
safety, service and quality play a key role in this endeavour. With programmes in the areas of
environmental protection, disaster management and education, the Group is also committed
to social responsibility.

Employees

“One Hr” – redesigning Hr

With excellent HR work, we intend to contribute to the performance of the Group
and its divisions, whilst safeguarding the balance between Group-wide harmonisation
and divisional / regional independence. In 2012, we began to transform the content
and structure of our Human Resources activities with the launch of our One HR pro-
gramme. Our objective is to create a globally integrated HR management and, over the
course of the reporting year, important steps were taken towards this goal: corporate
and divisional structures were redesigned, a cross-divisional HR decision-making body
was established, and a globally applicable HR process framework created.

In future, Group-wide strategies and standards will be introduced across all areas of
HR. Furthermore, we intend to take strategic action to achieve success by way of ten key
initiatives, including talent management, diversity and leadership development training.
These changes within the HR organisation are being accompanied by a batch of
measures, including a network of promoters set up specifically to help facilitate the
changes and a new training programme designed for all HR employees within the Group.

Employee opinion survey with good results
The annual results of our global employee opinion survey represent indicators relevant
for internal management. The objective is to measure employee commitment within the
Group and ensure it is further encouraged via appropriate measures. The conduct of
management is very important in this respect and it is for this very reason the “Active
Leadership” KPI is tied to management bonuses. Overall, the results were good across
the Group, with all areas rated as better than or unchanged from the prior-year results.
Participation during the reporting year lagged slightly behind that of the prior year as
a result of adjustments in communication and reporting practices.

a.64 Selected results from the employee opinion survey

Participation rate

KPI Active Leadership

KPI Employee Commitment

2012

2013

Group management, page 37

Deutsche Post DHL 2013 Annual Report

Group Management Report

Non-Financial Figures
Employees

Number of employees continues to rise slightly

As at 31 December 2013, we employed 435,285 full-time equivalents in more than

220 countries and territories, 1.7 % more than in the previous year.

a.65 Number of employees

At year-end

Headcount 1

Full-time equivalents 2

of which MAIL

EXPRESS

GLOBAL FORWARDING, FREIGHT

SUPPLY CHAIN

Corporate Center / Other

of which Germany

Europe (excluding Germany)

Americas

Asia Pacific

Other regions

Average for the year

Headcount

of which hourly workers and salaried employees

Civil servants

Trainees

Full-time equivalents

1 Including trainees.
2 Excluding trainees.

2012

2013

+ / – %

473,626

428,129

145,850

85,587

42,062

141,926

12,704

167,082

107,322

72,503

64,164

17,058

472,321

424,950

42,461

4,910

480,006

435,285

148,083

86,095

43,405

145,190

12,512

168,925

105,012

77,162

66,840

17,346

479,212

433,956

40,321

4,935

428,287

435,520

1.3

1.7

1.5

0.6

3.2

2.3

–1.5

1.1

–2.2

6.4

4.2

1.7

1.5

2.1

– 5.0

0.5

1.7

The majority of employees were hired in the SUPPLY CHAIN division as a result of
growth in new and existing business. The prior-year figure includes employees from
three companies that have since been divested.

The MAIL division saw increases because new personnel were hired, in particular

for the Parcel Germany business unit.

The number of full-time employees in the EXPRESS division increased slightly com-
pared with the previous year. This was necessary mainly in the area of operations due
to the increase in item volumes.

The GLOBAL FORWARDING, FREIGHT division reports a slight increase due merely

to a change in the recording of figures in the Americas.

We continue to employ most of our personnel in Germany, where our workforce
increased. Staff levels also rose in the Americas, Asia Pacific and Other regions. Our
workforce in Europe declined.

Current planning foresees another slight increase in the number of employees in

financial year 2014.

a.66 Employees by region, 2013 1

4 % Other

15 % Asia Pacific

18 % Americas

24 % Europe

(excluding Germany)

39 % Germany

1 As at 31 December; full-time equivalents.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Employees

Group Management Report

Note 14

Staff costs at prior-year level
At €17,785 million, staff costs remained at the prior-year level (€17,770 million).

a.67 Staff costs and social security benefits

€ m

Wages, salaries and compensation 1

Social security contributions

Retirement benefit expenses 1

Expenses for other employee benefits

Expenses for severance payments

Staff costs

1 Prior-year adjusted figures

Note 4.

2012

14,209

2,094

954

336

177

2013

14,307

2,111

883

357

127

17,770

17,785

Wage agreement concluded for Deutsche Post aG

In April 2013, Deutsche Post AG concluded a collective agreement with the trade
unions for around 130,000 employees. The long, 26-month term is a significant achieve-
ment. The agreement not only means commensurate compensation, it also creates plan-
ning certainty and stability for the company until mid-2015. Furthermore, the postal
allowance paid to civil servants as well as the remuneration for trainees and co-operative
education students was adjusted.

The Generations Pact, concluded between Deutsche Post AG and the trade unions
in 2011, continued to find acceptance amongst our workforce in the reporting year.
As at the end of the year, 1,429 employees have gone into partial retirement and 16,737
have set up a working-time account. Together with the competent authorities, we are
also working towards a comparable instrument for age-based working solutions for our
civil servants.

Systematically developing and promoting employees

We employ a multi-step system to develop and promote our employees at all levels.
In multi-day training workshops, top, upper and middle management learn how they
can further develop their personal approach to leadership based on an overarching
philosophy. As at the end of the reporting year, 1,128 executives had taken part in such
a workshop. We intend to further develop the programme and add associated meas-
ures in 2014. This success is also reflected in our internal placement rate for upper and
middle management, which was 90.3 % in the reporting year (previous year: 92.9 %).
11.0 % (previous year: 5.7 %) of the internal job placements involving these positions
were cross-divisional in 2013.

The “Certified International Specialist / Professional / Manager” training concept
forms a standardised basis for the functional and divisional training of all employees,
and was transferred to HR in the reporting year. With effect from 2014, it will support
our 5,500 HR employees during the upcoming changes and deepen their knowledge
in all important fields on multiple levels. The trainers will come exclusively from our
own ranks.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Non-Financial Figures
Employees

The systematic development and qualification of our workforce begins with an
apprenticeship. In the reporting year, we hired over 2,148 talented young individuals
for more than 20 apprenticeship schemes and 15 dual-study programmes, making
Deutsche Post DHL one of the largest companies providing opportunities for appren-
tices in Germany. We also use performance incentives to motivate our apprentices. The
top 5 % are fostered in our Top-Azubi talent programme. They receive additional support
from a “mentor”, have access to special seminars and receive an employment guarantee.
In 2013, around 1,371 young people were offered a full-time employment contract after
completing their apprenticeship.

A.68 Apprenticeship schemes
Deutsche Post DHL, worldwide 1

5.6 % Warehousing

logistics specialists
5.7 % Duale Hochschule

students
7.0 % Forwarding and
logistics services
specialists

30.9 % Other apprentice-

ship schemes

50.8 % Courier, express

and postal services
specialists

Rewarding good ideas

Group-wide Idea Management boosts our innovative strength and improves our
ability to compete in the market. Employees in 37 countries are now able to participate.

1 Number of apprentices, annual average: 4,935.

A.69 Idea management

Suggestions for improvements

Accepted suggestions for improvements

Rate of implementation

number

2012

165,124

133,698

81.0

2013

124,834

106,248

85.1

Seeing diversity as potential

We foster diversity by means of our systemtic management approach. It is a constit-
uent part of our corporate identity and contributes to an open corporate culture. The
Group’s declaration on “Diversity & Inclusion”, which was approved and communicated
around the world in the summer of 2013, demonstrates how important diversity is to
the Board of Management.

We want to raise awareness amongst our staff of the sheer potential that diversity
offers our company. To this end, we have developed, amongst other things, executive
training programmes for integration into existing development programmes.

A.70 Employees with a disability (Deutsche Post AG) 1

Mandatory workplaces

Employment rate

1 In accordance with § 80 German Social Code IX.
2 Adjusted.

Headcount

2011 2

13,199

8.3

2012

13,740

8.6

2013

14,170

8.7

Since the end of 2011, we have taken measures to sustainably increase the num-
ber of women in executive positions: we have made a commitment with regard to fill-
ing executive positions, introduced a system of key figures and installed mentoring
programmes. Furthermore, we are supporting women’s networks and we have
made Group-wide diversity training focusing on gender available for executives. On
31 December 2013, the proportion of women in executive positions worldwide was
19.6 %, an increase compared with 17.6 % in 2011.

A.71 Gender distribution
in management 1, 2013

19.6 % Women

80.4 % Men

1 Based on upper and middle management.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Employees
Health and safety

Group Management Report

Work-family balance is an essential aspect of what makes us an attractive employer.
We succeed in meeting the needs of our employees by offering flexible working hour
models and consistently improved childcare options.

a.72 Work-family balance 1

Headcount

State-regulated parental leave

of which men

of which women

Unpaid holiday for family reasons

Part-time employees 2

Share of part-time employees (%)

1 Includes employees of Deutsche Post AG.
2 Excludes employees in the release phase of partial retirement.

2012

1,718

155

1,563

2,150

62,523

37.0

2013

1,579

146

1,433

1,966

63,169

36.8

The average annual employment rate of people with a disability was 8.7 % at
Deutsche Post AG in 2013, again well above the national average in the German private
sector (4.0 % in 2011, source: Bundesagentur für Arbeit (German federal employment
agency)).

Health and safety

a.73 Illness rate 1

Group-wide health and safety strategy adopted

2013

2012

8.4 %

7.6 %

1 All organisational units in Germany.

In the reporting year, we approved a global health and safety strategy based on
the “Healthy Workplace” model set out by the World Health Organisation. It integrates
the four areas of workplace design, corporate culture, strengthening individual health
resources and supporting the entire community. We focus on prevention in order to
address risks which could impact health and productivity – aiming to limit an increase
in insurance and treatment costs in the process.

In Germany, for example, we have for many years employed a management system
that uses local Health Work Groups to implement a broad spectrum of measures to pro-
mote health and prevent accidents. In this way alone, our health and safety organisation
initiates up to 40,000 health promotion measures on an annual basis.

The illness rate in our company in Germany was in line with the general trend, rising
to 8.4 % (previous year: 7.6 %). The increase was due to the rising proportion of older
employees, a severe flu outbreak and an increase in accidents due to the harsh winter.

Contributing to a safe work environment

Our goal is to prevent occupational risks and design a safe and healthy workplace
for our employees. To this end, for example, we analyse accidents in detail and use the
results to develop suitable preventative measures. As a logistics company, we focus on
safe and trouble-free transport processes at our facilities, as well as on road safety. Our
processes have to undergo critical appraisal on a regular basis.

Deutsche Post DHL 2013 Annual Report

Group Management Report

a.74 Occupational safety 1

Number of workplace accidents 2

Accident rate (number of accidents per 1,000 employees per year)

Number of working days lost due to accidents (calendar days)

Working days lost per accident

Number of fatalities due to workplace accidents

1 Includes employees of Deutsche Post AG.
2 Accidents when at least one working day is lost, including accidents on the way to and from work.
3 Adjusted.
4 As at 2 January 2014. Subject to change if later reports received.

2012 3

14,441

2013 4

15,765

313,750

359,452

21.7

22.8

Corporate responsibility

Focusing on corporate responsibility

Part of our Group strategy is to exemplify our corporate responsibility. We achieve
this by combining profitability with sustainability. The importance this has for our busi-
ness activities is demonstrated in our Code of Conduct, which is guided by the principles
of the Universal Declaration of Human Rights, the United Nations (UN) Global Compact,
the Inter national Labour Organisation (ILO) convention and the OECD guidelines for
multinational companies. We also take the various interests of our stakeholders into
account. In order to more accurately understand their needs, we asked our stake holders
to participate in a survey for the first time in the year under review. The results were
systematically recorded in a Materiality Analysis and are presented in our 2013 Corporate
Responsibility Report.

Our approach to value creation is to ensure that our business activities benefit both
society and the environment whilst at the same time solidifying our market position.
We pursue this approach by means of our activities in the area of environmental and
climate protection as well as through our sustainable products and services. In addition,
we systematically and continuously track developments in areas such as labour, health,
safety, procurement and compliance to enable us to more quickly and comprehensively
identify opportunities and risks relevant to our business. Furthermore, the Corporate
Citizenship department comprises activities in the area of education and emergency
assistance for natural disasters as well as local environmental protection and aid projects
in which our employees get involved.

Slight rise in greenhouse gas emissions due to better utilisation
of our own aircraft capacity
We aim to reduce our dependency on fossil fuels, improve our CO2 efficiency
and lower costs. We have anchored these goals throughout the entire Group with our
GoGreen environmental protection programme. Our “green” products and services help
customers achieve their own environmental targets whilst concurrently opening up new
business opportunities to us. By the year 2020 we intend to improve the CO2 efficiency
of our own operations and those of our subcontractors by 30 % compared with 2007.

We quantify our greenhouse gas emissions based upon the principles of the GHG
Protocol Corporate Standard and the DIN EN 16258 standard. In our European air
freight business, this also includes the requirements of the European Union Emissions
Trading System (EU ETS). Pursuant to DIN EN 16258, all gases that are harmful to the
environment must be disclosed in the form of CO2 equivalents (CO2 e). In 2013, our

Non-Financial Figures
Health and safety
Corporate responsibility

dpdhl.com/en/responsibility

Page 88 ff.

a.75 Co2 e emissions, 2013

Total: around 5.6 million tonnes 1

14 % Real estate

22 % Road transport

64 % Air transport

1 Scopes 1 and 2.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Corporate responsibility

Group Management Report

direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions amounted to approx-
imately 5.6 million tonnes (previous year: 5.4 million tonnes of CO2 e). These emissions
were a result of the fuel consumption of our fleet and energy consumption in our build-
ings. Our emissions increased by 3.7 % due mainly to better utilisation of our own air-
craft (Scope 1) in meeting demand. This reflects the EXPRESS division’s above-average
performance. At the same time, we have avoided 0.5 million tonnes of CO2 e by using
electricity from renewable sources.

a.76 Fuel and energy consumption

Consumption by fleet

Air transport (jet fuel)

2012

2013

million kilograms

1,059.0

1,131.8

Road transport (petrol, biodiesel, diesel, bio-ethanol, LPG)

Road transport (biogas, CNG)

million litres

million kilograms

Energy for buildings and facilities (including electric vehicles)

million kilowatt hours

472.3

2.2

3,127

476.8

3.2

3,394

dpdhl.com/en/responsibility

The basis for calculating our CO2 emissions and the changes in our CO2 efficiency
as well as detailed consumption data are available in the Corporate Responsibility Report.

Using our expertise and network for social responsibility

As part of a public-private partnership, we support the UN in disaster management
free of charge as part of our GoHelp Group programme. At airports selected in conjunc-
tion with the UN, our professional logistics experts hold multi-day workshops known as
Get Airports Ready for Disaster (GARD) to help prepare the airport personnel for dis aster
scenarios. During the workshops, risk analyses are developed and measures prepared
that can increase the capacity and efficiency of the airport in the event of disaster. In
2013, six airports in El Salvador, the Philippines, Armenia and Panama were examined.
Disaster Response Teams provide immediate assistance on site when disaster strikes.
Our worldwide network is made up of more than 400 volunteer logistics specialists
who can be deployed to a disaster area within 72 hours of receiving the call from the
UN. Once on site, they support relief organisations by taking over airport logistics. In
2013, our DRT s were deployed to Chile after the forest fires and to the Philippines after
the devastating Typhoon Haiyan.

As one of the world’s largest employers, we want to improve the education and em-
ployability of young people. We are a partner of the Teach For All and SOS Children’s
Villages organisations and over the course of the reporting year we supported organ-
isations in 21 countries. We entered into new partnerships with SOS Children’s Villages
in Uganda, Ethiopia, Jordan, Morocco, Peru, Costa Rica and Panama. The co-operation
agreement between Deutsche Post DHL and Teach For All was extended for another
three years in 2013. We have recently started co-operating with Teach for the Philippines.
Our financial support is supplemented by commitment from our employees as part of
local partnerships.

With Global Volunteer Day, where around 100,000 employees were active during
the reporting year, and the Living Responsibility Fund, we support our employees’
volunteering activities. The We Help Each Other (WHEO) fund enables employees to
donate money for colleagues affected by a natural disaster.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Non-Financial Figures
Corporate responsibility
Procurement

Our corporate responsibility – globally acknowledged

International investors and analysts monitor and evaluate how sustainable a com-
pany’s business is. Based on our commitment in the reporting year, we were again listed
in the FTSE4Good and MSCI sustainability indices and achieved a very good ranking in
the CDP Global 500 Climate Disclosure Leadership Index. We were the only company
in our sector to receive the top “AAA” ranking from MSCI in 2013. In addition, the
leading sustainability research company Sustainalytics evaluated our overall corporate
responsibility and environmental activities as “Industry Leader”. Other independent
institutions also rated our activities: our GoGreen environmental protection programme,
for example, was awarded the international Green Brands eco-label in 2013. Moreover,
we are ranked 23rd of 70 international corporations in the Good Company Ranking
published by communications agency Kirchhoff Consult AG. Please see our Corporate
Responsibility Report for additional results.

dpdhl.com/en/responsibility

Procurement

Expenditure at prior-year level

a.77 Procurement expenses, 2013

In the year under review, the Group centrally purchased goods and services with a

Volume: €9.4 billion

8 % Production systems
8 % Network supplies

10 % Air fleet
10 % Real estate

13 % Ground fleet

13 % Transport services

14 % IT and communications

24 % Services

Objectives and strategies, page 33

Objectives and strategies, page 34

total value of approximately €9.4 billion (previous year: €9.5 billion).

Procurement helps the divisions to reduce expenditure and make cost-effective
investments. It has supported the EXPRESS division in the area of aviation for years. In
the reporting year, a global tender was put out for divisional kerosene requirements. As
a result, costs were reduced by around €3.6 million. A further €4.5 million was saved
by purchasing new aviation ground support equipment.

Procurement once again supported the MAIL division in the selection and order
placement process for sorting solutions. In order to expand capacities in the parcel net-
work, the equipment at 20 facilities was expanded or retrofitted. Moreover, we selected
suppliers with whom a number of technical solutions are being tested. Procurement
also supported the ADAC Postbus project team during contract negotiations. As a result,
the costs initially calculated were reduced.

Procurement helped the GLOBAL FORWARDING, FREIGHT division with its New
Forwarding Environment project, leading negotiations and providing support in imple-
menting the future IT system.

The Group put out a global tender for the acquisition of IT hardware, which allowed
us to both reduce prices and increase product quality. The supplier base was expanded
and the hardware standardised.

The financing and payment model Supplier Finance, which is in place in parts
of Europe, the United States, South Korea and the People’s Republic of China, was
deployed in the United Kingdom and Turkey in the reporting year. It allows the divisions
to improve their working capital and suppliers to benefit from favourable financing
conditions.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Procurement

Group Management Report

Procurement organisation adapted to regional requirements

Procurement is a centralised function in the Group. In the reporting year, the
Global Sourcing IT and Telecommunications department was added to the Procurement
organisation. This allows us to pool our expertise in the area of IT, which is consistently
growing in strategic importance. Corporate Category Management now comprises
three Global Sourcing departments which work closely with the four procurement
regions. All report to the head of Corporate Procurement. In Asia, we outsourced the
catalogue-based ordering system to an external provider, which now serves the eleven
countries with the highest procurement rate in the Asia-Pacific region from its base in
Nanhai, China. As a result, we are able to respond even more flexibly and quickly to the
strong growth in this market. In contrast, we pooled our purchasing into three regional
centres in the Americas and Europe.

Procurement considers environmental aspects

When purchasing products and services, Procurement works closely together
with those responsible for the various product categories and regions in order to take
environ mental aspects into consideration. Our goal is to increase the proportion of
energy we consume from renewable resources and over the course of the reporting year,
we began laying the necessary legal groundwork to realise this. In addition to several
countries in Europe, we are also gradually converting to green electricity in the United
States at present. In the reporting year the operational fleet was also modernised. 8,956
emission-efficient Euro class 5 and 6 vehicles were put into operation in Germany. In
addition, a total of 121 electric vehicles and three natural gas vehicles were procured and
are being tested on delivery routes. We describe various projects and the CO2 savings
achieved in our Corporate Responsibility Report.

Procurement systems further expanded

The use of IT applications to procure goods and services more efficiently increased
again in the reporting year. For instance, our electronic ordering system “GeT” is now
available in the 46 countries with the highest procurement rates. This improves our
procurement worldwide.

Suppliers required to comply with Code of Conduct

An essential component of our supplier contracts is the Code of Conduct for sup-
pliers, which defines the Group’s ethical and environmental standards. It includes an
explicit ban on child and forced labour. Furthermore, suppliers agree to comply with
all valid environmental, labour and health regulations, the international anti-corrup-
tion standards in the United Nations Global Compact as well as local anti-corruption
laws, and refrain from all forms of discrimination based on race, religion, disability, age,
sexual orientation or gender.

dpdhl.com/en/responsibility

Deutsche Post DHL 2013 Annual Report

Group Management Report

Non-Financial Figures
Customers and quality

Customers and quality

Innovative technology translates into competitive advantage
in the mail and parcel business

We operate a first-class, efficient and environmentally friendly nationwide transport
and delivery network in Germany consisting of 82 mail centres and 33 parcel centres
that process 64 million letters and in excess of 3.4 million parcels each working day. In
the reporting year, the high level of automation in our mail business, which exceeds 90 %,
saw a further slight increase. In our parcel network, we have meanwhile increased our
overall sorting capacity by almost 30 % by upgrading existing facilities.

Our customers rate the quality of our services based on whether posted items reach
their destinations quickly, reliably and undamaged. We again achieved excellent results
in letter transit times within Germany: according to surveys conducted by the quality
research institute Quotas, 94 % of the letters posted during our daily opening hours or
before final post box collections are delivered to their recipients the next day. This places
us far above the legal requirement of 80 %. In order to ensure this level of quality in the
long term, our quality management is based on a system that is certified each year by
TÜV NORD, a recognised certification and testing organisation.

In the parcel business, items usually reach their recipients the next working day. This
is based on parcels that were collected from business customers and that were delivered
the next day. Our internal system for measuring parcel transit times has been certified
by TÜV Rheinland since 2008.

Transit times for international letters are determined by the International Post

Corporation. Here, we rank amongst the top postal companies.

In 2013, E-Postbrief was developed into E-POST with a series of user-friendly
services: with E-POST, small and medium-sized companies can send items directly from
their usual company software, either digitally or by conventional post, digitise and safely
store consumer documents, and pay invoices using invoice recognition.

The average weekly opening time of our 26,000-plus sales points was 55 hours in
the reporting year (previous year: 52 hours). The annual survey conducted by Kunden-
monitor Deutschland, the largest consumer study in Germany, also showed a high
acceptance of our exclusively partner-operated retail outlets: over 91 % of customers
were satisfied with our quality and service (previous year: 92 %). In addition, impartial
mystery shoppers from TNS Infratest tested the postal outlets in retail stores around
26,000 times over the year. The result showed that more than 94 % of customers were
served within three minutes.

A central characteristic of the quality of our products is environmental protection. As
such, we employ a TÜV NORD-certified environmental management system in our mail
and parcel businesses in Germany. Our GoGreen products offer private and business
customers climate-neutral shipping options. Moreover, with over 200 vehicles, we
operate one of the largest electric vehicle fleets in the world. Bonn, Germany, where
our corporate headquarters are based, is the first city, in which we have begun to con-
vert our entire delivery operations to run using electric vehicles. Furthermore, we use
innovative technologies in our buildings and operating facilities, such as LED, and we
have also increased our use of renewable energies.

Corporate responsibility, page 79 ff.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Customers and quality

Group Management Report

Service quality translates into competitive advantage in the express business

We want to offer our customers the best possible service quality all around the
world and therefore place high demands on our products, processes, infrastructure
and employees. Therefore, we keep a constant eye on the changing requirements of our
customers, for example, through our new Insanely Customer Centric Culture (ICCC)
programme. Whenever our employees – as couriers, in customer service or in sales – are
in contact with a customer, their feedback is documented, evaluated and made available
to all responsible departments within the company. This allows us to continuously trans-
late customer feedback into improvements.

Online, we provide the MyDHL portal as well as the Small Business Solutions section
of our website. These portals make it easier for, above all, small and medium- sized busi-
ness customers to send their shipments. They also receive comprehensive information on
the topic of shipping. We use quality control centres to track shipments worldwide and
dynamically adjust our processes. Should unforeseen events occur, flight and shipment
routes can be altered immediately. Our standard service includes tracking all premium
products – for example, Medical Express shipments – until they are delivered. In the case
of sensitive shipments, we also immediately take all necessary measures to ensure that
they reach the recipient at the agreed time and in the agreed quality.

Our operational safety, compliance with standards and the quality of service at our
facilities are reviewed regularly in co-operation with government authorities. More than
240 locations – around half of which are in Europe – have been certified by the Trans-
ported Asset Protection Association (TAPA), one of the world’s most renowned safety
associations, making us the leader in this area. In 2010, we began recording all certi-
fication processes using a uniform system, and managing them globally. We received
global ISO 9001:2008 certification for our systems in the reporting year. This validated
our policy of harmonising quality standards. Furthermore, we renewed the ISO 9001
and 14001 standards for Europe.

Better performance translates into competitive advantage
in the freight forwarding business

In order to support a culture of customer advocacy, we conduct biennial surveys
to determine customer satisfaction with our services. Moreover, during the reporting
year we launched a project called Net Promoter Approach, which sees customers rate
the performance of our services immediately after interacting with us. The knowledge
gained is used immediately to adapt local services where necessary and improve internal
processes.

To further improve our performance, we apply the First Choice Way. By 2013, over
5,000 employees trained in this methodology were employed in our operations and
in the reporting year more than 1,200 improvements were made. The vast majority of
the division’s operating performance indicators exceeded our forecasts over the year as
a whole. For example, the rate of customer complaints that were resolved successfully
improved on the prior year by nearly one-fifth to approximately 78 %.

With the help of our customers, we intend to stabilise processes and improve our
performance. Currently more than 150 initiatives are underway worldwide. For instance,
the Brazilian team that services a global hardware manufacturer improved the customs
clearance process by reducing processing time by 48 % and enabling 98 % of the files to be
cleared within the target cycle time. Our customers value our continuous improvements
and in 2013, we again received numerous awards for these efforts.

Objectives and strategies, page 31

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Customers and quality
Brands

Objectives and strategies, page 31 ff.

Group Management Report

Quality translates into competitive advantage in the supply chain business
In line with our Group strategy, we also want to be the provider of choice in the
SUPPLY CHAIN division. We therefore implement practices and methodologies that
provide our customers with the highest level of service and the most added value. We
use globally tested processes to allow us to offer our customers everywhere comparable
solutions and uniformly high service standards.

In order to measure and monitor the quality of our service, we have defined a num-
ber of performance indicators for the division. These include safety, productivity and
inventory accuracy. In 2013, we again achieved more than 95 % of our service standards
worldwide. Seven out of ten customers surveyed confirmed that DHL is their provider
of choice in the supply chain business.

With our Path to Quality programme, which we introduced in 2011, we are con-
stantly improving the already high quality of our services and thus ensuring the con-
sistency, transparency and simplicity of logistics processes. The results achieved using
the Path to Quality system have been met with broad recognition amongst customers.

Brands

a.78 Brands and business units

Brand

Division

Brand area

MaIL

• Mail

Communication

• Dialogue
Marketing
• Press Services
• Philately
• Pension Service

• Global Mail
• Parcel Germany

eXpress

GLoBaL ForWarDInG,
FreIGHt

• Express

• Global

Forwarding

• Freight

suppLY CHaIn

• Supply
Chain

Sub-brand

• Williams Lea

DHL’s brand value climbs higher

In order to remain the postal service for Germany (Die Post für Deutschland) and
become the logistics company for the world, we aim to strengthen the image and value
of our Deutsche Post and DHL brands. We succeeded in doing this again in the reporting
year, as has been reflected in independent studies.

According to the BrandZ study conducted by the market research institute Millward
Brown, the DHL brand climbed two places to 98th on the list of most valuable brands in
the world and its value increased by 17.6 % to US $8.9 billion. Millward Brown calculates
brand value based on the current financial situation along with the contribution the
brand makes to the company’s business success.

Deutsche Post DHL 2013 Annual Report

Non-Financial Figures
Brands

Group Management Report

a.79 Marketing expenditures, 2013

Volume: around €341 million

6.8 % Corporate wear

15.6 % Other
18.4 % Public & customer
relations

59.2 % Product develop-
ment and
communication

Page 31 ff.

In 2013, consulting firm Semion Brand-Broker calculated that Deutsche Post’s
brand value had remained unchanged at €13,067 million. This again ranks us number
six amongst the most valuable German brands. Factors analysed included financial value,
brand protection, brand image and brand strength.

In total, we invested around €341 million (previous year: €341 million) into building

and expanding our brands internationally.

Sports activities strengthen identity with the Deutsche Post brand

Motivated employees understand that they are brand ambassadors who play a role
in winning over and retaining customers. At Deutsche Post, the internal motivational
platform known as the Deutsche Post Fan Club plays a considerable role in strengthen-
ing employee identity with the brand. Through this programme, we support employee
participation in recreational sports and fan activities in the community. After five years,
the response amongst the staff has been impressive, with more than 10,000 football
players, nearly 9,000 runners and around 3,200 cyclists taking part in activities in the
reporting year. Furthermore, many employees joined their colleagues to attend Deutsche
Fußball-Bund (DFB – German football federation) cup matches, international football
matches and Deutsche Tourenwagen-Masters (DTM – German Touring Car Masters)
races, of which we are a sponsor.

At the DTM final 2013 at Germany’s Hockenheimring race track, the Deutsche Post
brand secured its first victory as a team partner of BMW. Our co-operation with the DFB
was also a success in 2013: the German women’s national football team won the Euro-
pean Championship and the men’s team qualified for the 2014 FIFA World Cup Brazil™.

An expanding product portfolio
We are systematically expanding our business and have detailed this in the Objectives
and strategies chapter. For example, the online supermarket Allyouneed.com has been
positioned as a modern alternative to traditional food retailing. During the reporting
year, market research was undertaken to determine the potential of this offer, more-
over, we have already increased awareness and reach within the target group with tar-
geted PR and marketing campaigns. In October 2013, we entered the deregulated coach
market with the ADAC Postbus. Over and above the eye-catching design of the coaches
in Deutsche Post yellow, advertising in this early phase is primarily concentrated on
regional communication in the areas where we are expanding our network of bus routes.

Global online DHL BranD campaign

Building on the worldwide digital strategy for the DHL brand that was developed in
the previous year, we have set our global marketing campaign on a new online course:
since the autumn of 2013, we have, for example, advertised our online benchmarking
tool on banners in international business magazines. A tool which provides above all
medium-sized companies with valuable exposure for their international business, whilst
connecting them to the DHL brand.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Performance Indicators
Brands

Post-Balance-Sheet Date Events

Sponsorship establishes DHL’s logistics expertise

DHL sponsorship goes beyond financial support; as a general principle, sponsorship
must also underscore our logistics expertise. In addition to our existing global logistics
partnerships – such as with Formula 1®, IMG Fashion Weeks and the Leipzig Gewand-
hausorchester – we showcased our brand at 130 events in more than 40 countries in 2013.
For 2014, we have entered into a global logistics partnership with the new FIA Formula E
World Championship, the world’s first fully-electric car racing series. With effect from
September 2014, DHL will handle the efficient and environmentally friendly transport
of the vehicles and equipment to the ten race locations around the world.

POST-BALANCE-SHEET DATE EVENTS

Ordinary capital increase resolved

On 20 February 2014, the Board of Management, subject to the consent of the
Super visory Board, resolved upon an ordinary increase in capital from Authorised
Capital 2013 by 656,915 no par-value shares in order to service the 2009 tranche of
the share-based payment system for executives (Share Matching Scheme) due on
1 April 2014. The planned dividend payment will increase by €525,532 as a result.

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Overall Board of Management assessment of opportunity and risk situation
Opportunity and risk management processes

Group Management Report

Financial position, page 54 f.

OPPORTUNITIES AND RISKS

Overall Board of Management assessment
of opportunity and risk situation

No foreseeable risk to the Group

Identifying opportunities and risks – and swiftly capitalising upon or counteracting
them – is an important objective for our Group. This is why we already account for
the anticipated impact of potential events and developments in our current business
plan. The opportunities and risks reported here represent additional potential deviations
from the Group’s projected earnings. In consideration of our current business plan, the
Group’s overall opportunity and risk situation has not changed significantly compared
with last year. No new risks have been identified that could have a potentially critical
impact on the Group’s result. Based on the Group’s early warning system and in the
estimation of its Board of Management, there were no identifiable risks for the Group
in the current forecast period which, individually or collectively, cast doubt upon the
Group’s ability to continue as a going concern. Nor are any such risks apparent in the
foreseeable future. The assessment of a stable to positive outlook is moreover reflected
in the Group’s credit ratings.

Opportunity and risk management processes

Uniform reporting standards for opportunity and risk management

As an internationally operating logistics company, we are faced with numerous
changes. Our aim is to identify the resulting opportunities and risks at an early stage
and take the necessary measures in the specific areas affected in due time to ensure that
we achieve a sustained increase in enterprise value. Our Group-wide opportunity and
risk management system facilitates this aim. Each quarter, managers estimate the impact
of future scenarios, evaluate opportunities and risks in their departments and present
planned measures as well as those already taken. Queries are made and approvals given
on a hierarchical basis to ensure that different managerial levels are involved in the
process. Opportunities and risks can also be reported at any time on an ad hoc basis.

Our early identification process links the Group’s opportunity and risk manage-
ment with uniform reporting standards. We continuously improve the IT application
used for this purpose. Furthermore, we use a Monte Carlo simulation for the purpose
of aggregating opportunities and risks in standard evaluations.

This stochastic model takes the probability of occurrence of the underlying risks
and opportunities into consideration and is based on the law of large numbers. From
the distribution function of each individual opportunity and risk one million randomly
selected scenarios – one for each opportunity and risk – are combined. The resulting
totals are shown in a graph of frequency of occurrence. The following graph shows an
example of such a simulation:

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Opportunity and risk management processes

a.80 Monte Carlo simulation

Frequency of occurrence
in one million simulation steps (incidence density)

Bandwidth with 95 % probability

– aa € m

+ bb € m

+ zz € m

Deviation from planned EBIT

Planned EBIT
“Worse than expected”

“Better than expected”

Most common value in one million simulation steps (“mode”)

a.81 Opportunity and risk management process

1 Identify and assess
Assess

Define measures

Analyse

Identify

5 Control
Review results

Review measures

Monitor early warning indicators

Internal
auditors
review
processes

2 Aggregate and report
Review

Supplement and change

Aggregate

Report

3 Overall strategy / risk
management / compliance
Determine
Manage

4 Operating measures
Plan

Implement

Divisions

Opportunity and risk-controlling processes

Board of Management

Internal auditors

The most important steps in our opportunity and risk management process are:
1 Identify and assess: Opportunities and risks are defined as potential deviations from
projected earnings. Managers in all divisions and regions provide an estimate of
our opportunities and risks on a quarterly basis and document respective actions.
They use scenarios to assess best, expected and worst cases. Each identified risk is
assigned to one or more managers, who assess it, monitor it, specify possible pro-
cedures for going forwards and then file a report. The same applies to opportunities.
The results are compiled in a database.

2 Aggregate and report: The controlling units responsible collect the results, evaluate
them and review them for plausibility. If individual financial effects overlap, they
are noted in our database and taken into account when compiling them. After being
approved by the department head, all results are passed on to the next level in the
hierarchy. The last step is complete when Corporate Controlling reports to the

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Opportunity and risk management processes

Group Management Report

Group’s Board of Management on significant opportunities and risks as well as
on the potential overall impact each division might experience. For this purpose,
opportunities and risks are aggregated for key organisational levels. We use two
methods for this. In the first method, we calculate a possible spectrum of results for
the divisions and add the respective scenarios together. The totals for “worst case”
and “best case” indicate the total spectrum of results for the respective division.
Within these extremes, the total “expected cases” shows current expectations. The
second method makes use of a Monte Carlo simulation, the divisional results of
which are regularly included in the opportunity and risk reports to the Board of
Management.

3 Overall strategy: The Group Board of Management decides on the methodology that
will be used to analyse and report on opportunities and risks. The reports created
by Corporate Controlling provide an additional regular source of information to
the Board of Management for the overall steering of the Group.

4 Operating measures: The measures to be used to take advantage of opportunities and
manage risks are determined within the individual organisational units. They use
cost-benefit analyses to assess whether risks can be avoided, mitigated or transferred
to third parties.

5 Control: For key opportunities and risks, early warning indicators have been defined
that are monitored constantly by those responsible. Corporate Internal Audit has
the task of ensuring that the Board of Management’s specifications are adhered to.
It also reviews the quality of the entire opportunity and risk management operation.
The control units regularly analyse all parts of the process as well as the reports from
Internal Audit and the independent auditors with the goal of identifying potential
for improvement and making adjustments where necessary.

Internal accounting control and risk management system

(Disclosures required under section 315 (2), number 5 of the Handelsgesetzbuch

(HGB – German Commercial Code) and explanatory report)

Deutsche Post DHL uses an internal accounting control system to ensure that Group
accounting adheres to generally accepted accounting principles. This system is intended
to make sure that statutory provisions are complied with and that both internal and
external accounting provide a valid depiction of business processes in figures. All figures
are to be entered and processed accurately and completely. Accounting mistakes are to
be avoided in principle and significant assessment errors uncovered promptly.

The control system design comprises organisational and technical measures that
extend to all companies in the Group. Centrally standardised accounting guidelines
govern the reconciliation of the single-entity financial statements and ensure that inter-
national financial reporting standards (EU IFRS s) are applied in a uniform manner
throughout the Group. All Group companies are required to use a standard chart of
accounts. We immediately assess new developments in international accounting for
relevance and announce their implementation in a timely manner, for example, in
monthly newsletters. Often, accounting processes are pooled in a shared services centre
in order to centralise and standardise them. The IFRS financial statements of the separate
Group companies are recorded in a standard, SAP-based system and then processed at
a central location where one-step consolidation is performed. Other components of
our control system include automatic plausibility reviews and system validations of the
accounting data. In addition, manual checks are carried out regularly at a decentralised

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Opportunity and risk management processes

level by those responsible locally (by a chief financial officer, for example) and at a
central level by Corporate Accounting and Reporting, Taxes and Corporate Finance at
the Corporate Center.

Over and above the aforementioned internal accounting control system and risk
management structures, Corporate Internal Audit is an essential component of the
Group’s controlling and monitoring system. Using risk-based auditing procedures,
Corporate Internal Audit regularly examines the processes related to financial report-
ing and reports its results to the Board of Management. Upstream and downstream
checks and analyses of the reported data are performed under chronological aspects.
If necessary, we call in outside experts, for instance in the case of pension provisions.
Finally, the Group’s standardised process for preparing financial statements using
a centrally administered financial statements calendar guarantees a structured and
efficient accounting process.

Reporting opportunities and risks

Identifying opportunities and risks – and swiftly capitalising upon or counteracting
them – is a key objective for our Group. This is why we account for the anticipated im-
pact of potential events and developments in our current business plan as well as in our
revenue and earnings projection. In the following we primarily report those risks and
opportunities which, from the current standpoint, could have an additional significant,
potentially positive or negative, impact during the current forecast period.

We assess opportunities and risks based on their probability of occurrence and
impact. Subsequently, we distinguish between opportunities and risks of low, medium
and high relevance. We characterise opportunities and risks of medium and high
relevance as significant.

The opportunities and risks described here are not necessarily the only ones the
Group faces or is exposed to. Our business activities could also be influenced by add-
itional factors of which we are currently unaware or which we do not yet consider to
be material.

Opportunities and risks are identified and assessed decentrally at Deutsche Post DHL.
Reporting on possible deviations from projections, including latent opportunities and
risks, occurs primarily at the country or regional level. In view of the degree of detail
provided in the internal reports, decentrally reported opportunities and risks are com-
bined into categories below for the purposes of this report. It should be noted that the
underlying individual reports – with the exception of those on the world economy
and global economic output – usually exhibit a zero to minimal correlation. It is rather
unlikely that a number of major risks in one category or across categories would occur
at the same time.

Unless otherwise specified, within the current forecast period a low relevance is
attached to individual opportunities and risks and a medium relevance to the respective
categories. The opportunities and risks generally apply for all divisions, unless indicated
otherwise.

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Opportunities

Group Management Report

Opportunities

Opportunities arising from market trends and our market position

A variety of external factors offer us numerous opportunities, indeed we believe that
the global market will grow. Advancing globalisation means that the logistics industry
will continue to grow at least as fast or faster than the world economy as a whole. This is
especially true for Asia, where trade flows to other regions and in particular within the
continent will continue to increase. As the market leader, our DHL divisions can generate
above-average benefits from this. This also applies to regions such as South America and
the Middle East, which continue to see robust growth. We are similarly well positioned
in the emerging economies of Brazil, Russia, India, China and Mexico (BRIC+M) and
will take advantage of opportunities arising in these markets.

Whether and to what extent the logistics market will grow is dependent on a num-
ber of factors. The trend towards outsourcing business processes continues. As a result,
supply chains are becoming more complex and more international but are also more
prone to disruption. For this reason, customers want stable, integrated logistics solutions,
which is what we provide with our broad-based service portfolio. We continue to see
growth opportunities in this area, in particular in the SUPPLY CHAIN division and as a
result of closer co-operation between all our divisions.

The booming online marketplace represents another opportunity for us in that it is
creating demand for transporting documents and goods. The B2C market is experiencing
double-digit growth, particularly due to the rapid rise in digital retail trade. This has
created high growth potential for the national and international parcel business, which
we intend to tap into by expanding our parcel network.

Our customers want to improve their carbon efficiency and be supplied with infor-
mation on their CO2 emissions. Such an increase in environmental awareness presents
new business potential: with our own mail, parcel and express products as well as air and
ocean freight transport, we not only lead our industry in the areas of energy-efficient
transport, transparent emissions reports and climate-neutral products, but we also offer
customer-specific solutions to reduce carbon emissions.

Opportunities from improved internal processes

Volumes and costs have a critical impact on our result. Should we succeed in align-
ing our internal processes to meet customer needs whilst simultaneously lowering costs,
this could lead to positive deviations from current projections. We are steadily improv-
ing internal processes with the help of our First Choice initiatives. This improves customer
satisfaction and reduces our costs at the same time. Our earnings projection already
incorporates expected cost savings.

Opportunities from pending legal proceedings

On 25 January 2012, the European Commission issued a ruling on the formal
investigation regarding state aid that it had initiated on 12 September 2007. It con-
cluded that Deutsche Post AG had received illegal state aid, which it is to repay to the
Federal Republic of Germany; in addition, it must also be ensured that no benefits are
received in the future which could be considered illegal state aid. Deutsche Post AG is
of the opinion that the state aid decision cannot withstand legal review and has filed an
appeal with the European Court of Justice. The Federal Republic of Germany has like-
wise appealed the decision. To implement the state aid ruling, the federal government
called upon Deutsche Post AG on 29 May 2012 to make a payment of €298 million,

Glossary, page 218

Objectives and strategies, page 31

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Opportunities

including interest. Deutsche Post AG paid this amount to a trustee on 1 June 2012
and appealed the recovery order to the Administrative Court. The appeal, however,
has been suspended pending a ruling from the European Court. The company made
additional payments of €19.4 million and €15.6 million to the trustee on 2 January 2013
and 2 January 2014, respectively. The payments made were reported in the balance
sheet under non-current assets; the earnings position remained unaffected. More
information about the state aid investigation and the risks resulting from it as well as
other legal proceedings is provided in the section Risks from pending legal proceedings
as well as in the Notes.

On the other hand, the opportunity exists that the payment of €298 million and the
payments of €19.4 million and €15.6 million made in addition – as well as the additional
annual payments of around €19 million to be made in the future – will be returned if
the appeals issued by Deutsche Post AG or the federal government against the state aid
ruling are successful. A repayment would only affect the liquidity of Deutsche Post AG;
the earnings position would remain unaffected.

Financial opportunities

Being a global operator also opens up opportunities for Deutsche Post DHL. For the
specified period under review, these are mainly opportunities arising from fluctuating
exchange rates from scheduled or planned future foreign currency transactions.

Significant currency risks from planned transactions are quantified as a net posi-
tion over a rolling 24-month period. Highly correlated currencies are consolidated in
blocks. The identified risks are hedged up to an average of 50 % using derivatives over
a 24-month period. The most important planned net surpluses at the Group level are
in pound sterling, Japanese yen and Korean won, whilst the Czech crown is the only
currency with a considerable net deficit. By offsetting the net deficit in US dollars with
surpluses in other highly correlated currencies, the net risk in the “US dollar block” at the
Group level is nearly offset and thus not actively managed. The average hedging level for
the year 2014 was approximately 48 % as at the reporting date. A potential devaluation
of the euro presents an opportunity for the Group’s earnings position. Based on current
macroeconomic estimates, we consider this opportunity to be of low relevance. Further
information on the financial position and finance strategy of the Group as well as on
the management of financial risks is found in the report on the economic position and
in the Notes.

Risks, page 98 f.

Note 53

Note 50

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Risks

Group Management Report

Glossary, page 218

Risks

Risks arising from the political and regulatory environment

Risks associated with the general business environment primarily arise from the fact
that the Group provides some of its services in a regulated market. A large number of
postal services rendered by Deutsche Post AG and its subsidiaries are subject to sector-
specific regulation by the Bundesnetzagentur (German federal network agency), pursuant
to the Postgesetz (PostG – German Postal Act). The Bundesnetzagentur approves or
reviews prices, formulates the terms of downstream access and has special supervisory
powers to combat market abuse.

On 14 November 2013, the Bundesnetzagentur determined the conditions for regu-
lating mail prices requiring approval under the price-cap procedure from January 2014
to December 2018. According to the decision, the general rate of inflation less the pro-
ductivity growth rate stipulated by the regulatory authority (X-factor) in the amount of
0.2 % p.a. constitutes the key factor applicable to mail prices subject to approval. This
would necessitate price reductions if the inflation rate in the reference period is lower
than the productivity growth rate specified and permit price increases if the inflation
rate in the reference period is higher than the productivity growth rate specified. On
2 December 2013, the Bundesnetzagentur approved the higher prices to be charged in
2014 for the products regulated under the price-cap procedure; as a result, this no longer
represents a risk.

On 8 June 2013, the Bundesnetzagentur initiated market abuse proceedings against
Deutsche Post InHaus Services GmbH, citing discriminatory access conditions for sort-
ing and consolidation services following a complaint by one of the company’s competi-
tors. The party filing the complaint accused the company in particular of offering other
postal services providers better conditions for posting and collection than it itself had
been offered. Deutsche Post InHaus Services GmbH considers the accusations to be
unfounded. The case is still under consideration by the Bundesnetzagentur. Should that
agency determine – contrary to expectations – that market abuse has occurred, the
company would have to desist from the actions in question. Due to the ongoing abuse
proceedings, we are refraining from a risk assessment.

Risks arising from market and sector-specific conditions

Risks arising from market and sector-specific conditions are a key factor in deter-
mining the success of our business. For this reason we pay close attention to economic
trends in the individual regions. Despite the volatile economic climate, demand for
logistics services rose in 2013, as did the related revenues. We are nonetheless not able
to rule out the possibility of an economic downturn in specific regions and a stagnation
or decrease in transport quantities. However, this would not reduce demand for our
services in all business units. Indeed, the opposite effect could arise in the parcel busi-
ness, for example, as a result of an increase in online purchasing amongst consumers.
Companies might also be forced to outsource transport services in order to lower costs.
Cyclical risks can affect our divisions differently with respect to magnitude as well as
point in time, which mitigates the total effect. Therefore, we consider these risks to be
medium at best. Moreover, we have taken measures in recent years to make costs more
flexible and to be able to respond quickly to a change in market demand.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Risks

Deutsche Post and DHL are in competition with other providers. Such competition
can significantly impact our customer base as well as the levels of prices and margins
in our markets. In the mail and logistics business, the key factors for success are quality,
customer confidence and competitive prices. Thanks to our high quality along with
the cost savings we have generated in recent years, we believe that we shall be able to
withstand the competition and keep any negative effects at a low level.

Risks arising from information technology

The security of our information systems is particularly important to us. The goal
is to ensure continuous IT system operation and prevent unauthorised access to our
systems and databases. To fulfil this responsibility, the Information Security Committee,
a sub-committee of the IT Board, has defined standards, procedures and guidelines
based on ISO 27001, the international standard for information security management.
In addition, Group Risk Management, IT Audit, Data Protection and Corporate Security
monitor and assess IT risk on an ongoing basis. For our processes to run smoothly at all
times, the essential IT systems must be constantly available. We ensure this by designing
our systems to protect against complete system failures. In addition to third-party data
centres, we operate two central data centres in the Czech Republic and Malaysia. Our
systems are thus geographically separate and can be replicated locally.

We limit access to our systems and data. Employees can only access the data they
need to do their job. All systems and data are backed up on a regular basis and critical
data are replicated across data centres.

All of our software is updated regularly to address bugs, close potential gaps in
security and increase functionality. We employ a patch management process – a defined
procedure for managing software upgrades – to control risks that could arise from out-
dated software or from software upgrades.

Due to the measures described above, we estimate the probability of a significant
and momentous incident in the IT sector as being very unlikely so that the risk has an
overall low relevance.

Our E-POST products – first and foremost E-Postbrief – come with our pledge of
security and data protection. In 2013, the associated platform was re-certified by the
German Federal Office for Information Security in accordance with its standards for
IT-Grundschutz. In addition, it was again certified by TÜV Informationstechnik GmbH
as compliant with the legal standards and applicable data protection regulations pursu-
ant to the criteria for trusted site privacy.

Risks arising from internal processes

Logistics services are generally provided in bulk and require a complex opera-
tional infrastructure with high quality standards. To consistently guarantee reliability
and punctual delivery, processes must be organised so as to proceed smoothly with
no technical or personnel-related glitches. Any weaknesses with regard to posting and
collection, sorting, transport, warehousing or delivery could seriously compromise
our competitive position. We therefore adapt all processes to current circumstances as
needed. We also take preventive measures to guard against disruptions or malfunctions
in our operational processes. Should disruptions nonetheless occur, contingency plans
will come into effect to minimise the consequences. Some risks from business inter-
ruptions are also reduced by our insurance policies.

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Risks

Group Management Report

We furthermore use our First Choice methodology to continuously improve our
processes and align them even more closely to the requirements of customers. Should
this involve capital expenditure, the Board of Management decides on any sums in
excess of €25 million. Board of Management committees make decisions on investments
of more than €10 million, with a lower threshold of €5 million applying to Corporate
Center/Other. The Board of Management is regularly informed about investment
decisions so that they can identify any significant risk early on and take the necessary
countermeasures.

As a service provider, we do not conduct research and development in a narrower

sense. There are therefore no significant risks to report in this area.

As our operating business is organised decentrally and contingency plans are in
place no significant risk to the Group was reported with respect to business disruptions
arising from internal processes.

Risks arising from environmental management

Our Group-wide risk management also considers environmental developments.
At present, we are not aware of any environmental risks that could have a significant
impact on the Group.

Risks arising from human resources

It is the motivation and competence of our employees that make a good impression
on our customers and thus shape our long-term success. Demographic change and
increased competition for qualified specialists and executives mean that the pool of
potential young talent is becoming smaller, particularly in our core market of Germany.
The risk therefore exists that we may not be able to recruit and retain a sufficient number
of suitable employees. We plan to take various measures to decrease this risk. For
example, we place great importance on providing a motivational work environment
and suitable professional and employee development programmes.

In many countries, both age and social structures are undergoing a notable shift.
To adequately identify and counteract the resulting risk relating to employees’ work
capacity and ageing, we have developed an analysis and planning instrument known as
Strategic Workforce Management, which supplies strategically well-founded answers
based on fact. The Generations Pact entered into by Deutsche Post AG with the trade
unions is geared specifically towards demographic conditions in Germany. It ensures
that older employees can remain on the job whilst at the same time improving employ-
ment opportunities for young people.

According to estimates from the United Nations and the World Economic Forum,
there is a risk of chronic, i.e., non-contagious, disease increasing substantially all over
the world. We are responding to this risk with a health management programme, which
is subject to continual development.

Employees, page 76

Health and safety, page 78 f.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Risks

Financial risks

As a global operator, Deutsche Post DHL is inevitably exposed to financial risks.
These are mainly risks arising from fluctuating exchange rates, interest rates and com-
modity prices. Using operational and financial measures, we try to reduce the volatility
of financial figures due to financial risk.

Risks with respect to currencies may result from scheduled or planned future
foreign currency transactions. Significant currency risks from planned transactions are
quantified as a net position over a rolling 24-month period. Highly correlated currencies
are consolidated in blocks. The identified risks are hedged up to an average of 50 %
using derivatives over a 24-month period. The most important planned net surpluses at
the Group level are in pound sterling, Japanese yen and Korean won, whilst the Czech
crown is the only currency with a considerable net deficit. By offsetting the net deficit
in US dollars with surpluses in other highly correlated currencies, the net risk in the
“US dollar block” at the Group level is nearly offset and thus not actively managed. The
average hedging level for the year 2014 was approximately 48 % as at the reporting date.
The significant risk to the Group’s earnings position would be a general appreciation
of the euro. At present, we consider the individual risks arising from developments
with regard to the respective currencies of low relevance and those in the currency risk
category overall of medium relevance.

The key control parameters for liquidity management are the centrally available
liquidity reserves, which should not fall below €2 billion. Deutsche Post DHL had
central liquidity reserves of €4.6 billion as at the reporting date, consisting of central
financial investments amounting to €2.6 billion plus a syndicated credit line of €2 billion.
Therefore, the Group’s liquidity is sound in the short and medium term. Moreover, the
Group enjoys open access to the capital market on account of its good ratings within the
industry, and is well positioned to secure long-term capital requirements. The Group’s
net debt amounted to only €1.5 billion at the end of 2013. Given our existing interest
rate hedging instruments, the share of variable interest rate liabilities in non-current
financial liabilities in the amount of €4.6 billion is approximately 36 %. At present, we
consider liquidity and interest rate risks to be of low relevance.

As a logistics group, Deutsche Post DHL’s significant commodity price risks result
from changes in fuel prices (kerosene, diesel and marine diesel). In the DHL divisions,
most of these risks were passed on to customers via operating measures (fuel surcharges).
We only have noteworthy hedging instruments for the purchase of diesel in the MAIL
division. At present, we consider commodity price risks to be of low relevance.

Further information on the financial position and finance strategy of the Group
as well as on the management of financial risks is found in the report on the economic
position and in the Notes.

Note 50

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Risks

Group Management Report

Risks from pending legal proceedings

On 5 November 2012, the Bundeskartellamt (German federal cartel office) initiated
proceedings against Deutsche Post based on suspicion of abusive behaviour with respect
to agreements on mail transport with major customers. Based upon information
from Deutsche Post AG’s competitors and customer surveys, the authorities suspect
that the company had violated the provisions of German and European antitrust law.
Deutsche Post AG does not share this opinion. However, should the authorities find
their suspicions confirmed, they may require Deutsche Post AG to refrain from certain
acts or impose fines.

On 25 January 2012, the European Commission issued a ruling on the formal
investigation regarding state aid that it had initiated on 12 September 2007. In its review,
the European Commission determined that Deutsche Post AG was not overcompen-
sated for providing universal services between 1989 and 2007 using state resources. It
also did not find fault with the state guarantees for legacy liabilities. By contrast, in its
review of funding for civil servants’ pensions, the European Commission concluded
that illegal state aid had, in part, been received. It said that the pension relief granted
to Deutsche Post AG by the Bundesnetzagentur during the price approval process led
to Deutsche Post AG receiving a benefit, which it must repay to the Federal Republic of
Germany; in addition, it must also be ensured that no benefits are received in the future
which could be considered illegal state aid. The Commission furthermore stated that
the precise amount to be repaid was to be calculated by the Federal Republic. In a press
release, the European Commission had referred to an amount of between €500 mil-
lion and €1 billion. Deutsche Post AG is of the opinion that the Commission’s state aid
decision of 25 January 2012 cannot withstand legal review and has filed an appeal with
the European Court of Justice in Luxembourg. The Federal Republic of Germany has
similarly appealed the decision.

To implement the state aid ruling, the federal government called upon
Deutsche Post AG on 29 May 2012 to make a payment of €298 million, including interest.
Deutsche Post AG paid this amount to a trustee on 1 June 2012 and appealed the recovery
order to the Administrative Court. The appeal, however, has been suspended pending a
ruling from the European Court. The company made additional payments of €19.4 mil-
lion and €15.6 million to the trustee on 2 January 2013 and 2 January 2014, respectively.
The payments made were reported in the balance sheet under non-current assets; the
earnings position remained unaffected. The European Commission has not expressed
its final acceptance of the calculation of the state aid to be repaid. On 17 December, it
initiated proceedings against the Federal Republic of Germany with the European Court
of Justice to effect a higher repayment amount.

Although Deutsche Post AG and the federal government are of the opinion
that the state aid decision cannot withstand legal review, it cannot be ruled out that
Deutsche Post AG will ultimately be required to make a potentially higher payment,
which could have an adverse effect on earnings.

More information about the state aid investigation and other legal proceedings is

Note 53

provided in the Notes.

Deutsche Post DHL 2013 Annual Report

Group Management Report

Opportunities and Risks
Risks

Since 1 July 2010, as a result of the revision of the relevant tax exemption provisions,
the VAT exemption has only applied to those specific universal services in Germany
that are not subject to individually negotiated agreements or provided on special terms
(discounts etc.). Deutsche Post AG does not believe that the legislative amendment fully
complies with the applicable provisions of European Community law. Due to the legal
uncertainty resulting from the new legislation, Deutsche Post AG is endeavouring to
clarify certain key issues with the tax authorities. Although Deutsche Post AG is imple-
menting the required measures to a large extent, the differing legal opinions on the part
of Deutsche Post AG and the tax authorities will be judicially clarified.

In light of the announced legal proceedings, we have not undertaken a risk classi-

fication.

Risks arising from corporate strategy

Over the past years, the Group has ensured that its business activities are well pos-
itioned in the world’s fastest growing regions and markets. We have also created efficient
structures in all areas to enable us to flexibly adapt capacities and costs to demand – a
prerequisite for lasting, profitable business success. With respect to strategic orientation,
we are focusing on our core competencies in the mail and logistics businesses with an
eye towards growing organically and simplifying our processes for the benefit of our
customers. In the specified period under consideration, risks arising from the current
corporate strategy, which extends over a long-term period, are considered to have a low
relevance for the Group. In addition, the divisions face the following special situations:
In the MAIL division, we are responding to the challenges presented by the structural
change from a physical to a digital business. We are counteracting the risk arising from
changing demand by expanding our range of services. Due to the e-commerce boom,
we expect our parcel business to continue growing robustly in the coming years and are
therefore extending our parcel network. We are also expanding our range of electronic
communications services, securing our standing as the quality leader and, where pos-
sible, making our transport and delivery costs more flexible. We follow developments
in the market very closely and take these into account in our earnings projections. For
the specified forecast period, we do not see these developments as having any significant
potential to sustain a negative impact.

In the EXPRESS division, our future success depends above all on general factors
such as trends in the competitive environment, costs and quantities transported. After
having spent recent years successfully restructuring our business and substantially
improving cost structures, we are focusing on fostering growth in our international
business. We expect an increase in shipment volumes. Based on this assumption, we are
investing in our network, our services, our employees and the DHL brand. Against the
backdrop of the past trend and the overall outlook, we do not see any significant strategic
risk for the EXPRESS division beyond that reported in the section entitled “Risks arising
from market and sector-specific conditions”.

Deutsche Post DHL 2013 Annual Report

Opportunities and Risks
Risks

Group Management Report

In the GLOBAL FORWARDING, FREIGHT division we purchase transport services
from airlines, shipping companies and freight carriers rather than providing them our-
selves. As a result, in a worst-case scenario there is a risk that we shall not be able to
pass on all price increases to our customers. The extent of the risk essentially depends
on trends in the supply, demand and price of transport services as well as the duration
of our contracts. Comprehensive knowledge in the area of brokering transport services
helps us to minimise this risk, which is therefore considered to have a low relevance.

Our SUPPLY CHAIN division provides customers in a variety of industries with
solutions along the entire logistics chain. Our success is highly dependent on our
custom ers’ business trends. Since we offer customers a widely diversified range of
products in different sectors all over the world, we can diversify our risk portfolio and
thus counter act the incumbent risks. Moreover, our future success also depends on our
ability to continuously improve our existing business and to grow in our most important
markets and customer segments.

We do not see any significant strategic risk for the SUPPLY CHAIN division beyond
that reported in the section entitled “Risks arising from market and sector-specific
conditions”.

100

Deutsche Post DHL 2013 Annual Report

Group Management Report

Expected Developments
Overall Board of Management assessment of the future economic position
Forecast period
Future organisation
Future economic parameters

EXPECTED DEVELOPMENTS

Overall Board of Management assessment
of the future economic position

Our strong position as market leader in the German mail and parcel business and
in nearly all of our logistics activities is the best possible basis for further growth. The
Board of Management expects consolidated EBIT to reach between €2.9 billion and
€3.1 billion in financial year 2014 and world economic growth to be slightly above the
previous year at best. A similar development is expected for world trade. The MAIL
division is likely to contribute around €1.2 billion to consolidated EBIT. Compared with
the previous year, we expect an additional improvement in overall earnings to between
€2.1 billion and €2.3 billion in the DHL divisions. The Corporate Center / Other result
should be better than €–0.4 billion. We expect to see a further positive development in
EBIT after asset charge and operating cash flow, in line with the EBIT trend.

Forecast period

Outlook generally refers to 2014

The information contained in the report on expected developments generally refers
to financial year 2014. However, in some instances we have chosen to extend the scope.

Future organisation

Parts of parcel business outside Germany consolidated in mail business

Our domestic parcel business in Poland, the Czech Republic, Belgium and the
Nether lands was consolidated in the MAIL division, effective 1 January 2014. This busi-
ness was previously part of the EXPRESS and GLOBAL FORWARDING, FREIGHT divisions.

Future economic parameters

Growth of global economy accelerates

Supported by the continuation of expansive monetary policies, the global economy
began growing at an accelerated pace at the start of 2014, with the weak economic
trend appearing to have bottomed out in many industrial countries. In addition, fiscal
consolidation pressure has abated. The emerging economies with strong export sectors
are expected to benefit from the upturn in the industrial countries. These countries are
likely to continue to achieve significantly higher growth rates. Risks to global growth
could emanate from the financial markets if the markets go ahead and price in interest
rate hikes by central banks before the fact. A renewed sovereign debt crisis in the euro
zone would also slow down growth substantially. On the other hand, global growth
could develop stronger momentum than is currently anticipated.

Deutsche Post DHL 2013 Annual Report

101

Expected Developments
Future economic parameters

Group Management Report

a.82 Global economy: growth forecast

World trade volumes

Real gross domestic product

World

Industrial countries

Emerging markets

Central and Eastern Europe

CIS countries

Emerging markets in Asia

Middle East and North Africa

Latin America and the Caribbean

Sub-Saharan Africa

2013

2.7

2014

4.5

3.0

1.3

4.7

2.5

2.1

6.5

2.4

2.6

5.1

3.7

2.2

5.1

2.8

2.6

6.7

3.3

3.0

6.1

Source: International Monetary Fund (IMF) World Economic Outlook, January 2014 update. Growth rates
calculated on the basis of purchasing power parity.

The Chinese export economy is expected to benefit from rising global demand. In
addition, the Chinese government has adopted a number of reforms aimed at accel-
erating growth. However, investments could be hurt by overcapacities. Forecasts for
GDP growth are therefore mixed (IMF: 7.5 %, OECD: 8.2 %; Global Insight: 8.0 %). In
Japan, export activity is expected to pick up significantly in 2014. A continued revival
in domestic demand is also anticipated. However, the pending substantial increase in
value added tax is likely to put the brakes on private consumption temporarily. For that
reason, GDP will presumably grow at the same rate as in the previous year (IMF: 1.7 %,
OECD: 1.5 %; Global Insight: 1.8 %).

The United States is likely to experience a significant improvement in the situation
on the labour market, which would benefit private consumption. The major drivers of
this development are again expected to be construction spending and corporate invest-
ment. Foreign trade is also expected to revive. GDP growth will presumably accelerate
noticeably overall (IMF: 2.8 %, OECD: 2.9 %; Global Insight: 2.5 %).

In the euro zone, the economy is forecast to continue its gradual recovery, with
the improvement in the economic climate benefiting exports. Private households are
expected to obtain relief from tax increases, which should act to drive private con-
sumption. Companies are also likely to increase their capital expenditure again. On the
whole, however, GDP growth is expected to be moderate (IMF: 1.0 %, ECB: 1.1 %; Global
Insight: 0.8 %).

Early indicators suggest that the upturn in Germany will continue. Exports are
increasing, and companies are upping their capital expenditure. This could lead to an
increase in investments in machinery and equipment as well as construction spending
along with a rise in the number of employed persons and a corresponding decrease in
the unemployment rate. This would lay the foundation for rising incomes and – assum-
ing the inflation rate remains very low – an increase in private consumption. GDP is
therefore likely to see significant growth (IMF: 1.6 %, Sachverständigenrat: 1.6 %; Global
Insight: 1.8 %).

Given a balanced ratio of supply to demand, the price of crude oil should remain

stable for the most part in 2014.

102

Deutsche Post DHL 2013 Annual Report

Group Management Report

Expected Developments
Future economic parameters

The US Federal Reserve is expected to gradually reduce its purchases of government
bonds. It is not anticipated that the Fed will raise its key interest rate. The ECB is also
likely to leave its key interest rate at the current level. However, capital market interest
rates could nonetheless rise moderately due to increasing economic momentum and
reduced bond purchases by the US Federal Reserve.

World trade grows, thanks especially to Asia

The emerging markets in Asia are expected to play a significant role in the growth of
global trade again in 2014. At 3 %, growth in global trade volumes (transported quantity
in tonnes) is forecast to be stronger overall in 2014 compared with 2013, due to the slight
improvement in the economic climate in the industrial countries.

Mail business in the digital age

We expect the market for paper-based mail communication to shrink, although
demand for communication in general will continue to rise. By introducing our E-Post-
brief product, we have begun to use our expertise in physical communication to offer
competent electronic communications and generate new business in the process. We
have also prepared ourselves for continued, intense competition. At the beginning of
2014, we increased the postage for a standard domestic letter in accordance with the
price-cap procedure. The higher prices reflect the general price trend.

According to forecasts by the Zentralverband der deutschen Werbewirtschaft ( German
advertising federation), the cyclical German advertising market will, for the most part,
continue to remain stable in 2014. Advertising expenditures are increasingly being
shifted from traditional to digital media. The trend towards targeted advertising and
combinations with internet offers is likely to continue. Moreover, we expect companies
to resort increasingly to cheaper forms of advertising. We intend to consolidate our
position in the liberalised market for paper-based advertising and to expand our share
in the advertising market as a whole by integrating online marketing.

The press services market is likely to continue contracting slightly because of the
increasing use of digital media. This will affect subscription numbers and average
weights of printed publications, thus also impacting our revenue. In future, we also
plan to increase the number of digital products we offer.

The international mail market again benefited from the growing e-commerce sector.
This is an area in which we aim to tap into new business related to our core competency:
mail, parcels and small packages.

The parcel market will continue to grow both in Germany and internationally. We
shall continue to drive this development and expand both our domestic and inter-
national market position with our own portals and shipping and delivery services.

International express business continues to grow

Experience shows that growth in the international express market is highly depend-
ent on the economy. In light of the volume trend, we are optimistic that the express
market will remain stable in 2014.

By using programmes to increase profitability and quality, we shall continue to
improve our result. We are confident that we shall remain on course for growth and
defend or even further strengthen our leading market position. Our global DHL brand
campaign will also contribute to this.

Glossary, page 218

Brands, page 86

Deutsche Post DHL 2013 Annual Report

103

Expected Developments
Future economic parameters
Revenue and earnings forecast

Group Management Report

Moderate market growth expected in the freight forwarding business

After the decline in output in some industry sectors led to weaker growth in freight
volumes overall in 2013, forecasts now indicate that the situation in the air freight market
could improve slightly in 2014.

Ocean freight capacities are expected to increase further because new vessels are
being put into operation. At the same time, demand is likely to remain stable or rise
slightly.

As in the reporting year, we expect European road transport volumes to grow
slightly at best or even stagnate in 2014, which reflects the unaltered moderate economic
forecasts for the region.

Supply Chain market remains robust

The trend towards outsourcing warehouse and distribution services continues. For
this reason, projections indicate that the market for contract logistics will continue
to experience stable growth of more than 5 %. Many companies prefer to outsource
their logistics, especially in periods of economic weakness with high cost pressure and
increasingly complex supply chains. Demand for supply chain services is expected to
see particularly strong growth in emerging markets such as China, India, Brazil and
Mexico, where we benefit from a strong market position.

The market for marketing solutions and business process outsourcing is also likely
to grow further. We anticipate strong growth for the Williams Lea business unit on the
basis of both our strong service portfolio and the further development of our broad
DHL customer base.

Although the economic climate remains uncertain, we are ensuring by means of
our Growth Through Excellence strategy that we continue to take advantage of our
strengths – extensive reach and mature sector expertise – to profitably grow both new
and existing business.

Revenue and earnings forecast

In light of the fact that the world economy again saw below average growth in the
reporting year, we expect slight economic expansion at best in 2014. The global trading
volumes relevant to our business are expected to perform similarly. We are therefore
anticipating a corresponding revenue trend, with increasing revenue, particularly in
the DHL divisions.

Against this backdrop, we expect consolidated EBIT to reach between €2.9 billion
and €3.1 billion in financial year 2014. The MAIL division is likely to contribute around
€1.2 billion to this. Compared with the previous year, we expect an additional improve-
ment in overall earnings to between €2.1 billion and €2.3 billion in the DHL divisions.
The Corporate Center / Other result should be better than €–0.4 billion.

In line with our Group strategy, we are targeting organic growth and anticipate only

a few small acquisitions in 2014, as in the previous year.

We still intend to achieve the goals we set for the year 2015. Due to the allocation
of parts of the parcel business outside Germany to the MAIL division that took effect
on 1 January 2014, we are adjusting the anticipated earnings contributions for the year
2015 as follows. In the MAIL division, we now expect at least €1.1 billion rather than the
previous estimate of at least €1 billion. Accordingly, we now anticipate the DHL divisions
to make a contribution to earnings of between €2.6 billion and €2.8 billion.

104

Deutsche Post DHL 2013 Annual Report

Group Management Report

Expected Developments
Revenue and earnings forecast
Expected financial position

Our finance strategy calls for a payout of 40 % to 60 % of net profits as dividends as
a general rule. At the Annual General Meeting on 27 May 2014, we intend to propose
to the shareholders that a dividend per share of €0.80 be paid for financial year 2013
(previous year: €0.70).

Expected financial position

Creditworthiness of the Group at least adequate

In light of the earnings forecast for 2014, we expect the “FFO to debt” performance
metric to remain on the whole stable and the rating agencies to rank our creditworthi-
ness as adequate or even better.

Liquidity to remain solid

We anticipate a deterioration in our liquidity in the first half of 2014 as a result of
the annual prepayment due to Bundes-Pensions-Service für Post und Telekommunika-
tion and repayment of a bond that matured in January as well as the dividend payment
for financial year 2013 in May 2014. However, our operating liquidity situation will
improve again significantly towards the end of the year due to the upturn in business
that is normal in the second half. We are not currently planning any capital market
transactions for 2014.

Investments of around €1.9 billion expected

In 2014, we plan to increase capital expenditure to around €1.9 billion. Our focus

will remain on IT, machinery and transport equipment.

In the MAIL division, the continued expansion of our parcel network shall remain
a top priority. Furthermore, we shall expand additional delivery options, such as Pack-
station, Paketbox and parcel boxes. Total capital expenditure in 2014 will exceed the
reporting year, primarily because we intend to increase expansion of our mechanised
delivery bases and investment in new parcel centres.

In the EXPRESS division, capital expenditure is expected to be above that of the
previous year. We intend to expand existing resources and to invest in both mobile and
stationary infrastructure.

In the GLOBAL FORWARDING, FREIGHT division, we envisage slightly lower invest-
ments for 2014, although we shall further expand our IT, in particular for the New
Forwarding Environment project.

In the SUPPLY CHAIN division, capital expenditure in 2014 is expected to be slightly
above that of the reporting year. Investments will continue to focus on supporting new
business projects and growth in our existing business.

Cross-divisional capital expenditure in 2014 is expected to remain well below
the high level of the previous year; investments shall again be centred on our vehicle
fleet and IT.

Objectives and strategies, page 34

Deutsche Post DHL 2013 Annual Report

105

Expected Developments
Development of further indicators relevant for internal management

Group Management Report

Development of further indicators relevant
for internal management

eaC and operating cash flow demonstrate positive trend

With regard to the EBIT after asset charge financial performance metric and operat-
ing cash flow, we expect to see a further positive development in financial year 2014 in
line with the respective EBIT trend. Here, the continuing rise in business volume may
result in an increase in working capital within the individual divisions.

Employee opinion survey results again positive

We intend to keep up the positive results that our employee opinion survey achieved
in the reporting year. For 2014, we expect to see a slight increase to 71 % in the approval
rating for the key performance indicator “Active Leadership”.

Transparent presentation of greenhouse gas efficiency

We intend to increase transparency in our greenhouse gas efficiency because it is the
target of our GoGreen environmental protection programme. It will be measured using
a CO2 Efficiency Index (CEX), which is based on division and business unit-specific
emission intensity figures that show the ratio of the respective emissions to a match-
ing performance indicator. In future, we shall report on this performance metric on a
regu lar basis as an additional non-financial indicator relevant for internal management.

This Annual Report contains forward-looking statements that relate to the business, financial performance and results of oper-
ations of Deutsche Post AG. Forward-looking statements are not historical facts and may be identified by words such as “believes”,
“ expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets” and similar expressions.
As these statements are based on current plans, estimates and projections, they are subject to risks and uncertainties that could
cause actual results to be materially different from the future development, performance or results expressly or implicitly assumed
in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which
apply only as at the date of this presentation. Deutsche Post AG does not intend or assume any obligation to update these
forward-looking statements to reflect events or circumstances after the date of this Annual Report.
Any internet sites referred to in the Group Management Report do not form part of the report.

106

Deutsche Post DHL 2013 Annual Report

CORPORATE
GOVERNANCE

107 – 132

b Corporate GovernanCeCORPORATE GOVERNANCEb

109 REPORT OF THE SUPERVISORY BOARD

113 SUPERVISORY BOARD
113 Members of the Supervisory Board
113

Committees of the Supervisory Board

114 BOARD OF MANAGEMENT

116 MANDATES
116 Mandates held by the Board of Management
116 Mandates held by the Supervisory Board

117 CORPORATE GOVERNANCE REPORT
123

Remuneration report

Corporate Governance

Report of the Supervisory Board

REPORT OF THE SUPERVISORY BOARD

WULF VON SCHIMMELMANN
Chairman

DEAR SHAREHOLDERS,

In the 2013 financial year, Deutsche Post DHL performed well in what continued to be a challenging

economic environment in its capacity as provider, investment and employer of choice in its market.

Advising and overseeing the Board of Management

In 2013, the Supervisory Board scrutinised Group and divisional strategy and results in light of the
global economic situation at five Supervisory Board meetings and one closed meeting. To this end, the
Board of Management provided the Supervisory Board with detailed up-to-date information on the situ-
ation and performance of the Group, strategic initiatives and key business transactions, the development
of acquisitions, compliance management, as well as risk exposure and risk management, and issues related
to planning and implementation. Between meetings, the Chairman of the Supervisory Board was also
kept abreast of ongoing developments.

Measures requiring the consent of the Supervisory Board were discussed in even greater depth, and
in advance by the relevant committees. The results of the deliberations were presented by the respective
committee chairs in the plenary meetings.

Deutsche Post DHL 2013 Annual Report

109

Report of the Supervisory Board

Corporate Governance

Five meetings during the reporting year

Three Supervisory Board meetings took place during the first half of the year and two in the second.

All members participated in at least 50 % of the meetings. The overall participation rate exceeded 90 %.

At the financial statements meeting on 4 March 2013, with the auditors in attendance, the annual
and consolidated financial statements and the management reports for 2012 were discussed in detail and
approved. After a thorough review, we endorsed the Board of Management’s proposal for the appropri-
ation of the unappropriated surplus for the 2012 financial year. At this meeting, the Board of Manage-
ment’s achievement of its targets for the 2012 financial year was also assessed and the Supervisory Board’s
proposed resolutions for the Annual General Meeting (AGM) were adopted. In addition, we discussed
the outcome of the review on the efficiency of the Supervisory Board’s work. The Supervisory Board also
looked in detail at EXPRESS aviation strategy at this meeting.

As a number of members of the Supervisory Board had previously been re-elected, an extraordinary
meeting of the Supervisory Board was held immediately after the Deutsche Post AG AGM on 29 May
2013, where the members of the Supervisory Board re-elected Andrea Kocsis as deputy chair and me as
chairman of the Supervisory Board. The meeting also confirmed the positions of all committee members.
Details of the current members of the Supervisory Board committees are shown on page 113.

At the meeting of the Supervisory Board on 27 June 2013, we discussed measures aimed at optimising
Deutsche Post AG’s investment portfolio. Matters relating to the Board of Management were also dealt with
at this meeting, in particular the remuneration of its members and the extension of Roger Crook’s appoint-
ment to the Board and of his contract for a further five years. We also considered the New Forwarding
Environment (NFE) strategic project within the Global Forwarding business unit in great detail. Under
the new IT-based operating model, Global Forwarding will become a single, internationally homogeneous
organisation, with a clear customer focus, efficient processes and high standards of quality.

On 24 September 2013, Directors’ Day, selected speakers were invited to provide basic and further
training to the members of the Supervisory Board. At the meeting of the Supervisory Board that followed,
changes in the regulatory environment were the main focus of discussions. The Supervisory Board also
discussed the Group’s external image in the market, with the help of external guest speakers, specialising in
the fields of customers, investors, media and the labour market. On 25 September 2013, the current status
of Strategy 2015 implementation within the Group and the divisions was the main point on the agenda.
The Supervisory Board’s final meeting of 2013 was held on 13 December. Following extensive discus-
sions, we adopted the 2014 business plan and also considered various aspects of the Board of Manage-
ment’s remuneration. Furthermore, the Board of Management’s targets for 2014 were set and the formation
of a Strategy Committee agreed upon. Following in-depth discussions, we again submitted an unqualified
Declaration of Conformity with the German Corporate Governance Code.

Hard work by the committees

The Executive Committee met four times during the year under review. Meeting agendas focused
primarily on matters relating to the Board of Management and preparations for the respective Supervisory
Board meetings.

The Personnel Committee also met four times and considered the reorganisation of the Human
Resources board department, diversity management and activities in the areas of training, health and
employee commitment. The committee received ongoing updates regarding the progress of the One HR
programme, which is reorganising the content and structure of the Group’s personnel activities. It also
considered the remuneration structure for executives. The annual employee opinion survey was also
discussed.

110

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Report of the Supervisory Board

The Finance and Audit Committee met seven times. Its chairman, Hero Brahms, and Stefan Schulte
are financial experts as defined by sections 100 (5) and 107 (4) of the Aktiengesetz (AktG – German
Stock Corporation Act). At its meeting in February, the committee examined the annual and consoli-
dated financial statements for 2012 and recommended that these be approved by a plenary meeting of
the Supervisory Board. The auditors took part in this meeting and gave a detailed presentation on their
findings regarding the key audit priorities set by the committee for 2012, along with recommendations
arising from their findings. Following the AGM, the Finance and Audit Committee engaged the auditors
to perform an audit of the 2013 annual and consolidated financial statements and the interim financial
report for the first half of the year. The committee also defined the key audit priorities. In advance of their
publication, the reviewed quarterly financial reports and the interim financial report for the first half of
the year were discussed by the committee together with the Board of Management and the auditors. The
main risk factors for the Group were also discussed at the February meeting as planned.

At its meeting on 20 June 2013, the Finance and Audit Committee considered the planned acquisition
of companies and holdings aimed at optimising Deutsche Post AG’s investment portfolio. The committee
received ongoing updates about other acquisitions and disposals throughout the year. The committee’s
deliberations included the acquisition of optivo GmbH, a leading German provider of e-mail marketing
services. The results of internal audits were also discussed by the committee.

At its meeting on 13 September 2013, the Finance and Audit Committee received a detailed progress
report on compliance organisation and compliance management from the Chief Compliance Officer. The
main risk factors for the Group were also discussed further.

On 4 December 2013, the Finance and Audit Committee considered the Group’s investment strategy
for pension assets as well as equity transactions. It also examined the business plan for 2014 and approved
both the 2014 internal audit plan and the sale of property in Hamburg. The committee regularly discussed
the Group’s business development and the internal control and risk management system. The appropriate-
ness of the Group’s accounting system was discussed with the auditors by the committee.

The Strategy Committee that was set up in December 2013 will meet for the first time in 2014.
The Nomination Committee met on one occasion in 2013 to consider nominations for the 2014 AGM.
The chairs of the committees reported on the committees’ deliberations in the subsequent plenary

meetings.

In 2013 there were no meetings of the Mediation Committee, formed pursuant to section 27 (3) of

the Mitbestimmungsgesetz (MitbestG – German Co-determination Act).

No changes to the composition of the Supervisory Board and Board of Management

There were no changes to the members of the Board of Management or the Supervisory Board during
2013. At the Deutsche Post AG AGM on 29 May 2013, I was re-elected as a shareholder representative on
the Supervisory Board. The end of the AGM also marked the start of a new term of office for the Super-
visory Board’s employee representatives who were re-elected in April 2013 by the Delegate Assembly, in
accordance with the MitbestG. At its extraordinary meeting immediately after the AGM, the Supervisory
Board re-elected Andrea Kocsis as deputy chair and I was re-elected as chairman of the Supervisory Board.
The meeting also confirmed the positions of all committee members. Details of the current members of
the Supervisory Board committees are shown on page 113.

Deutsche Post DHL 2013 Annual Report

111

Report of the Supervisory Board

Corporate Governance

Managing conflicts of interest

No conflicts of interest arose during the reporting year.

Company in compliance with all recommendations of the German Corporate Governance Code

In December 2013, the Board of Management and the Supervisory Board submitted an unquali-
fied Declaration of Conformity pursuant to section 161 of the AktG and published it on the company’s
website. The declarations from previous years can also be viewed on this website. In the 2013 financial
year, Deutsche Post AG complied with all the recommendations of the Government Commission on the
German Corporate Governance Code, as amended on 15 May 2012, and also intends to comply with the
recommendations of the code as amended on 13 May 2013. The Corporate Governance Report (page 117 ff.)
contains further information on corporate governance within the company and the remuneration report.

Annual and Consolidated Financial Statements audited

The auditors appointed by the AGM, PricewaterhouseCoopers Aktiengesellschaft Wirtschafts-
prüfungs gesellschaft (PwC), Düsseldorf, audited the annual and consolidated financial statements for the
2013 financial year, including the respective management reports, and issued unqualified audit opinions.
PwC also conducted the review of the quarterly financial reports and the interim report for the first half
of the year.

Following a detailed preliminary assessment by the Finance and Audit Committee, the Supervisory
Board reviewed the annual and consolidated financial statements and the management reports for the
2013 financial year at the financial statements meeting held on 11 March 2014. The review included
the Board of Management’s proposal for the appropriation of the unappropriated surplus. The auditors’
reports were made available to all Supervisory Board members and were discussed in detail with the Board
of Management and the auditors in attendance. The Supervisory Board concurred with the results of the
audit and approved the annual and consolidated financial statements for the 2013 financial year. Based on
the final outcome of the examination of the annual and consolidated financial statements, of the manage-
ment reports and of the proposal for the appropriation of the unappropriated surplus by the Supervisory
Board and the Finance and Audit Committee, there are no objections to be raised. The Supervisory Board
endorses the Board of Management’s proposal for the appropriation of the unappropriated surplus and
the payment of a dividend of €0.80 per share.

We would like to thank the Board of Management and all employees for their great commitment
and ongoing effort to safeguarding the company’s continued success. The Supervisory Board is confident
that the Group is well on the way to ensuring that it remains profitable in the long term, building on its
strong position in the market.

Bonn, 11 March 2014
The Supervisory Board

Wulf von Schimmelmann
Chairman

112

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Supervisory Board

SUPERVISORY BOARD

B.01 Members of the Supervisory Board

B.02 Committees of the Supervisory Board

Shareholder representatives

Employee representatives

Executive Committee

Prof. Dr Wulf von Schimmelmann (Chair)
Former CEO of Deutsche Postbank AG

Hero Brahms
Management consultant

Werner Gatzer
State Secretary, Federal Ministry of Finance

Prof. Dr Henning Kagermann
Former CEO of SAP AG

Thomas Kunz
CEO of Danone Dairy, member of the
Executive Committee of Danone S. A.,
France

Roland Oetker
Managing Partner, ROI Verwaltungs-
gesellschaft mbH

Dr Ulrich Schröder
CEO of KfW Bankengruppe

Dr Stefan Schulte
Chair of the Executive Board of Fraport AG

Elmar Toime
Managing Director, E Toime Consulting Ltd.

Prof. Dr-Ing. Katja Windt
Bernd Rogge Chair of Global Production
Logistics

President and Provost / Vice President
of Jacobs University Bremen gGmbH

Andrea Kocsis (Deputy Chair)
Deputy Chair of ver.di National Executive
Board and Head of Postal Services,
Forwarding Companies and Logistics
on the ver.di National Executive Board

Rolf Bauermeister
Head of Postal Services, Co-determination
and Youth and Head of National Postal
Services Group at ver.di national adminis-
tration

Heinrich Josef Busch
Chair of the Group and Company Executive
Representation Committee, Deutsche Post AG

Thomas Koczelnik
Chair of the Group Works Council,
Deutsche Post AG

Anke Kufalt
Member of the Works Council, DHL Global
Forwarding GmbH, Hamburg

Andreas Schädler
Chair of the General Works Council,
Deutsche Post AG

Sabine Schielmann
Member of the Executive Board of the
General Works Council, Deutsche Post AG

Stephan Teuscher
Section Head of politics referring to tariffs,
civil servants and social matters in the
department Postal Services, Forwarding
Companies and Logistics at ver.di national
administration

Helga Thiel
Deputy Chair of the General Works Council,
Deutsche Post AG

Stefanie Weckesser
Deputy Chair of the Works Council,
Deutsche Post AG, MAIL Branch, Augsburg

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Rolf Bauermeister

Werner Gatzer

Roland Oetker

Stefanie Weckesser

Finance and Audit Committee

Hero Brahms (Chair)

Stephan Teuscher (Deputy Chair)

Werner Gatzer

Thomas Koczelnik

Dr Stefan Schulte

Helga Thiel

Personnel Committee

Andrea Kocsis (Chair)

Prof. Dr Wulf von Schimmelmann
(Deputy Chair)

Thomas Koczelnik

Roland Oetker

Mediation Committee
(pursuant to section 27 (3) of the German
Co-determination Act)

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Rolf Bauermeister

Roland Oetker

Nomination Committee

Prof. Dr Wulf von Schimmelmann (Chair)

Werner Gatzer

Roland Oetker

Strategy Committee
(since 13 December 2013)

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Rolf Bauermeister

Prof. Dr Henning Kagermann

Thomas Koczelnik

Dr Ulrich Schröder

Deutsche Post DHL 2013 Annual Report

113

Board of Management
Board of Management

Corporate Governance
Corporate Governance

BOARD OF MANAGEMENT

KEN ALLEN
EXPRESS

Born in 1955
Member since February 2009
Appointed until February 2017

BRUCE EDWARDS
SUPPLY CHAIN

Born in 1955
Member since March 2008
Appointed until March 2016

ROGER CROOK
GLOBAL FORWARDING,
FREIGHT

Born in 1957
Member since March 2011
Appointed until March 2019

ANGELA TITZRATH
HUMAN RESOURCES

Born in 1966
Member since May 2012
Appointed until April 2015

114114

Corporate Governance
Corporate Governance

Board of Management
Board of Management

DR FRANK APPEL
CHIEF EXECUTIVE OFFICER

Born in 1961
Member since November 2002,
CEO since February 2008
Appointed until October 2017

LAWRENCE ROSEN
FINANCE,
GLOBAL BUSINESS SERVICES

Born in 1957
Member since September 2009
Appointed until August 2017

JÜRGEN GERDES
MAIL

Born in 1964
Member since July 2007
Appointed until June 2015

115115

Mandates

Corporate Governance

MANDATES

B.03 Mandates held by the Board of Management

Membership of supervisory boards
required by law

Membership of
comparable bodies

Lawrence Rosen
Deutsche Postbank AG

Ken Allen
DHL-Sinotrans International Air Courier Ltd 1,
China (Board of Directors)

Roger Crook
DHL Global Forwarding Management
(Asia Pacific) Pte Ltd 1, Singapore
(Board of Directors)

Bruce Edwards
Ashtead plc, UK (Board of Directors)

Greif, Inc., USA (Board of Directors)

Williams Lea Group Limited 1, UK
(Board of Directors)

Williams Lea Holdings PLC 1, UK
(Board of Directors, Chair)

Lawrence Rosen
Qiagen N. V. (Supervisory Board)
(since 26 June 2013)

1 Group mandate.

B.04 Mandates held by the Supervisory Board

Shareholder representatives

Employee representatives

Membership of supervisory boards
required by law

Membership of
comparable bodies

Membership of supervisory boards
required by law

Prof. Dr Wulf von Schimmelmann (Chair)
Allianz Deutschland AG

Prof. Dr Wulf von Schimmelmann (Chair)
Accenture Corp., Ireland (Board of Directors)

Rolf Bauermeister
Deutsche Postbank AG

Andreas Schädler
PSD Bank Köln eG (Chair)

Stephan Teuscher
DHL Hub Leipzig GmbH
(Supervisory Board, Deputy Chair)

Helga Thiel
PSD Bank Köln eG (Deputy Chair)

Thomson Reuters Corp., Canada
(Board of Directors)

Western Union Company, USA
(Board of Directors)

Hero Brahms
Zumtobel AG, Austria
(Supervisory Board, Deputy Chair)

Prof. Dr Henning Kagermann
Nokia Corporation, Finland
(Board of Directors)

Wipro Ltd., India (Board of Directors)

Roland Oetker
Rheinisch-Bergische Verlagsgesellschaft
mbH (Supervisory Board)

Dr Ulrich Schröder
“Marguerite 2020”: European Fund for
Energy, Climate Change and Infrastructure
(Supervisory Board)

Elmar Toime
Blackbay Ltd., United Kingdom
(Non-Executive Director) (until 5 July 2013)

Postea Inc., USA (Non-Executive Chairman)

Maxingvest AG

Hero Brahms
Georgsmarienhütte Holding GmbH
(Deputy Chair)

Krauss-Maffei-Wegmann GmbH & Co. KG

Live Holding AG (Chair)
(until 15 January 2014)

Telefunken SE (until 31 December 2013)

Werner Gatzer
Bundesdruckerei GmbH

Flughafen Berlin-Schönefeld GmbH

Prof. Dr Henning Kagermann
BMW AG

Deutsche Bank AG

Franz Haniel & Cie. GmbH

Münchener Rückversicherungs-
Gesellschaft AG

Roland Oetker
Evotec AG

Dr Ulrich Schröder
DEG – Deutsche Investitions- und
Entwicklungsgesellschaft mbH

Deutsche Telekom AG

Elmar Toime
message AG (Chair)
(until 13 September 2013)

Prof. Dr-Ing. Katja Windt
Fraport AG

116

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report

CORPORATE GOVERNANCE REPORT

Annual Corporate Governance Statement pursuant to section 289 a
of the Handelsgesetzbuch (HGB – German Commercial Code)

In this Annual Corporate Governance Statement, the company presents the main com-
ponents of Deutsche Post DHL’s corporate governance structure. These include the
Declaration of Conformity from the Board of Management and the Supervisory Board,
significant corporate governance practices that exceed legal requirements, the working
methods of the Board of Management and the Supervisory Board, and the composition
and working methods of the executive and other committees, as well as the targets for
the composition of the Supervisory Board.

Company in compliance with all recommendations of the German Corporate
Governance Code

In December 2013, the Board of Management and the Supervisory Board again
submitted an unqualified Declaration of Conformity pursuant to section 161 of the
Aktiengesetz (AktG – German Stock Corporation Act), which reads as follows:

“The Board of Management and the Supervisory Board of Deutsche Post AG declare
that the recommendations of the Government Commission German Corporate
Governance Code in the version dated 15 May 2012 have been complied with since
issuance of the Declaration of Conformity in December 2012 and that it is intended
to comply with all recommendations of the code in the version dated 13 May 2013 in
the future.”

We shall also implement the suggestions made by the code, with one exception:
the Annual General Meeting will only be broadcast on the internet up to the end of the
address by the Chief Executive Officer.

Specific corporate governance practices

With the guiding principle of “respect and results”, we set our corporate governance
the daily challenge of achieving first-class results whilst adhering to our sense of respon-
sibility for the needs of our employees and customers. We put our knowledge and global
presence to good use to make a positive contribution to the environment and society.
We concentrate these efforts on environmental protection, disaster management and
education. We also support the voluntary work of our employees.

The results of our annual, Group-wide employee opinion survey continue to be very
positive. With a participation rate of 77 %, slightly fewer employees took part than in
the previous year because we have changed our communication and reporting methods.
The annual survey of private customers carried out by the Kundenmonitor
Deutschland independent market study shows that 95 % (previous year: 96 %) of our cus-
tomers are satisfied with Deutsche Post’s postal services. We achieved excellent results
in letter transit times within Germany. According to surveys conducted by the quality
research institute Quotas, we exceeded the 80 % legal requirement by a wide margin:
94 % of the letters we received during our daily opening hours or before final post box
collections were delivered the next day.

dpdhl.com/en/investors

Employees, page 74

Deutsche Post DHL 2013 Annual Report

117

Corporate Governance Report

Corporate Governance

Corporate responsibility, page 79 ff.

Page 78 f.

Code of Conduct, diversity and compliance management

The Group’s Code of Conduct has been applicable in all regions and all divisions
since the middle of 2006. In view of changing legal and social requirements, the Group
updated the Code of Conduct. The code now places particular emphasis on our respect
for human rights, our opposition to all forms of forced and child labour and our respect
for basic principles and rights in the working environment, in accordance with national laws
and conventions. The corporate responsibility section has also been updated.

Deutsche Post DHL’s Code of Conduct lays down guidelines for day-to-day work-
place conduct and is applicable in all regions and divisions. It covers issues ranging from
quality, our relationship with our customers and standards on co-operation and integrity
in our business practices, to corporate responsibility and the environment. Both the
full Code of Conduct and a simplified text version are available to staff in 21 languages.
There is also a web-based training course.

The Code of Conduct is underpinned by further guidelines: the anti-corruption
policy gives clear instructions on how to handle gifts, benefits and offers of hospital-
ity. The competition compliance policy gives specific guidelines on the prohibition of
agreements with competitors. The Code of Conduct for suppliers is included in all
procurement contracts and existing long-term framework agreements. It obliges com-
panies that work with us to adhere to ethical and ecological standards. A ban on child
and forced labour is in place. Salaries and working times must comply with national
laws and regulations.

In mid-2013, Deutsche Post AG’s Board of Management adopted its statement on
Diversity & Inclusion. One topic covered by this statement is our strategic approach to
women in management positions. Since the end of 2011, we have been implementing a
package of measures to increase the proportion of women in management positions on
a sustainable basis. We have made a formal commitment to achieving this, introduced a
system of key indicators, set up mentoring programmes, provided support for women’s
networks and worked continually to improve work-family balance. We have also made
a diversity training course available to executives throughout the Group which focuses
on this topic. As at 31 December 2013, the proportion of women in managerial positions
around the world stood at 19.6 % – up two percentage points compared with 2011, when
the “Women in Management Positions” project was started.

The Supervisory Board supports the Group’s diversity strategy, with a particular
focus on the objective of increasing the number of women on the Board of Management.
It sees the efforts for greater diversity as being part of long-term succession planning,
for which the Supervisory Board and Board of Management are jointly responsible. In
the opinion of the Supervisory Board, the targeted increase in the number of women
in executive positions is necessary to ensure that, overall, more suitable female candi-
dates are available for vacant positions on the Board of Management. The international
composition of the Board of Management already strongly reflects the global activity
of the company.

We consider the health and safety of our employees to be prerequisites for perform-
ance and motivation and a key factor in the company’s continued success. Our Group
health and safety strategy is based on the Healthy Workplace model launched by the
World Health Organisation. It integrates the four areas of workplace design, corporate
culture, improving the health resources available to individuals and supporting the
society as a whole. Each year we recognise exemplary initiatives with our Corporate
Health Award.

118

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report

At Deutsche Post DHL, the Chief Compliance Officer is responsible for the com-
pliance management system and reports directly to the Chief Financial Officer. The
Chief Compliance Officer is supported by the Global Compliance Office, which
establishes compliance management standards on a Group-wide basis and supports
the corresponding activities of the divisions. Each of the four operating divisions has
a Compliance Officer, who regularly presents a report to the Board of Management
member for the respective division. These reports are incorporated into the Chief
Compliance Officer’s reports to the Board of Management and to the Finance and Audit
Committee of the Supervisory Board.

One of the main functions of compliance management at Deutsche Post DHL
is to implement a systematic process which allows for the identification of potential
compliance risks, the evaluation of compliance matters relating to business partners,
co- ordinated reporting of any breaches of law or guidelines, the management of guide-
lines and the development and implementation of training and communication on
com pliance. We made changes to our compliance hotline in 2013. It is available in
around 150 countries and assists employees in reporting breaches of law or the Code of
Conduct within the company; it also provides a structure for addressing and resolving
breaches. The insights gained from breaches that are reported are used to improve the
compliance management system on an ongoing basis. In addition, further steps were
taken to improve Group-wide communication on compliance matters, in order to re-
mind employees of their relevance and brief them specifically on the Code of Conduct.

Working methods of the Board of Management and the Supervisory Board

As a German listed public limited company, Deutsche Post AG follows a dual
manage ment system. The Board of Management is responsible for the management of the
company. It is appointed, overseen and advised by the Supervisory Board.

In addition to the board departments of the Chief Executive Officer (CEO), the CFO
and the Board Member for Human Resources, the Board of Management also includes
the operating board departments of MAIL, EXPRESS, GLOBAL FORWARDING, FREIGHT
and SUPPLY CHAIN.

With the consent of the Supervisory Board, the Board of Management has estab-
lished rules of procedure that lay down objectives for structure, management and
co- operation within the Board of Management. Within this framework, each board
member manages their department independently and informs the rest of the board on
key developments at regular intervals. The Board of Management as a whole decides on
matters of particular significance for the company or the Group. In addition to tasks that
it is prohibited by law from delegating, these include all decisions that must be presented
to the Supervisory Board for approval. The entire Board of Management also decides
on matters brought forth by one member of the Board of Management for decision by
the Board of Management as a whole.

In making their decisions, the members of the Board of Management may not
pursue personal interests or exploit business opportunities due to the company for their
own benefit. They are required to disclose any conflicts of interest to the Supervisory
Board without delay.

The Supervisory Board advises and oversees the Board of Management and appoints
the members of the Board of Management. It has established rules of procedure that
include the fundamental principles of its internal structure, a catalogue of Board of
Manage ment transactions requiring its approval and rules for the Supervisory Board
committees. It meets at least twice every six months in a calendar year, with special

Members, page 114 f.,
Mandates, page 116

Members, page 113 f.,
Mandates, page 116

Page 113

Deutsche Post DHL 2013 Annual Report

119

Corporate Governance Report

Corporate Governance

Page 109 ff.

meetings held whenever particular developments or measures need to be discussed
or decided quickly. In financial year 2013, the Supervisory Board met for five plenary
meetings, 16 committee meetings and one closed meeting, as described in the Report of
the Supervisory Board.

The Board of Management and the Supervisory Board engage in regular dialogue
regarding strategic measures, planning, business development, risk exposure and risk
management as well as company compliance. The Board of Management informs the
Supervisory Board promptly and fully on all topics of significance.

All Supervisory Board decisions, particularly those concerning transactions that
require its approval, are deliberated and discussed extensively in the relevant committees.
At each plenary meeting, the Supervisory Board is informed in detail about the work
and decisions of its committees.

In making their decisions, the members of the Supervisory Board may not pursue
personal interests or exploit business opportunities due to the company for their own
benefit. They are required to disclose any conflicts of interest to the Supervisory Board.
Any significant conflicts of interest on the part of a Supervisory Board member that
are not merely temporary in nature should lead to that member’s resignation from
the Board. All members of the Supervisory Board are independent as defined by the
German Corporate Governance Code.

Executive committees and Supervisory Board committees

Executive committees prepare the decisions to be made by the Board of Manage-
ment as a whole and make decisions on matters assigned to them. Their duties include
preparing or deciding on investments and transactions in the various divisions. The
Deutsche Post Executive Committee is responsible for the MAIL division, the cross-
divisional DHL Executive Committee is in charge of the EXPRESS, GLOBAL FORWARDING,
FREIGHT and SUPPLY CHAIN divisions, and the CC & GBS Executive Committee covers
the Corporate Center (CC) and Global Business Services (GBS). The CEO, the CFO and
the Board Member for Human Resources have permanent representation on the com-
mittees, while the board members for the divisions are represented on the committees
in matters relating to their divisions. Along with the relevant members of the Board of
Management, the executive committees also include first-tier executives below the Board
of Management level. Depending upon the matter being discussed, other executives also
attend the meetings. Procurement and Controlling are called in to consult on capital
expenditure, for instance, and Corporate Finance, Corporate Development and Legal
Services in the case of acquisitions. The DHL Executive Committee and the Deutsche
Post Executive Committee each meet at least once a month; the CC & GBS Executive
Committee usually meets every quarter.

Furthermore, business review meetings take place once per quarter. These meet-
ings are part of the strategic performance dialogue between the divisions, the CEO and
the CFO. They comprise discussions on strategic measures, operating topics and the
budgetary situation of the divisions.

Pages 114 f. and 116

For the members of the Board of Management, see Board of Management and Mandates

held by the Board of Management.

The Supervisory Board has formed six committees to ensure the efficient discharge
of its duties; in particular, these committees prepare the resolutions of the plenary meet-
ings of the Supervisory Board. Decisions on certain topics are delegated by the Super-
visory Board to the individual committees for a final decision.

120

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report

The Executive Committee’s duties include arranging the appointment of members of
the Board of Management and determining the remuneration of the Board of Manage-
ment at the plenary meeting of the Supervisory Board. The members of the Executive
Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis (Deputy Chair), Rolf
Bauermeister, Werner Gatzer, Roland Oetker and Stefanie Weckesser.

The Finance and Audit Committee oversees the accounting process, the effective-
ness of the internal control system, the risk management and internal auditing systems
as well as the financial statement audit. It examines questions of compliance, discusses
the half-yearly and quarterly financial reports with the Board of Management before
they are published, and prepares plenary meeting resolutions on company acquisitions
or disposals that require approval. Based on its own preliminary assessment, it makes
proposals for the approval of the annual and consolidated financial statements by the
Super visory Board. The members of the Finance and Audit Committee for 2013 were
Hero Brahms (Chair), Stephan Teuscher (Deputy Chair), Werner Gatzer, Thomas
Koczelnik, Stefan Schulte and Helga Thiel. Hero Brahms and Stefan Schulte are finan-
cial experts as defined by sections 100 (5) and 107 (4) of the AktG. Both have many
years’ experience as CFO s of various companies. The chairman of the Finance and Audit
Committee, Hero Brahms, has been CFO at a number of companies since 1982, most
recently at Linde AG, where he was responsible for balance sheets, taxation, business
management, audits, finance and personnel. Between 2001 and 2003 Stefan Schulte was
a member of the board responsible for finance at Deutz AG, and between 2003 and 2007
he was the member of the Board of Management responsible for finance at Fraport AG,
where he has served as CEO since 2009.

The Personnel Committee discusses human resources principles for the Group. The
Personnel Committee’s members are Andrea Kocsis (Chair), Wulf von Schimmelmann
(Deputy Chair), Thomas Koczelnik and Roland Oetker.

The Mediation Committee carries out the duties assigned to it pursuant to the Mit-
bestimmungsgesetz (MitbestG – German Co-determination Act). The members of the
Mediation Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis (Deputy
Chair), Rolf Bauermeister and Roland Oetker.

The Nomination Committee presents the shareholder representatives of the Super-
visory Board with recommendations for potential shareholder members of the Super-
visory Board eligible for election at the AGM. In doing so, it takes into consideration the
objectives adopted by the Supervisory Board concerning its composition. The members
of the Nomination Committee are Wulf von Schimmelmann (Chair), Werner Gatzer
and Roland Oetker.

The Strategy Committee was set up in December 2013 and will prepare material for
discussion by the Supervisory Board relating to strategic matters and any new activities
the company is to undertake, or existing activities that it will discontinue. It will also
hold regular discussions on the competition faced by the company. The members of
the Strategy Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis ( Deputy
Chair), Rolf Bauermeister, Henning Kagermann, Thomas Koczelnik and Ulrich Schröder.
Information about the work of the Supervisory Board and its committees in
finan cial year 2013 is also contained in the Report of the Supervisory Board. You can find
information about the members of the Supervisory Board and the composition of the
Supervisory Board committees under the sections Supervisory Board and Mandates held
by the Supervisory Board.

Page 109 ff.

Members, page 113,
Mandates, page 116

Deutsche Post DHL 2013 Annual Report

121

Corporate Governance Report

Corporate Governance

Targets for the composition of the Supervisory Board

The Supervisory Board set specific targets for its composition in December 2010,
adding a further objective relating to the number of independent members of the Super-
visory Board in December 2012:

1 The candidate proposals of the Supervisory Board to the General Meeting for the
election of Supervisory Board members shall be made in the interest of the enter-
prise only. Within this framework, the Supervisory Board aims to ensure that on
the entire Supervisory Board the share of independent members of the Supervisory
Board within the meaning of section 5.4.2 of the German Corporate Governance
Code shall be at least 75% and the share of female representation in the year 2015
shall be 30%.

2 The international activity of the enterprise is already adequately reflected in the
composition of the Supervisory Board. The Supervisory Board aims at maintaining
this and will therefore, in future proposals to the General Meeting, consider candi-
dates, whose origin, education or professional experience, equip them with special
international knowledge and experience.

3 Conflicts of interest of Supervisory Board members are an obstacle to independent
and efficient counselling and supervision of the Board of Management. The Super-
visory Board decides in each case in accordance with the law and in due consider-
ation of the German Corporate Governance Code, how to deal with potential or
actual conflicts of interest.

4 In accordance with the age limit adopted by the Supervisory Board and laid down
in the Rules of Procedure for the Supervisory Board, proposals for the election of
Supervisory Board members shall consider the fact that the term of office shall end
no later than the close of the Annual General Meeting after the Supervisory Board
member reaches the age of 72.

The composition of the Supervisory Board remained unchanged during the report-
ing period and is in accordance with the above-mentioned targets. As a result of the
re-election of all employee representatives by the Delegate Assembly in April 2013 and
the re-election of Wulf von Schimmelmann by the AGM in May 2013, the composition
of the Supervisory Board did not change. The current composition of the Super visory
Board exceeds the objective relating to the number of independent members. In respect
of the other objectives, the Supervisory Board was able to maintain the satisfactory
level which had already been achieved. There are six female members of the Super-
visory Board, meaning that women currently make up 30 % of its members. The present
composition of the Supervisory Board adequately reflects the company’s international
operations. Numerous members possess special international knowledge and experience.
The AGM due to take place in May 2014 will duly elect or re-elect four shareholder
representatives to the Supervisory Board. The nominations put forward by the Super-
visory Board to the AGM takes into account the fact that Hero Brahms, who has rendered
a significant contribution to the Supervisory Board over many years, both as a member
of the Presidium and as chair of the Finance and Audit Committee, will not be standing
for re-election due to the specified upper age limit. In putting forward its nominations,
the Supervisory Board has set itself the goal of increasing the proportion of women on
the Supervisory Board.

122

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report
Remuneration report

Remuneration report

The remuneration report also forms part of the Group Management Report.

Remuneration structure of the Group Board of Management in financial year 2013

The remuneration paid to individual Board of Management members for finan-
cial year 2013 was determined by the Supervisory Board, which held consultations to
resolve on the remuneration system for the Board of Management, including the main
contractual elements. In so doing it obtained advice from an independent remuneration
consultant.

The Board of Management remuneration reflects the size and global reach of the
company, its economic and financial situation and the roles and achievements of the
individual members. It is set to ensure competitiveness with comparable German and
inter national companies, thus incentivising the Board of Management members to
deliver maximum performance and achieve results.

The remuneration paid to the Board of Management for 2013 is in line with standard
market practice, appropriate to the tasks involved and designed to reward performance;
it comprises fixed (non-performance-related) elements and variable (performance-
related) elements, which include short, medium and long-term incentives. The remu-
neration as a whole as well as its variable components have been capped.

Non-performance-related components are the annual base salary (fixed annual
remuneration), fringe benefits and pension commitments. The annual base salary is
paid in twelve equal monthly instalments retroactively at the end of each month. Fringe
benefits mainly comprise the use of company cars, supplements for insurance premiums
and special allowances and benefits for assignments outside the home country.

The variable remuneration paid to the Board of Management is almost entirely
medium and long-term based. Half of the variable remuneration consists of a long-term
incentive plan with a four-year calculation period; the other half is made up of an annual
bonus linked to the company’s yearly profits, with 50 % of the annual bonus flowing into
a medium-term component with a three-year calculation period (deferral). Thus only
25 % of the variable remuneration component is paid out on the basis of a one-year cal-
culation. The amount of the annual bonus is set at the due discretion of the Supervisory
Board on the basis of the company’s performance. The individual annual bonus amounts
reflect the extent to which predefined targets are achieved, missed or exceeded. The
maximum amount of the annual bonus may not exceed 100 % of the annual base salary.
In the reporting year, an addition was made to the criteria used to calculate the
amount of the annual bonus. The Group’s reported free cash flow is now included in
the target agreements for all members of the Board of Management. Another key par-
ameter for all Board of Management members is, as in previous years, the Group’s EBIT
after asset charge performance metric, including the asset charge on goodwill before
goodwill impairment (EAC). For the Board of Management members in charge of the
MAIL, GLOBAL FORWARDING, FREIGHT, EXPRESS and SUPPLY CHAIN divisions, the EAC
of their respective division is also a key parameter. Furthermore, an employee-related
target is agreed with all Board of Management members based on the annual employee
opinion survey, as are additional targets.

Deutsche Post DHL 2013 Annual Report

123

Corporate Governance Report
Remuneration report

Corporate Governance

Achievement of the upper targets for the financial year that have been agreed based
on demanding objectives is rewarded with the maximum annual bonus. If the targets
specified for the financial year are only partially reached or completely missed, the
annual bonus will be paid on a pro-rata basis or not at all. The Supervisory Board may
also elect to award an appropriate special bonus for extraordinary achievement.

The annual bonus is not paid in full in a single instalment on the basis of having
reached the agreed targets. Instead, 50 % of the annual bonus flows into a medium-term
component with a three-year calculation period (performance phase of one year, sus-
tainability phase of two years). This medium-term component will be paid out after
expiry of the sustainability phase subject to the condition that EAC, as an indicator of
sustainability, is reached during the sustainability phase. Otherwise, payment of the
medium-term component is forfeited without compensation. This demerit system puts
greater emphasis on sustainable company development in determining management
board remuneration and sets long-term incentives.

Stock appreciation rights (SAR s) are granted as a long-term remuneration com-
ponent based on the Long-Term Incentive Plan resolved by the Supervisory Board in
2006 (2006 LTIP).

Each SAR entitles the holder to receive a cash settlement equal to the difference
between the average closing price of Deutsche Post shares for the five trading days
preceding the exercise date and the exercise price of the SAR. In 2013, the members of
the Board of Management each made a personal financial investment consisting of 10 %
of their annual base salary. The waiting period for the stock appreciation rights is four
years from the date on which they were granted. After expiration of the waiting period,
and provided an absolute or relative performance target has been achieved, the SAR s
can be exercised wholly or partially for a period of two years. Any SAR s not exercised
during this two-year period will expire.

To determine how many, if any, of the SAR s granted can be exercised, the average
share price or the average index value for the reference period is compared with that of
the performance period. The reference period comprises the last 20 consecutive trading
days prior to the issue date. The performance period is the last 60 trading days before
the end of the waiting period. The average (closing) price is calculated as the average
closing price of Deutsche Post shares in Deutsche Börse AG’s Xetra trading system.

A maximum of four out of every six SAR s can be “earned” via the absolute perform-
ance target and a maximum of two via the relative performance target. If neither an
absolute nor a relative performance target is met by the end of the waiting period, the
SAR s attributable to the related tranche will expire without replacement or compensation.
One SAR is earned each time the closing price of Deutsche Post shares exceeds the
issue price by at least 10 %, 15 %, 20 % or 25 %. The relative performance target is tied
to the performance of the shares in relation to the STOXX Europe 600 Index (SXXP,
ISIN EU0009658202). It is met if the share price equals the index performance or if it
outperforms the index by at least 10 %.

Remuneration from stock appreciation rights is limited to 300 % of the annual target
cash compensation (annual base salary plus the annual target bonus). Moreover, it may
be limited by the Supervisory Board in the event of extraordinary circumstances.

124

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report
Remuneration report

Provisions to cap severance payments pursuant to the Corporate Governance
Code recommendation, change-of-control provisions and post-contractual
non- compete clauses

In accordance with the recommendation of section 4.2.3 of the German Corporate
Governance Code, as amended on 13 May 2013, Board of Management contracts con-
tain a provision stipulating that in the event of the premature termination of a Board of
Management member’s contract, the severance payment may compensate no more than
the remaining term of the contract. The severance payment is limited to a maximum
amount of two years’ remuneration including fringe benefits (severance payment cap).
The severance payment cap is calculated without any special remuneration or the value
of rights allocated from long-term incentive plans.

In the event of a change in control, any member of the Board of Management is
entitled to resign their office for good cause within a period of six months following the
change in control, after giving three months’ notice by the end of a given month, and to
terminate their Board of Management contract (right to early termination).

The contractual provisions stipulate that a change of control exists if a shareholder
has acquired control within the meaning of section 29 (2) of the Wertpapiererwerbs-
und Übernahmegesetz (WpÜG – German Securities Acquisition and Takeover Act) via
possession of at least 30 % of the voting rights, including the voting rights attributable
to such shareholder by virtue of acting in concert with other shareholders as set forth
in section 30 of the WpÜG or if a control agreement has been concluded with the com-
pany as a dependent entity in accordance with section 291 of the Aktiengesetz (AktG –
German Stock Corporation Act) and such agreement has taken effect or if the company
has merged with another legal entity outside of the Group pursuant to section 2 of the
Umwandlungsgesetz (UmwG – German Reorganisation and Transformation Act), unless
the value of such other legal entity, as determined by the agreed conversion rate, is less
than 50 % of the value of the company.

In the event that the right to early termination is exercised or a Board of Manage-
ment contract is terminated by mutual consent within nine months of the change of
control, the Board of Management member is entitled to payment to compensate the
remaining term of their Board of Management contract. Such payment is limited to
150 % of the severance payment cap pursuant to the recommendation of the German
Corporate Governance Code. The amount of the payment is reduced by 25 % if the Board
of Management member has not reached the age of 60 upon leaving the company. If
the remaining term of the Board of Management contract is less than two years and the
Board of Management member has not reached the age of 62 upon leaving the company,
the payment will correspond to the severance payment cap. The same applies if a Board
of Management contract expires prior to the Board of Management member’s reaching
the age of 62 because less than nine months remained on the term of the contract at the
time of the change of control and the contract was not renewed.

Board of Management members are also subject to a non-compete clause, taking
effect on the cessation of their contracts. During the one-year non-compete period, for-
mer Board of Management members receive 100 % of their last contractually stipulated
annual base salary on a pro-rata basis as compensation each month. Any other income
earned during the non-compete period is subtracted from the compensation paid. The
amount of the compensation payment itself is deducted from any severance payments or
pension payments. Prior to, or concurrent with, cessation of the Board of Management

Deutsche Post DHL 2013 Annual Report

125

Corporate Governance Report
Remuneration report

Corporate Governance

contract, the company may declare its waiver of adherence to the non-compete clause.
In such a case, the company will be released from the obligation to pay compensation
due to a restraint on competition six months after receipt of such declaration.

Apart from the aforementioned arrangements, no member of the Board of Manage-

ment has been promised any further benefits after leaving the company.

Amount of remuneration paid to active members of the Group Board of Management
in financial year 2013

The remuneration paid to active members of the Board of Management in financial
year 2013 totalled €13.21 million (previous year: €13.30 million). This amount comprised
€7.84 million in non-performance-related components (previous year: €7.64 million)
and €5.37 million in the performance-related component paid out (previous year:
€5.66 million). An additional €3.33 million of the performance-related component was
transferred to the medium-term component and will be paid out in 2016 subject to the
condition that the required EAC, as an indicator of sustainability, be reached.

The members of the Board of Management were granted a total of 1,984,818 SAR s
in financial year 2013 for a total value of €7.30 million (previous year: €7.04 million) at
the time of issue (1 August 2013). The following tables present the total remuneration
paid to active Board of Management members (individual breakdown):

B.05 Remuneration paid to the Group Board of Management in 2013: cash components

€

Non-performance related

Performance
related

Board members

Annual
base salary

Fringe benefits

Annual bonus

Dr Frank Appel, Chairman

1,962,556

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen

Angela Titzrath

930,000

860,000

930,000

953,250

930,000

715,000

30,093

97,403

203,918

124,884

23,858

20,220

61,234

834,086

453,375

384,678

446,493

457,274

453,375

303,875

1 This amount will be paid out in 2016 provided the sustainability indicator is fulfilled.

Payout from
medium-term
component
(2011)

436,268

208,708

290,228

421,317

465,000

215,000

Total

3,263,003

1,689,486

1,738,824

1,922,694

1,899,382

1,618,595

–

1,080,109

Share of
annual bonus
transferred to
medium-term
component
(2013) 1

834,086

453,375

384,678

446,493

457,274

453,375

303,875

B.06 Remuneration paid to the Group Board of Management in 2013: share-based component
with long-term incentive effect

€

Active board members

Dr Frank Appel, Chairman

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen

Angela Titzrath

Number
of SAR s

533,304

252,720

233,700

252,720

265,356

252,720

194,298

Value of SAR s
on grant date
(1 Aug. 2013)

1,962,559

930,010

860,016

930,010

976,510

930,010

715,017

126

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report
Remuneration report

Remuneration paid to the Group Board of Management in the previous year (2012)

B.07 Remuneration paid to the Group Board of Management in 2012: cash components

€

Non-performance related

Performance
related

Board members

Annual
base salary

Fringe benefits

Annual bonus

Dr Frank Appel, Chairman

1,841,411

918,333

823,750

930,000

883,333

34,763

99,150

195,571

107,348

21,008

19,305

1,244,325

490,050

407,756

443,610

448,725

579,150

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen 1

Walter Scheurle
(until 30 April 2012)

Angela Titzrath
(since 1 May 2012)

Payment from
medium-term
component
(2010)

415,493

175,032

Total

3,535,992

1,682,565

–

1,427,077

214,549

340,000

215,000

1,695,507

1,739,733

1,696,788

Share of
annual bonus
transferred to
medium-term
component 2

519,194

419,100

407,756

443,610

448,725

295,350

310,000

6,707

230,175

223,380

770,262

76,725

476,667

42,227 3

235,950

–

754,844

235,950

1 In financial year 2012, an additional €209,000 was paid out as compensation for rights that lapsed as a result

of Mr Rosen’s transfer to Deutsche Post AG. The compensation payment is described in the 2009 Annual Report.

2 This amount will be paid out in 2015 provided the sustainability indicator is fulfilled.
3 In financial year 2012, an additional €538,835 was paid out as compensation for rights that lapsed as a result

of Ms Titzrath’s transfer to Deutsche Post AG, as described above.

B.08 Remuneration paid to the Group Board of Management in 2012: share-based component
with long-term incentive effect

€

Active board members

Dr Frank Appel, Chairman

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen

Angela Titzrath (since 1 May 2012)

Number
of SAR s

544,068

278,448

257,490

278,448

257,490

214,074

Value of SAR s
on grant date
(1 July 2012)

1,817,187

930,016

860,017

930,016

860,017

715,007

Pension commitments under the previous system

Dr Frank Appel and Jürgen Gerdes have direct, final-salary based pension commit-
ments on the basis of their individual contracts, providing for benefits in case of per-
manent disability, death or retirement. If the contract of a member ends after at least
five years of service on the Board of Management, the entitlements they have acquired
will vest in full. Members become entitled to benefits due to permanent disability after
at least five years of service. Eligibility for retirement benefits begins at the earliest at
the age of 55, or at the age of 62 in the case of Jürgen Gerdes. The members of the Board
of Management may choose between annuity payments and a lump sum payment. The
benefit amount depends on the pensionable income and the pension level derived from
the years of service.

Deutsche Post DHL 2013 Annual Report

127

Corporate Governance Report
Remuneration report

Corporate Governance

Pensionable income consists of the annual base salary (fixed annual remuneration)
computed on the basis of the average salary over the last twelve calendar months of
employment. Members of the Board of Management attain a pension level of 25 % after
five years of service. The maximum pension level of 50 % is attained after ten years of
service. Subsequent pension benefits increase or decrease to reflect changes in the con-
sumer price index in Germany.

B.09 Pension commitments under the previous system in financial year 2013: individual breakdown

Pension commitments

Pension
level on
31 Dec. 2013
%

Maximum
pension level
%

Service cost for pension
obligation, financial year 2013
€

Present value
(DBO) as at
31 Dec. 2013
€

823,857

11,083,250

244,254

4,749,766

1,068,111

15,833,016

Dr Frank Appel, Chairman

Jürgen Gerdes

Total

B.10 Pension commitments under the previous system in the previous year (2012): individual breakdown

Pension
level on
31 Dec. 2012
%

Pension commitments

Maximum
pension level
%

Service cost for pension
obligation, financial year 2012
€

Present value
(DBO) as at
31 Dec. 2012
€

614,968

10,447,301

213,097

686,493

4,598,461

–

1,514,558

15,045,762

Dr Frank Appel, Chairman

Jürgen Gerdes 1

Walter Scheurle (until 30 April 2012)

Total

1 Should benefits fall due whilst the Board member concerned is actively employed, their amount
will be calculated in accordance with the Pension Regulations of Deutsche Post AG (VersOPost)
at a minimum (based on a salary of €525,000).

Pension commitments under the new system

Since 4 March 2008, newly appointed Board of Management members have re-
ceived pension commitments based on a defined contribution plan rather than the
previous commitments, which were based on the final salary. Under the defined contri-
bution pension plan, the company credits an annual amount of 35 % of the annual base
salary to a virtual pension account for the Board of Management member concerned.
The maximum contribution period is 15 years. The pension capital accrues interest at an
annual rate equal to the “iBoxx Corporates AA 10+ Annual Yield” rate, or at an annual
rate of 2.25 % at minimum, and will continue to do so until the pension benefits fall due.
The pension benefits are paid out in a lump sum in the amount of the value accumulated
in the pension account. The benefits fall due when the Board of Management member
reaches the age of 62 or in the case of invalidity or death whilst being employed. In the
event of benefits falling due, the pension beneficiary may opt to receive an annuity pay-
ment in lieu of a lump sum payment. If this option is exercised, the capital is converted to
an annuity payment, taking into account the average “iBoxx Corporates AA 10+ Annual
Yield” for the past ten full calendar years as well as the individual data of the surviving
dependents and a future pension increase of 1 % per year.

128

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report
Remuneration report

B.11 Board of Management pension commitments under the new system in financial year 2013:
individual breakdown

€

Ken Allen

Roger Crook

Bruce Edwards

Lawrence Rosen

Angela Titzrath

Total

Total
contribution
for 2013

Present value
(DBO) as at
31 Dec. 2013

325,500

301,000

325,500

250,250

1,397,841

783,308

1,852,506

2,396,295

461,924

Service cost for pension
obligation, financial year 2013

318,826

298,666

327,236

321,414

239,711

1,527,750

6,891,874

1,505,853

B.12 Board of Management pension commitments under the new system in the previous year (2012):
individual breakdown

€

Ken Allen

Roger Crook

Bruce Edwards

Lawrence Rosen

Angela Titzrath (since 1 May 2012)

Total

Total
contribution
for 2012

Present value
(DBO) as at
31 Dec. 2012

301,000

250,250

325,500

301,000

1,027,195

454,642

1,482,117

1,977,370

526,833 1

198,981

1,704,583

5,140,305

Service cost for pension
obligation, financial year 2012

297,574

244,487

329,531

300,978

–

1,172,570

1 Pro-rated contribution for eight months, plus a starting balance of €360,000. The starting balance will not
be credited if Ms Titzrath leaves the company of her own volition prior to reaching the age of 60 or works
for the company after reaching the age of 60.

Benefits for former Board of Management members

Benefits paid to former members of the Board of Management or their surviving
dependents amounted to €4.4 million in financial year 2013 (previous year: €4.6 mil-
lion). The defined benefit obligation (DBO) for current pensions calculated under IFRS s
amounted to €72 million (previous year: €78 million).

Supervisory Board remuneration

Pursuant to article 17 of the Articles of Association of Deutsche Post AG resolved
by the Annual General Meeting in the version applicable until 31 December 2013,
the annual remuneration paid to the members of the Supervisory Board comprises a
non-performance-related, i.e., fixed, component, a variable component geared towards
sustainable corporate development and the attendance allowance.

As in the previous year, the fixed component amounted to €40,000. The variable
remuneration component for financial year 2013 will amount to €1,000 for each €0.02
by which the consolidated net profit per share for financial year 2015 exceeds the con-
solidated net profit per share for financial year 2012. This variable remuneration compo-
nent will fall due for payment as at the end of the 2016 AGM. The variable remuneration
component is subject to a cap equal to 50 % of the fixed component.

The Supervisory Board chairman and the Supervisory Board committee chairs
receive an additional 100 % of the fixed and variable remuneration, and the Super visory
Board deputy chair and committee members receive an additional 50 %. This does not
apply to the Mediation or Nomination Committees. Those who only serve on the Super-
visory Board or its committees, or act as chair or deputy chair, for part of the year are
remunerated on a pro-rata basis.

Deutsche Post DHL 2013 Annual Report

129

Corporate Governance Report
Remuneration report

Corporate Governance

As in the previous year, Supervisory Board members receive an attendance allow-
ance of €1,000 for each plenary meeting of the Supervisory Board or committee meeting
that they attend. They are entitled to the reimbursement of out-of-pocket cash expenses
incurred in the exercise of their office. Any value added tax charged on Supervisory
Board remuneration or out-of-pocket expenses is reimbursed.

The remuneration for 2013, consisting of a fixed component and the attendance
allowance, totalled €1,416,833 (previous year: €1,461,500). The following table shows
the remuneration paid to each Supervisory Board member:

B.13 Remuneration paid to Supervisory Board members in 2013

€

Board members

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Rolf Bauermeister

Hero Brahms

Heinrich Josef Busch

Werner Gatzer

Prof. Dr Henning Kagermann

Thomas Koczelnik

Anke Kufalt

Thomas Kunz

Roland Oetker

Andreas Schädler

Sabine Schielmann

Dr Ulrich Schröder

Dr Stefan Schulte

Stephan Teuscher

Helga Thiel

Elmar Toime

Stefanie Weckesser

Prof. Dr-Ing. Katja Windt

Fixed
component

Attendance
allowance

141,667

120,833

60,833

80,000

40,000

80,000

40,833

80,833

40,000

80,000

40,000

40,833

60,000

40,000

60,000

40,000

16,000

13,000

9,000

12,000

4,000

12,000

3,000

16,000

5,000

4,000

14,000

5,000

4,000

10,000

12,000

9,000

5,000

9,000

4,000

Maximum
variable
remuneration
(cap) 1

70,833

60,416

30,416

40,000

20,000

40,000

20,416

40,416

20,000

40,000

20,000

20,416

30,000

20,000

30,000

20,000

Total

157,667

133,833

69,833

92,000

44,000

92,000

43,833

96,833

45,000

44,000

94,000

45,000

44,833

70,000

72,000

69,000

45,000

69,000

44,000

1 This variable remuneration component will fall due for payment as at the end of the 2016 AGM

after determination of the consolidated net profit per share for financial year 2015.

The AGM resolved on 29 May 2013 to modify the Supervisory Board remuneration
as at 1 January 2014 and accordingly amended section 17 of the Articles of Association
of Deutsche Post AG. The performance-related remuneration component is now no
longer in force, and the fixed component increased to €70,000. All other provisions
such as those relating to the attendance allowance and the percentage increases for the
Supervisory Board chairman, the deputy chair and the committee chairs and committee
members have remained the same.

130

Deutsche Post DHL 2013 Annual Report

Corporate Governance

Corporate Governance Report
Remuneration report

The variable remuneration for financial year 2011 falls due for payment as at the end
of the 2014 AGM if the consolidated net profit per share for financial year 2013 exceeds
the consolidated net profit per share for financial year 2010. Since this condition was
not met, no performance-related remuneration with a long-term incentive effect will
be paid out for financial year 2011.

The remuneration for the previous year (2012), consisting of a fixed component
and the attendance allowance, is shown in the following table for each Supervisory
Board member:

B.14 Remuneration paid to Supervisory Board members in 2012

€

Board members

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Wolfgang Abel (until 12 September 2012)

Rolf Bauermeister

Hero Brahms

Heinrich Josef Busch

Werner Gatzer

Prof. Dr Henning Kagermann

Thomas Koczelnik

Anke Kufalt

Thomas Kunz

Roland Oetker

Andreas Schädler

Sabine Schielmann

Dr Ulrich Schröder

Dr Stefan Schulte

Stephan Teuscher (since 29 October 2012)

Helga Thiel

Elmar Toime

Stefanie Weckesser

Prof. Dr-Ing. Katja Windt

Fixed
component

Attendance
allowance

140,000

120,000

42,500

60,000

80,000

40,000

80,000

40,000

80,000

40,000

80,000

40,000

60,000

10,000

60,000

40,000

60,000

40,000

21,000

16,000

6,000

12,000

17,000

7,000

19,000

6,000

19,000

7,000

5,000

17,000

7,000

6,000

15,000

2,000

16,000

5,000

12,000

7,000

1 This variable remuneration component will fall due for payment as at the end of the 2015 AGM

after determination of the consolidated net profit per share for financial year 2014.

Maximum
variable
remuneration
(cap) 1

70,000

60,000

21,250

30,000

40,000

20,000

40,000

20,000

40,000

20,000

40,000

20,000

30,000

5,000

30,000

20,000

30,000

20,000

Total

161,000

136,000

48,500

72,000

97,000

47,000

99,000

46,000

99,000

47,000

45,000

97,000

47,000

46,000

75,000

12,000

76,000

45,000

72,000

47,000

Deutsche Post DHL 2013 Annual Report

131

Corporate Governance Report
Remuneration report

Corporate Governance

In addition, the variable remuneration for financial year 2010 was paid out in the
previous year (2012) in the amount of €465,000, of which €41,875 was to Board mem-
bers who have now left the company and €423,125 to active Board members. The follow-
ing table shows the remuneration paid to each Supervisory Board member:

B.15 Variable remuneration paid to Supervisory Board members for 2010

€

Active Board members

Prof. Dr Wulf von Schimmelmann (Chair)

Andrea Kocsis (Deputy Chair)

Wolfgang Abel (until 12 September 2012)

Rolf Bauermeister

Hero Brahms

Heinrich Josef Busch

Werner Gatzer

Prof. Dr Henning Kagermann

Thomas Koczelnik

Anke Kufalt

Thomas Kunz 1

Roland Oetker

Andreas Schädler

Sabine Schielmann (since 27 October 2010)

Dr Ulrich Schröder

Dr Stefan Schulte

Stephan Teuscher (since 29 October 2012) 1

Helga Thiel

Elmar Toime

Stefanie Weckesser

Prof. Dr-Ing. Katja Windt 1

1 Not a Board member in financial year 2010.

Variable
remuneration
(cap)

52,500

45,000

22,500

30,000

15,000

30,000

15,000

30,000

15,000

–

30,000

15,000

3,125

15,000

22,500

–

22,500

15,000

22,500

–

132

Deutsche Post DHL 2013 Annual Report

CONSOLIDATED
FINANCIAL STATEMENTS

133 – 214 c

c Consolidated FinanCial statementsc CONSOLIDATED

FINANCIAL STATEMENTS

135

INCOME STATEMENT

136 STATEMENT OF COMPREHENSIVE INCOME

137 BALANCE SHEET

138 CASH FLOW STATEMENT

139 STATEMENT OF CHANGES IN EQUITY

140 NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS OF DEUTSCHE POST AG

140 BASIS OF PREPARATION
140
140
144
145
146

1 – Basis of accounting
2 – Consolidated group
3 – Significant transactions
4 – Adjustment of prior-period amounts
5 – New developments in international accounting

under IFRS s

149
149
156

6 – Currency translation
7 – Accounting policies
8 – Exercise of judgement in applying the accounting

policies

157

9 – Consolidation methods

158
158

SEGMENT REPORTING
10 – Segment reporting

161
161
161
161
162
162
163
163
163
164
165
165
165
165

INCOME STATEMENT DISCLOSURES
11 – Revenue
12 – Other operating income
13 – Materials expense
14 – Staff costs / employees
15 – Depreciation, amortisation and impairment losses
16 – Other operating expenses
17 – Net income from associates
18 – Net other finance costs
19 – Income taxes
20 – Consolidated net profit for the period
21 – Non-controlling interests
22 – Earnings per share
23 – Dividend per share

166 BALANCE SHEET DISCLOSURES
166
168
169

24 – Intangible assets
25 – Property, plant and equipment
26 – Investment property

170
170
171
171
171
171
172
172
172
172
172

173
175
175
176
176
177
177
184
185
188
188

27 – Investments in associates
28 – Non-current financial assets
29 – Other non-current assets
30 – Deferred taxes
31 – Inventories
32 – Current financial assets
33 – Trade receivables
34 – Other current assets
35 – Income tax assets and liabilities
36 – Cash and cash equivalents
37 – Assets held for sale and liabilities associated

with assets held for sale

38 – Issued capital
39 – Capital reserves
40 – Other reserves
41 – Retained earnings
42 – Equity attributable to Deutsche Post AG shareholders
43 – Non-controlling interests
44 – Provisions for pensions and similar obligations
45 – Other provisions
46 – Financial liabilities
47 – Other liabilities
48 – Trade payables

189 CASH FLOW DISCLOSURES
189

49 – Cash flow disclosures

191 OTHER DISCLOSURES
191
205
205
206
207
208
211
211
212

50 – Risks and financial instruments of the Group
51 – Contingent liabilities
52 – Other financial obligations
53 – Litigation
54 – Share-based payment
55 – Related party disclosures
56 – Auditor’s fees
57 – Exemptions under the HGB and local foreign legislation
58 – Declaration of Conformity with the German Corporate

Governance Code

212

59 – Significant events after the balance sheet date

213 RESPONSIBILITY STATEMENT

214

INDEPENDENT AUDITOR’S REPORT

Consolidated Financial Statements

Income Statement

C.01 INCOME STATEMENT

1 January to 31 December

€ m

Revenue

Other operating income

Total operating income

Materials expense

Staff costs

Depreciation, amortisation and impairment losses

Other operating expenses

Total operating expenses

Profit from operating activities (eBIt)

Net income from associates

Other financial income

Other finance costs

Foreign currency result

Net other finance costs

Net finance costs

Profit before income taxes

Income taxes

Consolidated net profit for the period

attributable to Deutsche Post AG shareholders

attributable to non-controlling interests

Basic earnings per share (€)

Diluted earnings per share (€)

Note 4.

Note

2012
adjusted 1

55,512

2,168

57,680

–31,863

–17,770

–1,339

– 4,043

– 55,015

2013

55,085

1,961

57,046

–31,212

–17,785

–1,341

–3,847

– 54,185

2,665

2,861

657

–1,078

–37

– 458

– 456

2,209

– 447

1,762

1,640

122

1.36

1.30

182

– 431

– 42

–291

–289

2,572

–361

2,211

2,091

120

1.73

1.66

Deutsche Post DHL 2013 Annual Report

135

Statement of Comprehensive Income

Consolidated Financial Statements

C.02 STATEMENT OF COMPREHENSIVE INCOME

1 January to 31 December

€ m

Consolidated net profit for the period

Items that will not be reclassified to profit or loss

Change due to remeasurements of net pension provisions

IFRS 3 revaluation reserve

Other changes in retained earnings

Income taxes relating to components of other comprehensive income

Share of other comprehensive income of associates (after tax)

Total (after tax)

Items that may be subsequently reclassified to profit or loss

Ias 39 revaluation reserve

Changes from unrealised gains and losses

Changes from realised gains and losses

Ias 39 hedging reserve

Changes from unrealised gains and losses

Changes from realised gains and losses

Currency translation reserve

Changes from unrealised gains and losses

Changes from realised gains and losses

Income taxes relating to components of other comprehensive income

Share of other comprehensive income of associates (after tax)

Total (after tax)

Other comprehensive income (after tax)

Total comprehensive income

attributable to Deutsche Post AG shareholders

attributable to non-controlling interests

Note 4.

Note

2012
adjusted 1

1,762

–1,198

–2

–1,190

–12

–23

–7

–37

–17

–1,207

555

435

120

2013

2,211

– 50

–1

–14

111

– 49

– 463

–26

–349

–363

1,848

1,738

110

136

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Balance Sheet

C.03 BALANCE SHEET

€ m

assets

Intangible assets

Property, plant and equipment

Investment property

Investments in associates

Non-current financial assets

Other non-current assets

Deferred tax assets

Non-current assets

Inventories

Current financial assets

Trade receivables

Other current assets

Income tax assets

Cash and cash equivalents

Assets held for sale

Current assets

Total assets

eQuItY anD LIaBILItIes

Issued capital

Capital reserves

Other reserves

Retained earnings

Equity attributable to Deutsche Post AG shareholders

Non-controlling interests

Equity

Provisions for pensions and similar obligations

Deferred tax liabilities

Other non-current provisions

Non-current provisions

Non-current financial liabilities

Other non-current liabilities

Non-current liabilities

Non-current provisions and liabilities

Current provisions

Current financial liabilities

Trade payables

Other current liabilities

Income tax liabilities

Liabilities associated with assets held for sale

Current liabilities

Current provisions and liabilities

Total eQuItY anD LIaBILItIes

Note 4.

Deutsche Post DHL 2013 Annual Report

Note

1 Jan. 2012
adjusted 1

31 Dec. 2012
adjusted 1

31 Dec. 2013

12,196

6,493

729

280

1,206

12,151

6,663

1,039

298

1,328

11,836

6,814

1,124

184

1,327

20,988

21,568

21,366

273

2,498

6,934

2,155

239

3,123

1,961

17,183

38,171

1,209

2,170

– 456

6,366

9,289

189

9,478

6,055

186

2,117

8,358

1,366

347

1,713

322

252

6,959

2,153

127

2,400

12,289

33,857

1,209

2,254

– 475

6,031

9,019

209

9,228

5,216

156

1,943

7,315

4,413

276

4,689

403

821

7,040

2,221

168

3,417

14,112

35,478

1,209

2,269

– 819

7,198

9,857

191

10,048

5,017

124

1,574

6,715

4,612

227

4,839

10,071

12,004

11,554

2,134

5,644

6,168

4,106

570

16,488

18,622

38,171

1,663

403

5,991

4,004

534

10,962

12,625

33,857

1,745

1,328

6,392

3,981

430

12,131

13,876

35,478

137

Cash Flow Statement

Consolidated Financial Statements

C.04 CASH FLOW STATEMENT

1 January to 31 December

€ m

Consolidated net profit for the period attributable to Deutsche Post AG shareholders

Consolidated net profit for the period attributable to non-controlling interests

Income taxes

Net other finance costs

Net income from associates

Profit from operating activities (EBIT)

Depreciation, amortisation and impairment losses

Net income from disposal of non-current assets

Non-cash income and expense

Change in provisions

Change in other non-current assets and liabilities

Income taxes paid

Net cash from operating activities before changes in working capital

Changes in working capital

Inventories

Receivables and other current assets

Liabilities and other items

Net cash used in / from operating activities

Subsidiaries and other business units

Property, plant and equipment and intangible assets

Other non-current financial assets

Proceeds from disposal of non-current assets

Subsidiaries and other business units

Property, plant and equipment and intangible assets

Other non-current financial assets

Cash paid to acquire non-current assets

Interest received

Dividend received

Current financial assets

Net cash used in investing activities

Proceeds from issuance of non-current financial liabilities

Repayments of non-current financial liabilities

Change in current financial liabilities

Other financing activities

Proceeds from transactions with non-controlling interests and venturers

Cash paid for transactions with non-controlling interests

Dividend paid to Deutsche Post AG shareholders

Dividend paid to non-controlling interest holders

Purchase of treasury shares

Proceeds from issuing shares or other equity instruments

Interest paid

Net cash from / used in financing activities

Net change in cash and cash equivalents

Effect of changes in exchange rates on cash and cash equivalents

Changes in cash and cash equivalents associated with assets held for sale

Changes in cash and cash equivalents due to changes in consolidated group

Cash and cash equivalents at beginning of reporting period

Cash and cash equivalents at end of reporting period

Note 4.

138

Note

2012
adjusted 1

1,640

122

447

458

–2

2,665

1,339

–74

– 97

–3,034

– 53

– 527

219

– 51

–221

–150

–203

225

299

– 57

–1,639

–336

–2,032

–10

49.1

49.2

–1,697

3,176

–773

– 50

– 62

– 846

–78

–26

–296

1,199

–701

–15

–7

3,123

2,400

49.3

49.4

2013

2,091

120

361

291

–2

2,861

1,341

–22

– 505

– 52

– 561

3,078

–104

– 670

690

2,994

177

241

–37

–1,389

– 68

–1,494

– 575

–1,772

1,010

–34

–21

– 846

–109

–23

–166

–110

1,112

–102

2,400

3,417

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Statement of Changes in Equity

C.05 STATEMENT OF CHANGES IN EQUITY

Other reserves

Issued
capital

Capital
reserves

IFRS 3
revaluation
reserve

IAS 39
revaluation
reserve

IAS 39
hedging
reserve

Currency
translation
reserve

–34

– 517

1 January to 31 December

€ m

Note

Balance at 1 January 2012

Adjustment 1

Balance at 1 January 2012, adjusted

Capital transactions with owner

Dividend

Transactions with non-controlling
interests

Changes in non-controlling interests
due to changes in consolidated group

Issue of shares or other equity
instruments

Purchase of treasury shares

Share Matching Scheme (issuance)

Share Matching Scheme (exercise)

Total comprehensive income

Consolidated net profit for the period

Currency translation differences

Change due to remeasurements
of net pension provisions

Other changes

Balance at 31 December 2012,
adjusted 1

Balance at 1 January 2013

Capital transactions with owner

Dividend

Transactions with non-controlling
interests

Changes in non-controlling interests
due to changes in consolidated group

Issue of shares or other equity
instruments

Purchase of treasury shares

Share Matching Scheme (issuance)

Share Matching Scheme (exercise)

Total comprehensive income

Consolidated net profit for the period

Currency translation differences

Change due to remeasurements
of net pension provisions

Other changes

1,209

2,170

–2

–24

1,209

2,254

–1

–20

Equity
attributable
to Deutsche
Post AG
shareholders

11,009

–1,720

Retained
earnings

8,086

–1,720

6,366

9,289

– 846

–24

–26

Non-
controlling
interests

Total equity

190

–1

189

–79

–25

11,199

–1,721

9,478

– 925

–26

–705

–100

– 805

1,640

–1,190

6,031

– 64

435

9,019

122

–2

120

209

1,762

–1,190

– 64

555

9,228

– 846

–111

– 957

– 61

– 66

–22

2,091

–15

–19

–3

– 85

–3

–23

– 900

–128

–1,028

2,091

– 451

–15

113

1,738

9,857

120

–11

110

191

2,211

– 462

–14

113

1,848

10,048

–2

– 470

– 5

– 451

–7

–2

– 91

–1

Balance at 31 December 2013

1,209

2,269

Note 4.

– 926

7,198

Deutsche Post DHL 2013 Annual Report

139

Notes
Basis of preparation

Consolidated Financial Statements

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS OF
DEUTSCHE POST AG

BASIS OF PREPARATION

Deutsche Post DHL is a global mail and logistics group. The
Deutsche Post and DHL corporate brands represent a portfolio of
logistics (DHL) and communication (Deutsche Post) services. The
financial year of Deutsche Post AG and its consolidated subsidiaries
is the calendar year. Deutsche Post AG, whose registered office is in
Bonn, Germany, is entered in the commercial register of the Bonn
Local Court.

Basis of accounting

As a listed company, Deutsche Post AG prepared its consoli-
dated financial statements in accordance with the Inter national
Financial Reporting Standards (IFRS s), as adopted by the
European Union (EU), and the provisions of commercial law to
be additionally applied in accordance with section 315a (1) of the
Handelsgesetzbuch (HGB – German Commercial Code).

The requirements of the Standards applied have been satisfied
in full, and the consoli dated financial statements therefore provide
a true and fair view of the Group’s net assets, financial position and
results of operations.

The consolidated financial statements consist of the income
statement and the statement of comprehensive income, the balance
sheet, the cash flow statement, the statement of changes in equity
and the Notes. In order to improve the clarity of presentation, vari-
ous items in the balance sheet and in the income statement have
been combined. These items are disclosed and explained separately
in the Notes. The income statement has been classified in accord-
ance with the nature of expense method.

The accounting policies, as well as the explanations and dis-
closures in the Notes to the IFRS consolidated financial statements
for financial year 2013, are generally based on the same accounting
policies used in the 2012 consolidated financial statements. Excep-
tions to this are the changes in international financial reporting
Note 5 that have been required
under the IFRS s described in
to be applied by the Group since 1 January 2013. The accounting
policies are explained in

Note 7.

These consolidated financial statements were authorised for
issue by a resolution of the Board of Management of Deutsche
Post AG dated 20 February 2014.

The consolidated financial statements are prepared in euros
(€). Unless otherwise stated, all amounts are given in millions of
euros (€ million, € m).

Consolidated group

In addition to Deutsche Post AG, the consolidated financial
statements for the period ended 31 December 2013 include all Ger-
man and foreign companies in which Deutsche Post AG directly
or indirectly holds a majority of voting rights, or whose activities
it can control in some other way. The companies are consolidated
from the date on which the Group is able to exercise control.

The companies listed in the table below are consolidated in

addition to the parent company Deutsche Post AG.

Consolidated group

Number of fully consolidated companies
( subsidiaries)

German

Foreign

Number of proportionately consolidated joint
ventures

German

Foreign

Number of companies accounted for using
the equity method (associates)

German

Foreign

2012

2013

730

707

The complete list of the Group’s shareholdings in accordance
with section 313 (2) nos. 1 to 4 and section 313 (3) of the HGB can be
accessed on the website,

www.dpdhl.com/en/investors.html.

Acquisitions in 2013

In the period up to 31 December 2013, Deutsche Post DHL
acquired companies that did not materially affect the Group’s net
assets, financial position and results of operations, either individu-
ally or in the aggregate.

Acquisitions, 2013

Name

Country

Segment

Interest (%)

Date of
acquisition

Compador
Technologies
GmbH, Berlin

Germany

optivo GmbH, Berlin Germany

MAIL

15 January
2013

100

28 June 2013

RISER ID Services
GmbH, Berlin

Germany

MAIL

100

31 July 2013

140

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

In January 2013, Deutsche Post DHL acquired 49 % of the
shares of Compador Technologies GmbH, Berlin, which special-
ises in the development and manufacture of sorting machines and
software solutions covering the entire range of mail items pro-
cessed by mail service providers and companies. The company is
consolidated because of existing potential voting rights.

In addition, optivo GmbH, Berlin, was acquired in June 2013.
optivo provides technical e-mail marketing services in German-
speaking countries. The software and services offered by the com-
pany make it possible to reach out to existing customers by auto-
matically sending campaign e-mails.

At the end of July 2013, all of the shares of RISER ID
Services GmbH, Berlin, were acquired via a subsidiary in which
Deutsche Post DHL holds a 51 % interest. The company is a ser-
vice provider offering electronic address information from public
resident registers.

In financial year 2012, Deutsche Post DHL increased its
previous 33 % stake in All you need GmbH, Berlin, a mobile com-
merce supermarket, to 82 %. The step acquisition of the company
was carried out with a view to resale, since Deutsche Post DHL
intended to focus on taking over and enhancing the logistics infra-
structure. The company was therefore classified under assets held
for sale and liabilities associated with assets held for sale in accord-
ance with IFRS 5. In the third quarter of 2013, the Board of Manage-
ment announced that it no longer intended to resell the company.
Initial consolidation resulted in goodwill of €5 million. The com-
pany was accounted for in the third quarter of 2013. The income
statement presentation was not adjusted retrospectively due to the
immateriality of the amounts involved. Deutsche Post DHL’s stake
was further increased to 99.03 % (as at 31 December 2013) through
disproportionate capital increases during financial years 2012 and
2013. The additional shares acquired through the disproportion-
ate capital increases of €13 million led to a €1 million decline in
retained earnings.

Insignificant acquisitions, 2013

€ m

1 January to 31 December

assets

Non-current assets

Current assets

Cash and cash equivalents

eQuItY anD LIaBILItIes

Current liabilities and provisions

Net assets

Carrying
amount

Adjustment

Fair value

–

The calculation of goodwill is presented in the following table:

Goodwill, 2013

€ m

Contractual consideration

Fair value of existing equity interest

Cost

Less net assets

Less cost attributable to non-controlling interests

Difference

Plus non-controlling interests 1

Goodwill

1 Non-controlling interests are recognised at their carrying amount.

Fair value

Since their consolidation, the companies have contributed
€8 million to consolidated revenue and €–2 million to consoli-
dated EBIT. If the companies had already been acquired as at 1 Jan-
uary 2013, they would have contributed an additional €9 million to
consolidated revenue and €1 million to consolidated EBIT.

Transaction costs amounted to less than €1 million and are

reported in other operating expenses.

€34 million has so far been paid for the companies acquired
in financial year 2013 and €5 million was paid for companies
acquired in previous years. The purchase price for the companies
acquired was paid by transferring cash funds.

Deutsche Post DHL 2013 Annual Report

141

Notes
Basis of preparation

Consolidated Financial Statements

Contingent consideration

Variable purchase prices, which are presented in the follow-
ing table, were agreed for the acquisitions in financial year 2013
and previous financial years:

Contingent consideration

Basis

Revenue and gross income 1

EBITDA

Revenue and EBITDA 2

Revenue and sales margin

Period for financial years
from / to

2011 to 2013

2011 to 2012

2011 to 2013

2012 to 2014

Results range from

€0 to €2 million

unlimited

€0 to €3 million

€0 to €9 million

Fair value
of total obligation

Remaining
payment obligation
at 31 Dec. 2012

Remaining
payment obligation
at 31 Dec. 2013

€1 million

€3 million

€1 million

€2 million

€4 million

€0 million

€1 million

1 Both the range and the fair value changed due to amended agreements and earnings forecasts.
2 Change in the fair value of the total and remaining payment obligation due to differences between actual and estimated amounts.

Exel Saudia LLC, a joint venture that was previously propor-
tionately consolidated and in which Deutsche Post DHL continues
to hold 50 % of the shares, was fully consolidated because the
terms of the contract were amended. The change in consolidation
method resulted in goodwill of €6 million from the disposal of the
previous interest. The transaction resulted in a gain of €11 million,
which is reported in other operating income.

Deutsche Post DHL acquired 50 % of the shares of Luftfracht-
sicherheit-Service GmbH. The company is fully consolidated due
to the terms of the contract.

Insignificant acquisitions, 2012

€ m

1 January to 31 December

assets

Non-current assets

Current assets

Cash and cash equivalents

Assets held for sale

eQuItY anD LIaBILItIes

Non-current liabilities
and provisions

Current liabilities and provisions

Liabilities associated with assets
held for sale

Net assets

of which in accordance with IFRS 5

Carrying
amount

Adjustment

Fair value

–

Acquisitions in 2012

Name

Country

Segment

Interest (%)

Tag Belgium SA,
Brussels (formerly
Dentsu Brussels SA) Belgium

SUPPLY CHAIN

100

Date of
acquisition

1 February
2012

intelliAd Media
GmbH, Munich

2 Sisters Food
Group (2SFG),
Heathrow

Germany

MAIL

100

9 July 2012

SUPPLY CHAIN

Asset deal

27 July 2012

All you need GmbH,
Berlin

Germany

MAIL

Exel Saudia LLC,
Al Khobar

Saudi Arabia

SUPPLY CHAIN

Luftfrachtsicher-
heit-Service GmbH,
Frankfurt am Main Germany

GLOBAL
FORWARDING,
FREIGHT

24 October
2012 1, 2

Terms of
the contract
amended

16 October
2012 2

27 August
2012

1 Acquired in 2012 with a view to resale (IFRS 5)

For the current presentation in 2013

2 Step acquisition.

Note 37.
Note 2, acquisitions in 2013.

InsIGnIFICant aCQuIsItIons In 2012

In the period up to 31 December 2012, Deutsche Post DHL
acquired companies that did not materially affect the Group’s net
assets, financial position and results of operations, either indivi du-
ally or in the aggregate.

Tag Belgium SA is active in the communications sector and
specialises in the design, production and localisation of print
media. intelliAd Media GmbH is a bid-management technology
supplier active in the area of search engine advertising.
2 SFG is active in the field of airline catering.
Deutsche Post DHL increased its previous 33 % stake in All
you need GmbH, a mobile commerce supermarket, to 82 %. The
stake was further increased to 90.25 % through a disproportionate
capital increase. The shares were acquired with a view to resale,
since Deutsche Post DHL would like to focus on taking over
and enhancing the logistics infrastructure. See disclosures under
Acquisitions in 2013 for details of further developments and the
presentation in financial year 2013.

142

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

The calculation of goodwill is presented in the following table:

suppLY CHaIn seGMent

Goodwill, 2012

€ m

Contractual consideration

Fair value of the existing equity interest 1

Total cost

Less net assets

Difference

Less goodwill in accordance with IFRS 5

Plus negative goodwill

Plus non-controlling interests 2

Less goodwill arising from the change in consolidation method

Goodwill

Fair value

1 Gain from the change in the method of consolidation is recognised under other operating

income.

2 Non-controlling interests are recognised at their carrying amount.

Purchase price allocation for Tag Belgium SA and Luftfracht-
sicherheit-Service GmbH resulted in negative goodwill of €2 mil-
lion, which is reported in other operating income. The negative
goodwill is attributable to the coverage of potential business risks.
The companies have contributed €16 million to consolidated
revenue and €0 million to consolidated EBIT since the date of
initial consolidation (amounts for 2012). If these companies had
been purchased at 1 January 2012, they would have added €25 mil-
lion to consolidated revenue and €2 million to consolidated EBIT.

The transaction costs for the insignificant acquisitions
amounted to less than €1 million and are reported in other oper-
ating expenses.

€24 million was paid for the companies acquired in financial
year 2012. €38 million was paid for companies acquired in previous
years. The purchase price for the companies acquired was paid by
transferring cash funds.

Disposal and deconsolidation effects in 2013

Gains are shown under other operating income; losses are

reported under other operating expenses.

Deutsche Post DHL completed the sale of the fashion logis-
tics business of DHL Fashion (France) SAS, France, in April 2013.
The assets and liabilities of the business concerned were reclassified
as held for sale in financial year 2012 in accordance with IFRS 5.
The most recent measurement of the assets prior to their reclassifi-
cation resulted in an impairment loss of €1 million in 2012, which
was reported in depreciation, amortisation and impairment losses.
In addition, ITG GmbH Internationale Spedition und Logis-
tik, Germany, was sold together with its subsidiaries in June 2013.
The companies’ assets and liabilities were reclassified as held for
sale in the first quarter of 2013 in accordance with IFRS 5. The most
recent measurement of the assets prior to their reclassification did
not indicate any impairment.

The sale of US company Exel Direct Inc. including its Can-
adian branch was completed in May 2013. The company’s assets
and liabilities had been reclassified as held for sale in the first quar-
ter of 2013 in accordance with IFRS 5. The most recent measure-
ment of the assets prior to their reclassification did not indicate
any impairment.

US warehousing specialist Llano Logistics Inc. was sold and
deconsolidated in May 2013. Since all of the amounts involved
were lower than €1 million, they are not shown in the table below.

eXpress seGMent

The sale of the Romanian domestic express business of
Cargus International S. R. L. was completed in the first quarter of
2013. As at 31 December 2012, the assets and liabilities of the busi-
ness concerned were reclassified as held for sale in accordance with
IFRS 5. The most recent measurement of the assets prior to their
reclassification did not indicate any impairment.

The sale of the Domestic Same Day business of DHL Express
UK Limited, UK, closed at the end of October 2013. The relevant
assets and liabilities had previously been reclassified as held for sale
in accordance with IFRS 5. The most recent measurement of the
assets and liabilities prior to their reclassification did not indicate
any impairment.

Disposal and deconsolidation effects, 2013

€ m

1 January to 31 December

Non-current assets

Current assets

Cash and cash equivalents

assets

Current provisions and liabilities

eQuItY anD LIaBILItIes

Net assets

Total consideration received

Losses from the currency translation reserve

Deconsolidation gain (+) / loss (–)

Deutsche Post DHL 2013 Annual Report

Cargus
International

DHL Fashion
(France)

ITG GROUP

Exel Direct DHL Express UK

–23

–2

Total

116

–2

143

Notes
Basis of preparation

Consolidated Financial Statements

Disposal and deconsolidation effects in 2012

eXpress seGMent

GLoBaL ForWarDInG, FreIGHt seGMent

The sales of the Express Couriers Limited (ECL), New Zealand,
and Parcel Direct Group Pty Limited (PDG), Australia, joint ven-
tures closed at the end of June 2012. The buyer was the former joint
venture partner, New Zealand Post.

DHL Global Forwarding & Co. LLC (DHL Oman), Oman, was
deconsolidated in the first quarter of 2012, as the reasons for con-
solidation no longer existed. The company has been accounted for
using the equity method since February 2012.

Disposal and deconsolidation effects, 2012

€ m

1 January to 31 December

Non-current assets

Current assets

Assets held for sale 1

Cash and cash equivalents

assets

Non-current liabilities and provisions

Current liabilities and provisions

Liabilities associated with assets held for sale 1

eQuItY anD LIaBILItIes

Net assets

Total consideration received

Losses (–) from the currency translation reserve

Non-controlling interests

Deconsolidation gain (+)

1 Data before deconsolidation.
2 Fair value of existing investment.

DHL Oman

ECL, PDG

Total

1 2

– 4

Gains are shown under other operating income; losses are

reported under other operating expenses.

Additional information on the size of the shareholdings can
be found in the list of shareholdings, which can be accessed on the
website,

www.dpdhl.com/en/investors.html.

Joint ventures

The following table provides information about the balance

sheet and income statement items attributable to joint ventures:

Significant transactions

Issuance of bonds

At 31 December

€ m

BaLanCe sHeet

Intangible assets

Property, plant and equipment

Receivables and other assets

Cash and cash equivalents

Trade payables, other liabilities

Provisions

Financial liabilities

InCoMe stateMent

Revenue 2

Profit from operating activities (EBIT)

1 Proportionate single-entity financial statement data.
2 Revenue excluding intra-group revenue.

2012 1

2013 1

120

118

The consolidated joint ventures are AeroLogic GmbH,
Germany, EV Logistics, Canada, Bahwan Exel LLC, Oman, and
Danzas DV LCC, Russia.

Deutsche Post DHL took advantage of favourable market
conditions to place two conventional bonds amounting to €1 bil-
lion with national and international investors. The issue date was
9 October 2013. The capital raised will be used to repay a ten-year
bond maturing in January 2014. The first issue in the amount of
€500 million has a maturity of five years and an annual coupon of
1.5 %. The second €500 million issue has a maturity of ten years and
Note 46.
an annual coupon of 2.75 %;

At the end of September 2013, the five-year credit facility
with a total volume of €2 billion taken out with a consortium of
national and international banks in 2010 was renewed early until
2018 at more favourable terms. In addition, two one-year extension
options were also agreed.

Income from changes to retirement plans

The defined benefit retirement plans in the UK were changed
to defined contribution plans in the fourth quarter of 2013. This
generated income of €55 million, which is recognised in staff costs.
Further details can be found in

Note 44.

144

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Adjustment of prior-period amounts

aDjustMent 2

The following adjustments were made for financial year 2012:

aDjustMent 1

To improve transparency, the receivables and other current
assets item in the balance sheet was divided into the trade receiv-
ables and the other current assets balance sheet items. The presen-
tation on the assets side thus reflects that on the liabilities side.The
capital reserves contained in the other reserves item are now pre-
sented separately in the balance sheet. Total assets were not affected.
The prior-year amounts were adjusted accordingly.

Reflecting the amendment of IAS 19, provisions for pen-
sions and similar obligations increased by €2,774 million as at
31 Decem ber 2012 (as at 1 January 2012: by €1,610 million) and
provisions for obligations arising from partial retire ment arrange-
ments declined by €29 million (as at 1 January 2012: by €57 mil-
lion). Retained earnings were red uced by €2,925 million (as at
1 January 2012: by €1,720 million) at the same time. The currency
trans lation reserve included in other reserves fell by €7 million.
Due to the adjust ment of pension assets, other non-current assets
decreased by €335 million (as at 1 January 2012: by €290 million).
Deferred tax assets increased by €71 million (as at 1 January 2012:
by €53 million), and deferred tax liabilities declined by €73 million
(as at 1 January 2012: by €69 million). The low positive effect on
taxes overall (€144 million, as at 1 January 2012: €122 million) is
largely due to the fact that not all deferred tax assets may be recog-
nised in Germany;

Note 30.

Staff costs for financial year 2012 remained unchanged, as the
effects relating to net pension provisions and provisions for par-
tial retirement arrangements offset each other. However, net other
finance costs narrowed by €29 million.

Balance sheet adjustments at 1 January 2012 and 31 December 2012

€ m

assets

Other non-current assets

Deferred tax assets

Receivables and other current assets

Trade receivables

Other current assets

eQuItY anD LIaBILItIes

Capital reserves

Other reserves

Retained earnings

Equity attributable to Deutsche Post AG shareholders

Non-controlling interests

Provisions for pensions and similar obligations

Deferred tax liabilities

Other non-current provisions

Adjustment
no.

1 Jan. 2012

Adjustment

1 Jan. 2012
adjusted

31 Dec. 2012

Adjustment

31 Dec. 2012
adjusted

1, 2

570

1,153

9,089

–

1,714

8,086

11,009

190

4,445

255

2,174

–290

– 9,089

6,934

2,155

2,170

–2,170

–1,720

–1

1,610

– 69

– 57

280

1,206

6,934

2,155

2,170

– 456

6,366

9,289

189

6,055

186

2,117

633

1,257

9,112

–

1,786

8,956

11,951

213

2,442

229

1,972

–335

– 9,112

6,959

2,153

2,254

–2,261

–2,925

–2,932

– 4

2,774

–73

–29

298

1,328

6,959

2,153

2,254

– 475

6,031

9,019

209

5,216

156

1,943

Income statement for the period 1 January 2012 to 31 December 2012

€ m

Net other finance costs

Profit before income taxes

Income taxes

Consolidated net profit for the period

attributable to Deutsche Post AG
shareholders

Basic earnings per share (€)

Diluted earnings per share (€)

2012

Adjustment

2012
adjusted

– 429

2,238

– 458

1,780

1,658

1.37

1.32

–29

–18

– 0.01

– 0.02

– 458

2,209

– 447

1,762

1,640

1.36

1.30

Deutsche Post DHL 2013 Annual Report

145

Notes
Basis of preparation

Consolidated Financial Statements

Statement of comprehensive income for the period 1 January 2012 to 31 December 2012

€ m

Consolidated net profit for the period

Items that will not be reclassified to profit or loss

Change due to remeasurements of net pension provisions

Income taxes relating to components of other comprehensive income

Items that may be subsequently reclassified to profit or loss

Currency translation reserve (changes from unrealised gains and losses)

Other comprehensive income (after tax)

Total comprehensive income

attributable to Deutsche Post AG shareholders

attributable to non-controlling interests

New developments in international accounting under IFrs s

The following Standards, changes to Standards and Inter-

pretations are required to be applied on or after 1 January 2013:

Effective for
financial years
beginning
on or after Subject matter and significance

2012

Adjustment

1,780

–18

2012
adjusted

1,762

–10

1,770

1,650

120

–1,198

–7

–1,197

–1,215

–1,207

555

435

120

Amendments to IAS 1
(Presentation of Financial
Statements: Presentation
of Items of Other Comprehen-
sive Income)

Amendments to IAS 19
( Employee Benefits)

Amendments to IAS 12
(Income Taxes: Deferred
Tax – Recovery of Under-
lying Assets)

Amendments to IFRS 7
( Financial Instruments:
Disclosures – Offsetting
Financial Assets and
Financial Liabilities)

IFRS 13 (Fair Value
Measurement)

1 January 2013

Entities must classify items presented in other comprehensive income by whether they will not or may be subsequently
reclassified to profit or loss (recycled). The presentation has been adjusted;
There were no other effects.

statement of comprehensive income.

1 January 2013

These amendments significantly affect the recognition and measurement of the cost of defined benefit retirement plans
and termination benefits. The corresponding effects on the balance sheet as well as certain changes to the disclosure
requirements must also be reflected. With regard to defined benefit plans, the immediate recognition of actuarial gains and
losses in other comprehensive income (retained earnings), and the use of a uniform discount rate for provisions for pensions
and similar obligations, are of particular significance. The more detailed requirements on the recognition of administration
costs are also relevant. Furthermore, the classification of partial retirement obligations has changed. For more details on the
adjustments,
Pro forma disclosures: If the amendments had not been applied in financial year 2013, EBIT would have decreased by
around €115 million and net other finance costs would have improved by €50 million. Provisions for pensions and similar
obligations would have seen a decrease of around €2,740 million, concurrent with the immediate rise in retained earnings
of around €3,150 million, whilst pension assets and the provisions for obligations from partial retirement arrangements
would have risen by around €320 million and around €10 million, respectively. Applying the tax rate for the current financial
year, income taxes would have declined by around €9 million. Basic earnings per share would have been around €1.68 and
diluted earnings per share around €1.62.

Note 4.

1 January 2013

The amendment introduces a mandatory rebuttable presumption in respect of the treatment of temporary taxable
differences for investment property for which the fair value model is applied in accordance with IAS 40. The change had
no effect on the consolidated financial statements.

1 January 2013

The amendment to IAS 32 relating to the presentation of the offsetting of financial assets and liabilities and the associated
additions to IFRS 7 require comprehensive disclosure of the rights of set-off, especially for those rights that do not result
in offsetting under IFRS s. The change has led to additional disclosures in the Notes;

Note 50.

1 January 2013

This sets out uniform, overarching requirements for the measurement of fair value. It requires a specific presentation
of the techniques used to determine fair value. The application of the new standard results in additional disclosure
requirements;

Notes 26, 37 and 50.

Annual Improvements
to IFRS s 2009 – 2011 Cycle

1 January 2013

The Annual Improvements to IFRS s 2009 – 2011 Cycle were adopted by the EU in March 2013. The annual improvement
process refers to the following standards: IFRS 1 (First-Time Adoption of International Financial Reporting Standards),
IAS 1 (Presentation of Financial Statements), IAS 16 (Property, Plant and Equipment), IAS 32 (Financial Instruments:
Presentation) and IAS 34 (Interim Financial Reporting). The amendments do not affect the presentation of the financial
statements.

The following are not relevant for the consolidated financial statements:
Amendments to IFRS 1 (Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters),
IFRIC 20 (Stripping Costs in the Production Phase of a Surface Mine),
Amendments to IFRS 1 (First-Time Adoption of International Financial Reporting Standards: Government Loans).

146

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

New accounting pronouncements adopted by the eu
but only required to be applied in future periods

The following Standards, changes to Standards and Inter-
pretations have already been endorsed by the EU. However, they
will only be required to be applied in future periods.

Standard
(Issue date)

Amendments to IAS 32
( Financial Instruments:
Presentation – Offset-
ting Financial Assets
and Financial Liabilities)
(16 December 2011)

IFRS 10 (Consolidated
Financial Statements)
(12 May 2011)

1 January 2014 1

IFRS 11 (Joint Arrangements)
(12 May 2011)

1 January 2014 1

Effective for
financial years
beginning
on or after Subject matter and significance

1 January 2014

These provide clarification on the conditions for offsetting financial assets and liabilities in the balance sheet. A right
of set-off must be legally enforceable for all counterparties, both in the normal course of business and also in the event
of insolvency, and it must exist at the balance sheet date. The Standard specifies which gross settlement systems can
be regarded as net settlement for this purpose. The amendment will not have any significant effect on the presentation
of the financial statements. In individual cases, additional disclosures may be required.

This introduces a uniform definition of control for all entities that are to be included in the consolidated financial statements.
The standard also contains comprehensive requirements on determining a relationship where control exists. IFRS 10 super-
sedes IAS 27 (Consolidated and Separate Financial Statements) as well as SIC-12 (Consolidation – Special Purpose Entities).
Special purpose entities previously consolidated in accordance with SIC-12 are now subject to IFRS 10. The reclassification
resulting from the change in the consolidation method when IFRS 10 enters into force in financial year 2014 will result in
changes which will, however, have no significance for the financial statements.
Pro forma disclosure: If the standard had already been applied in financial year 2013, revenue would have declined by
around €63 million and EBIT by €1 million. Consolidated net profit for the period would have decreased by €1 million.

IFRS 11 supersedes IAS 31 (Interests in Joint Ventures). The option to proportionately consolidate joint ventures will be
abolished. However, IFRS 11 will not require all entities that are currently subject to proportionate consolidation to be
accounted for using the equity method in the future. IFRS 11 provides a uniform definition of the term “joint arrangements”
and distinguishes between joint operations and joint ventures. The interest in a joint operation is recognised on the basis
of direct rights and obligations, whereas the interest in the profit or loss of a joint venture must be accounted for using
the equity method. The mandatory application of the equity method to joint ventures will in future follow the require-
ments of the revised IAS 28 (Investments in Associates and Ventures). In future, due to the aforementioned requirements,
AeroLogic GmbH, Germany, and EV Logistics, Canada, may no longer be accounted for using the equity method, but will
be classified as joint operations and consolidated on a proportionate basis in accordance with the contractual provisions.
The entry into force of IFRS 11 in financial year 2014 will thus result in changes in the consolidated financial statements
which will, however, have no significant influence.
Pro forma disclosure: If the standard had already been applied in financial year 2013, revenue would have declined by around
€103 million, the change in EBIT would have been less than €1 million, net finance costs would have decreased by €1 million
and income taxes would have risen by €1 million. There would have been no change to consolidated net profit for the period.

IFRS 12 (Disclosures of
Interests in Other Entities)
(12 May 2011)

Amendments to IFRS 10,
IFRS 11, IFRS 12: Transitional
Provisions
(28 June 2012)

IAS 27 (Separate Financial
Statements) (revised 2011)
(12 May 2011)

IAS 28 (Investments in
Associates and Joint
Ventures) (revised 2011)
(12 May 2011)

Amendments to IAS 36
( Impairment of Assets –
Recoverable Amount
Disclosures for Non-
financial Assets)
(29 May 2013)

1 January 2014 1

This combines the disclosure requirements for all interests in subsidiaries, joint ventures, associates and unconsolidated
structured entities into a single standard. An entity is required to provide quantitative and qualitative disclosures about
the types of risks and financial effects associated with the entity’s interests in other entities. IFRS 12 results in increased
disclosure requirements.

1 January 2014 1

The amendments relate to the transitional provisions in respect of the first-time application of the standards. They must
be applied in line with the effective dates for IFRS 10, IFRS 11 and IFRS 12.

1 January 2014 1

The existing standard IAS 27 (Consolidated and Separate Financial Statements) was revised in conjunction with the new
standards IFRS 10, IFRS 11 and IFRS 12 and renamed IAS 27 (Separate Financial Statements) (revised 2011). The revised standard
now only contains requirements applicable to separate financial statements. The amendment will not affect the financial
statements.

1 January 2014 1

The existing standard IAS 28 (Investments in Associates) was revised in conjunction with the new standards IFRS 10, IFRS 11
and IFRS 12 and renamed IAS 28 (Investments in Associates and Joint Ventures) (revised 2011). Its scope is being extended
to include accounting for joint ventures using the equity method. The previous requirements of SIC-13 (Jointly Controlled
Entities – Non-Monetary Contributions by Venturers) are being incorporated into IAS 28. The change will have no significant
influence on the financial statements.

1 January 2014

These amendments clarify that disclosures regarding the recoverable amount of non-financial assets determined based
on fair value less costs of disposal are only required if an impairment loss has been recognised or reversed in the current
reporting period. In addition, the disclosures required when the recoverable amount is determined based on fair value
less costs of disposal have been amended. The amendments are retrospectively applicable for financial years starting on
or after 1 January 2014; early application is permitted as IFRS 13 is already being applied. The Standard was applied early.

The following are not relevant for the consolidated financial statements:
Amendments to IFRS 10, IFRS 12 and IAS 27 (Investment Entities) issued on 31 October 2012, effective for financial years beginning on or after 1 January 2014.

1 These standards were adopted into European law with a different effective date than the original standards.

Deutsche Post DHL 2013 Annual Report

147

Notes
Basis of preparation

Standard
(Issue date)

Amendments to IAS 39
(Novation of Derivatives
and Continuation of
Hedge Accounting)
(27 June 2013)

Consolidated Financial Statements

Effective for
financial years
beginning
on or after Subject matter and significance

1 January 2014

Under this amendment, subject to certain conditions, novation of a hedging instrument to a central counterparty as a
consequence of laws or regulations does not give rise to termination of a hedging relationship. The amendments are
retrospectively applicable for financial years starting on or after 1 January 2014; early application is permitted. The Group
does not currently consider that these amendments will have a significant effect on the presentation of the financial
statements.

1 These standards were adopted into European law with a different effective date than the original standards.

New accounting requirements not yet adopted by the eu
(endorsement procedure)

The IASB and the IFRIC issued further Standards, amend-
ments to Standards and Interpretations in financial year 2013 and
in previous years whose application is not yet mandatory for finan-
cial year 2013. The application of these IFRS s is dependent on their
adoption by the EU.

Effective for
financial years
beginning
on or after Subject matter and significance

1 January 2018

Standard
(Issue date)

IFRS 9 (Financial Instruments)
(12 November 2009), amend-
ments to IFRS 9 and IFRS 7
(Mandatory Effective Date
and Transition Disclosures)
(16 December 2011), amend-
ments to IFRS 9, IFRS 7 and
IAS 39 (Hedge Accounting)
(19 November 2013) and effec-
tive date (20 February 2014)

IFRIC 21 (Levies)
(20 May 2013)

1 January 2014

IFRS 9 was published in 2009 as part of the project to replace IAS 39 (Financial Instruments: Recognition and Measurement).
The new Standard changes the previous requirements applicable for the classification and measurement of financial assets.
In 2010, the Standard was extended to include the classification and measurement of financial liabilities. The amendments
to IFRS 9 and IFRS 7 published in December 2011 deferred the mandatory effective date to 1 January 2015. The transition
requirements were also specified in further detail. The disclosure requirements under IFRS 9 were added as an amendment
to IFRS 7. The additional disclosure requirements should make it possible to assess the effect of initial application of IFRS 9
on the recognition and measurement of financial instruments. In November 2013, the IASB issued a new version of the
standard on hedge accounting as part of the third phase of the project to replace IAS 39 by IFRS 9. The mandatory effective
date of IFRS 9 was set at 1 January 2018 in February 2014. The date on which the Standard will be adopted by the EU has not
yet been announced. The Group is assessing the effects of initial application of the Standard if it were to be adopted by the
EU in its current form.

This Interpretation provides guidance on when to recognise a liability for a levy imposed by a government. It covers the
recognition of levies imposed in accordance with laws or regulations. It does not include taxes, fines and other outflows
that fall within the scope of other standards. The Group is currently reviewing the effects of this Interpretation on the
consolidated financial statements.

Amendments to IAS 19
(Employee Benefits –
Defined Benefit Plans:
Employee Contributions)
(21 November 2013)

Annual Improvements
to IFRS s 2010 – 2012 Cycle
(12 December 2013)

Annual Improvements
to IFRS s 2011 – 2013 Cycle
(12 December 2013)

1 July 2014

The amendments apply to the recognition of employee contributions to defined benefit retirement plans. Their objective
is to simplify accounting for employee contributions that are independent of the number of years of service. In such cases,
the service cost in the period in which the corresponding service is rendered may be reduced. The new requirements must
be applied retrospectively. Application will not lead to any significant effects.

1 July 2014

The annual improvement process refers to the following standards: IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 38, IAS 24.
Application of the new requirements is mandatory for reporting periods beginning on or after 1 July 2014. The amendments
will not have a significant influence on the consolidated financial statements.

1 July 2014

The annual improvement process refers to the following standards: IFRS 1, IFRS 3, IFRS 13, IAS 40. Application of the
new requirements is mandatory for reporting periods beginning on or after 1 July 2014. The amendments will not have
a significant influence on the consolidated financial statements.

The following are not relevant for the consolidated financial statements:
IFRS 14 (Regulatory Deferral Accounts) issued on 31 January 2014, effective for financial years beginning on or after 1 January 2016.

148

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Currency translation

The financial statements of consolidated companies prepared
in foreign currencies are translated into euros (€) in accordance
with IAS 21 using the functional currency method. The functional
currency of foreign companies is determined by the primary eco-
nomic environment in which they mainly generate and use cash.
Within the Group, the functional currency is predominantly the
local currency. In the consolidated financial statements, assets and
liabilities are therefore translated at the closing rates, whilst periodic
income and expenses are generally translated at the monthly clos-
ing rates. The resulting currency translation differences are recog-
nised in other comprehensive income. In financial year 2013, cur-
rency translation differences amounting to €–451 million (previous
year, adjusted: €49 million) were recognised in other comprehen-
sive income (see the statement of comprehensive income and state-
ment of changes in equity).

Goodwill arising from business combinations after 1 January
2005 is treated as an asset of the acquired company and therefore
carried in the functional currency of the acquired company.

Accounting policies

Uniform accounting policies are applied to the annual finan-
cial statements of the entities that have been included in the consoli-
dated financial statements. The consolidated financial statements
are prepared under the historical cost convention, except where
items are required to be recognised at their fair value.

Revenue and expense recognition

Deutsche Post DHL’s normal business operations consist of
the provision of logistics services. All income relating to normal
business operations is recognised as revenue in the income state-
ment. All other income is reported as other operating income.
Revenue and other operating income is generally recognised when
services are rendered, the amount of revenue and income can be
reliably measured and, in all probability, the economic benefits
from the transactions will flow to the Group. Operating expenses
are recognised in income when the service is utilised or when the
expenses are incurred.

The exchange rates for the currencies that are significant for

Intangible assets

Intangible assets are measured at amortised cost. Intangible
assets comprise internally generated and purchased intangible
assets and purchased goodwill.

Internally generated intangible assets are capitalised at cost
if it is probable that their production will generate an inflow of
future economic benefits and the costs can be reliably measured.
In the Group, this concerns internally developed software. If the
criteria for capitalisation are not met, the expenses are recognised
immediately in income in the year in which they are incurred. In
addition to direct costs, the production cost of internally devel-
oped software includes an appropriate share of allocable produc-
tion overhead costs. Any borrowing costs incurred for qualifying
assets are included in the production cost. Value added tax arising
in conjunction with the acquisition or production of intangible
assets is included in the cost if it cannot be deducted as input tax.
Capitalised software is amortised over its useful life.

Intangible assets are amortised using the straight-line
method over their useful lives. Impairment losses are recognised
in accordance with the principles described in the section headed
Impairment. The useful lives of significant intangible assets are pre-
sented in the table below.

the Group were as follows:

Closing rates

Average rates

2012
EUR 1 =

2013
EUR 1 =

2012
EUR 1 =

2013
EUR 1 =

1.2719

8.2180

0.8156

1.5408

8.3411

0.8332

1.2445

8.1458

0.8116

1.3769

8.1670

0.8492

113.6625

144.607

103.4778

129.6521

Country

Australia

China

Japan

Sweden

Switzerland

USA

8.5912

1.2075

1.3191

8.8682

1.2269

1.3778

8.6853

1.2043

1.2928

8.6511

1.2308

1.3284

Currency

AUD

CNY

GBP

JPY

SEK

CHF

USD

The carrying amounts of non-monetary assets recognised at
consolidated companies operating in hyperinflationary economies
are generally indexed in accordance with IAS 29 and thus reflect
the current purchasing power at the balance sheet date.

In accordance with IAS 21, receivables and liabilities in the
financial statements of consolidated companies that have been
prepared in local currencies are translated at the closing rate as
at the balance sheet date. Currency translation differences are
recognised in other operating income and expenses in the income
statement. In financial year 2013, income of €155 million ( previous
year: €178 million) and expenses of €156 million (previous year:
€181 million) resulted from currency translation differences. In
contrast, currency translation differences relating to net invest-
ments in a foreign operation are recognised in other comprehen-
sive income.

Deutsche Post DHL 2013 Annual Report

149

Notes
Basis of preparation

Consolidated Financial Statements

Useful lives

Impairment

Internally developed software

Purchased software

Licences

Customer relationships

Years 1

up to 5

term of agreement

up to 20

1 The useful lives indicated represent maximum amounts specified by the Group. The actual
useful lives may be shorter due to contractual arrangements or other specific factors such
as time and location.

Intangible assets that are not affected by legal, economic, con-
tractual, or other factors that might restrict their useful lives are
considered to have indefinite useful lives. They are not amortised
but are tested for impairment annually or whenever there are in-
dications of impairment. They generally include brand names from
business combinations, for example. Impairment testing is carried
out in accordance with the principles described in the section
headed Impairment.

Property, plant and equipment

Property, plant and equipment is carried at cost, reduced by
accumulated depreciation and valuation allowances. In addition
to direct costs, production cost includes an appropriate share of
allocable production overhead costs. Borrowing costs that can be
allocated directly to the purchase, construction or manufacture
of property, plant and equipment are capitalised. Value added tax
arising in conjunction with the acquisition or production of items
of property, plant or equipment is included in the cost if it can-
not be deducted as input tax. Depreciation is charged using the
straight-line method. The estimated useful lives applied to the
major asset classes are presented in the table below:

Useful lives

Buildings

Technical equipment and machinery

Aircraft

IT systems

Transport equipment and vehicle fleet

Other operating and office equipment

Years 1

20 to 50

10 to 20

15 to 20

4 to 5

4 to 18

8 to 10

1 The useful lives indicated represent amounts specified by the Group. The actual useful lives
may be shorter due to contractual arrangements or other specific factors such as time and
location.

If there are indications of impairment, an impairment test

must be carried out; see the section headed Impairment.

At each balance sheet date, the carrying amounts of intan gible
assets, property, plant and equipment and investment property
are reviewed for indications of impairment. If there are any such
indications, an impairment test must be carried out. This is done
by determining the recoverable amount of the relevant asset and
comparing it with the carrying amount.

In accordance with IAS 36, the recoverable amount is the
asset’s fair value less costs to sell or its value in use, whichever is
higher. The value in use is the present value of the pre-tax free cash
flows expected to be derived from the asset in future. The discount
rate used is a pre-tax rate of interest reflecting current market
conditions. If the recoverable amount cannot be determined for
an individual asset, the recoverable amount is determined for the
smallest identifiable group of assets to which the asset in question
can be allocated and which generates independent cash flows (cash
generating unit – CGU). If the recoverable amount of an asset is
lower than its carrying amount, an impairment loss is recognised
immediately in respect of the asset. If, after an impairment loss has
been recognised, a higher recoverable amount is determined for
the asset or the CGU at a later date, the impairment loss is reversed
up to a carrying amount that does not exceed the recoverable
amount. The increased carrying amount attributable to the rever-
sal of the impairment loss is limited to the carrying amount that
would have been determined (net of amortisation or depreciation)
if no impairment loss had been recognised in the past. The rever-
sal of the impairment loss is recognised in the income statement.
Impairment losses recognised in respect of goodwill may not be
reversed.

Since January 2005, goodwill has been accounted for using
the impairment-only approach in accordance with IFRS 3. This
stipulates that goodwill must be subsequently measured at cost,
less any cumulative adjustments from impairment losses. Pur-
chased goodwill is therefore no longer amortised and instead is
tested for impairment annually in accordance with IAS 36, regard-
less of whether any indication of possible impairment exists, as in
the case of intangible assets with an indefinite useful life. In addi-
tion, the obligation remains to conduct an impairment test if there
is any indication of impairment. Goodwill resulting from company
acquisitions is allocated to the identifiable groups of assets (CGU s
or groups of CGU s) that are expected to benefit from the synergies
of the acquisition. These groups represent the lowest reporting level
at which the goodwill is monitored for internal management pur-
poses. The carrying amount of a CGU to which goodwill has been
allocated is tested for impairment annually and whenever there is
an indication that the unit may be impaired. Where impairment
losses are recognised in connection with a CGU to which goodwill
has been allocated, the existing carrying amount of the goodwill
is reduced first. If the amount of the impairment loss exceeds the
carrying amount of the goodwill, the difference is allocated to the
remaining non-current assets in the CGU.

150

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Finance leases

Fair value option

Under the fair value option, financial assets or financial
liabilities may be measured at fair value through profit or loss
on initial recognition if this eliminates or significantly reduces a
measurement or recognition inconsistency (accounting mismatch).
The Group makes use of the option in order to avoid accounting
mismatches.

Financial assets

Financial assets are accounted for in accordance with the
provisions of IAS 39, which distinguishes between four categories
of financial instruments.

avaILaBLe-For-saLe FInanCIaL assets

These financial instruments are non-derivative financial
assets and are carried at their fair value, where this can be meas-
ured reliably. If a fair value cannot be determined, they are carried
at cost. Changes in fair value between reporting dates are generally
recognised in other comprehensive income (revaluation reserve).
The reserve is reversed to income either upon disposal or if the fair
value falls below cost more than temporarily. If, at a subsequent
balance sheet date, the fair value of a debt instrument has increased
objectively as a result of events occurring after the impairment loss
was recognised, the impairment loss is reversed in the appropriate
amount. Impairment losses recognised in respect of equity instru-
ments may not be reversed to income. If equity instruments are
recognised at fair value, any reversals must be recognised in other
comprehensive income. No reversals may be made in the case of
equity instruments that were recognised at cost. Available-for-sale
financial instruments are allocated to non-current assets unless
the intention is to dispose of them within 12 months of the bal-
ance sheet date. In particular, investments in unconsolidated sub-
sidiaries, marketable securities and other equity investments are
reported in this category.

HeLD-to-MaturItY FInanCIaL assets

Financial instruments are assigned to this category if there is
an intention to hold the instrument to maturity and the economic
conditions for doing so are met. These financial instruments are
non-derivative financial assets that are measured at amortised cost
using the effective interest method.

A lease financing transaction is an agreement in which the
lessor conveys to the lessee the right to use an asset for a speci-
fied period in return for a payment or a number of payments. In
accordance with IAS 17, beneficial ownership of leased assets is
attributed to the lessee if the lessee substantially bears all risks and
rewards incident to ownership of the leased asset. To the extent
that beneficial ownership is attributable to the Group as the lessee,
the asset is capitalised at the date on which use starts, either at fair
value or at the present value of the minimum lease payments if this
is less than the fair value. A lease liability in the same amount is
recognised under non-current liabilities. The lease is subsequently
measured at amortised cost using the effective interest method.
The depreciation methods and estimated useful lives correspond to
those of comparable purchased assets.

Operating leases

For operating leases, the Group reports the leased asset at
amortised cost as an asset under property, plant and equipment
where it is the lessor. The lease payments recognised in the period
are shown under other operating income. Where the Group is the
lessee, the lease payments made are recognised as lease expense
under materials expense. Lease expenses and income are recog-
nised using the straight-line method.

Investments in associates

Investments in associates are accounted for using the equity
method in accordance with IAS 28 (Investments in Associates).
Based on the cost of acquisition at the time of purchase of the
invest ments, the carrying amount of the investment is increased
or reduced annually to reflect the share of earnings, dividends dis-
tributed and other changes in the equity of the associates attrib-
utable to the investments of Deutsche Post AG or its consolidated
subsidiaries. The goodwill contained in the carrying amounts of
the invest ments is accounted for in accordance with IFRS 3. Invest-
ments in companies accounted for using the equity method are im-
paired if the recoverable amount falls below the carrying amount.

Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or equity
instru ment of another entity. Financial assets include in particular
cash and cash equivalents, trade receivables, originated loans and
receivables, and derivative financial assets held for trading. Finan-
cial liabilities include contractual obligations to deliver cash or
another financial asset to another entity. These mainly comprise
trade payables, liabilities to banks, liabilities arising from bonds
and finance leases, and derivative financial liabilities.

Deutsche Post DHL 2013 Annual Report

151

Notes
Basis of preparation

Consolidated Financial Statements

Loans anD reCeIvaBLes

These are non-derivative financial assets with fixed or deter-
minable payments that are not quoted on an active market. Unless
held for trading, they are recognised at cost or amortised cost at
the balance sheet date. The carrying amounts of money market
receivables correspond approximately to their fair values due to
their short maturity. Loans and receivables are considered current
assets if they mature not more than 12 months after the balance
sheet date; otherwise, they are recognised as non-current assets. If
the recoverability of receivables is in doubt, they are recognised
at amortised cost, less appropriate specific or collective valuation
allowances. A write-down on trade receivables is recognised if
there are objective indications that the amount of the outstanding
receivable cannot be collected in full. The write-down is recognised
in the income statement via a valuation account.

FInanCIaL assets at FaIr vaLue tHrouGH proFIt or Loss

All financial instruments held for trading and derivatives that
do not satisfy the criteria for hedge accounting are assigned to this
category. They are generally measured at fair value. All changes
in fair value are recognised in income. All financial instruments
in this category are accounted for at the trade date. Assets in this
category are recognised as current assets if they are either held for
trading or will likely be realised within 12 months of the balance
sheet date.

To avoid variations in earnings resulting from changes in the
fair value of derivative financial instruments, hedge accounting is
applied where possible and economically useful. Gains and losses
from the derivative and the related hedged item are recognised in
income simultaneously. Depending on the hedged item and the risk
to be hedged, the Group uses fair value hedges and cash flow hedges.
The carrying amounts of financial assets not carried at fair
value through profit or loss are tested for impairment at each bal-
ance sheet date and whenever there are indications of impairment.
The amount of any impairment loss is determined by comparing
the carrying amount and the fair value. If there are objective in-
dications of impairment, an impairment loss is recognised in the
income statement under other operating expenses or net financial
income / net finance costs. Impairment losses are reversed if there
are objective reasons arising after the balance sheet date indicating
that the reasons for impairment no longer exist. The increased
carrying amount resulting from the reversal of the impairment loss
may not exceed the carrying amount that would have been deter-
mined (net of amortisation or depreciation) if the impairment loss
had not been recognised. Impairment losses are recognised within
the Group if the debtor is experiencing significant financial diffi-
culties, it is highly probable that the debtor will be the subject of
bankruptcy proceedings, there are material changes in the issuer’s
technological, economic, legal or market environment, or the fair
value of a financial instrument falls below its amortised cost for a
prolonged period.

A fair value hedge hedges the fair value of recognised assets
and liabilities. Changes in the fair value of both the derivatives and
the hedged item are recognised in income simultaneously.

A cash flow hedge hedges the fluctuations in future cash flows
from recognised assets and liabilities (in the case of interest rate
risks), highly probable forecast transactions as well as unrecog-
nised firm commitments that entail a currency risk. The effective
portion of a cash flow hedge is recognised in the hedging reserve in
equity. Ineffective portions resulting from changes in the fair value
of the hedging instrument are recognised directly in income. The
gains and losses generated by the hedging transactions are initially
recognised in equity and are then reclassified to profit or loss in
the period in which the asset acquired or liability assumed affects
profit or loss. If a hedge of a firm commitment subsequently results
in the recognition of a non-financial asset, the gains and losses
recognised directly in equity are included in the initial carrying
amount of the asset (basis adjustment).

Net investment hedges in foreign entities are treated in the
same way as cash flow hedges. The gain or loss from the effective
portion of the hedge is recognised in other comprehensive income,
whilst the gain or loss attributable to the ineffective portion is
recog nised directly in income. The gains or losses recognised in
other comprehensive income remain there until the disposal or
partial disposal of the net investment. Detailed information on
hedging transactions can be found in

Note 50.2.

Regular way purchases and sales of financial assets are recog-
nised at the settlement date, with the exception of held-for-trading
instruments, particularly derivatives. A financial asset is derecog-
nised if the rights to receive the cash flows from the asset have
expired. Upon transfer of a financial asset, a review is made under
the requirements of IAS 39 governing disposal as to whether the
asset should be derecognised. A disposal gain / loss arises upon
disposal. The remeasurement gains / losses recognised in other
comprehensive income in prior periods must be reversed as at the
disposal date. Financial liabilities are derecognised if the payment
obligations arising from them have expired.

Investment property

In accordance with IAS 40, investment property is property
held to earn rentals or for capital appreciation or both, rather than
for use in the supply of services, for administrative purposes, or
for sale in the normal course of the company’s business. It is meas-
ured in accordance with the cost model. Depreciable investment
property is depreciated over a period of between 20 and 50 years
using the straight-line method. The fair value is determined on
the basis of expert opinions. Impairment losses are recognised in
accordance with the principles described under the section headed
Impairment.

152

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Inventories

Non-controlling interests

Non-controlling interests are the proportionate minority
interests in the equity of subsidiaries and are recognised at their
carrying amount. If an interest is acquired from, or sold to, other
shareholders without this impacting the existing control relation-
ship, this is presented as an equity transaction. The difference
between the proportionate net assets acquired from, or sold to,
another shareholder / other shareholders and the purchase price
is recognised in other comprehensive income. If non-controlling
interests are increased by the proportionate net assets, no goodwill
is allocated to the proportionate net assets.

Share-based payments to executives

Equity-settled share-based payment transactions are meas-
ured at fair value at the grant date. The fair value of the obligation
is recognised in staff costs over the vesting period. The fair value
of equity-settled share-based payment transactions is determined
using internationally recognised valuation techniques.

Stock appreciation rights are measured on the basis of an
option pricing model in accordance with IFRS 2. The stock appreci-
ation rights are measured on each reporting date and on the settle-
ment date. The amount determined for stock appreciation rights
that will probably be exercised is recognised pro rata in income
under staff costs to reflect the services rendered as consideration
during the vesting period (lock-up period). A provision is recog-
nised for the same amount.

Retirement plans

There are arrangements in many countries under which the
Group grants post-employment benefits to its employees. These
benefits include pensions, lump-sum payments on retirement and
other post-employment benefits referred to in these disclosures as
retirement benefits, pensions and similar benefits, or simply pen-
sions. A distinction is made between defined benefit and defined
contribution plans.

Inventories are assets that are held for sale in the ordinary
course of business, are in the process of production, or are con-
sumed in the production process or in the rendering of services.
They are measured at the lower of cost or net realisable value.
Valuation allowances are charged for obsolete inventories and
slow-moving goods.

Government grants

In accordance with IAS 20, government grants are recognised
at their fair value only when there is reasonable assurance that the
conditions attaching to them will be complied with and that the
grants will be received. The grants are reported in the income
statement and are generally recognised as income over the periods
in which the costs they are intended to compensate are incurred.
Where the grants relate to the purchase or production of assets,
they are reported as deferred income and recognised in the income
statement over the useful lives of the assets.

Assets held for sale and liabilities associated with assets
held for sale

Assets held for sale are assets available for sale in their pres-
ent condition and whose sale is highly probable. The sale must
be expected to qualify for recognition as a completed sale within
one year of the date of classification. Assets held for sale may con-
sist of individual non-current assets, groups of assets (disposal
groups), components of an entity or a subsidiary acquired exclu-
sively for resale (discontinued operations). Liabilities intended to
be disposed of together with the assets in a single transaction form
part of the disposal group or discontinued operation and are also
reported separately as liabilities associated with assets held for sale.
Assets held for sale are no longer depreciated or amortised, but
are recognised at the lower of their fair value less costs to sell and
the carrying amount. Gains and losses arising from the remeas-
urement of individual non-current assets or disposal groups clas-
sified as held for sale are reported in profit or loss from continuing
operations until the final date of disposal. Gains and losses arising
from the measurement at fair value less costs to sell of discontin-
ued operations classified as held for sale are reported in profit or
loss from discontinued operations. This also applies to the profit
or loss from operations and the gain or loss on disposal of these
components of an entity.

Cash and cash equivalents

Cash and cash equivalents comprise cash, demand deposits
and other short-term liquid financial assets with an original ma-
turity of up to three months and are carried at their principal
amount. Overdraft facilities used are recognised in the balance
sheet as amounts due to banks.

Deutsche Post DHL 2013 Annual Report

153

Notes
Basis of preparation

Consolidated Financial Statements

DeFIneD ContrIButIon retIreMent pLans For tHe Group’s
HourLY Workers anD saLarIeD eMpLoYees

The contributions to defined contribution retirement plans
for the Group’s hourly workers and salaried employees are also
recognised in staff costs.

This also includes contributions to multi-employer plans,
which are basically defined benefit plans, particularly in the USA
and the Netherlands. The relevant institutions do not provide
the participating companies with sufficient information to allow
the use of defined benefit accounting. The plans are therefore
accounted for as if they were defined contribution plans.

Contributions are paid into these multi-employer plans in
the USA based on collective agreements between employers and
the local unions. There is no employer liability to any of the plans
beyond the normal contribution rates negotiated in collective
bargaining except in the event of a withdrawal that meets speci-
fied criteria. At the end of 2013, there existed no agreements with
any of these multi-employer plans beyond the collective agree-
ments that set the contribution rates. Employer contributions
to pension funds are expected to amount to €23 million in 2014
( actual employer contributions in financial year 2013: €23 million).
Accord ing to information made available by the pension funds,
some of the plans to which Deutsche Post DHL makes contribu-
tions are underfunded. There is no available information from
the plans themselves which would indicate any change from the
contribution rates set in the 2013 collective agreements. At pres-
ent, Deutsche Post DHL does not account for a significant share of
the contributions to the pension funds except for one fund where
Deutsche Post DHL is the largest contributor.

Contribution rates for one of the multi-employer retirement
plans in the Netherlands are determined each year by the manage-
ment body of the pension fund with the involvement of the central
bank of the Netherlands, based on cost coverage. These contribu-
tion rates are the same for all employers and employees involved.
There is no employer liability towards the fund beyond the con-
tributions set, even in the case of withdrawal. Any sub sequent
under funding ultimately results in the rights of members being
cut and / or no indexation of their rights. Employer contrib utions
to the pension fund are expected to amount to €21 million in 2014
(actual employer contributions in financial year 2013: €21 million).
According to information made available by the pension fund, the
plan is not underfunded at present. Deutsche Post DHL does not
represent a significant level to the fund in terms of contributions.

tHe Group’s DeFIneD BeneFIt retIreMent pLans

Defined benefit pension obligations are measured using the
projected unit credit method prescribed by IAS 19. This involves
making certain actuarial assumptions. Most of the defined benefit
retirement plans are at least partly funded via external plan
assets. The remaining net obligations are funded by provisions for
pensions and similar obligations; net assets are presented sepa-
rately as pension assets. Where necessary, an asset ceiling must be
applied when recognising pension assets. With regard to the cost
components, the service cost is recognised in staff costs, the net
interest cost in net other finance costs and any remeasurement out-
side profit and loss in other comprehensive income.

DeFIneD ContrIButIon retIreMent pLans For CIvIL servant
eMpLoYees In GerManY

Deutsche Post AG pays contributions to defined contribution
plans for civil servants in Germany in accordance with statutory
provisions. These contributions are recognised in staff costs.

Under the provisions of the Gesetz zum Personalrecht
früheren Deutschen Bundespost (Post-
der Beschäftigten der
PersRG – Former Deutsche Bundespost Employees Act), intro-
duced as article 4 of the Gesetz zur Neuordnung des Postwesens
und der Tele kommunikation (PTNeuOG – German Posts and
Telecommuni cations Reorganisation Act), Deutsche Post AG
provides benefit and assistance payments through a special pen-
sion fund for postal civil servants (Postbeamtenversorgungskasse)
operated jointly, since early 2001, by the Deutsche Bundespost
successor companies, the Bundes-Pensions-Service für Post und
Telekommunikation e. V. (BPS-PT), to retired employees or their
surviving dependants who are entitled to benefits on the basis of a
civil service appointment. At the beginning of 2013, Bundesanstalt
für Post und Telekommunikation (BAnstPT – Federal Posts and
Telecommunications Agency) assumed the rights and obligations
of the BPS-PT. It has undertaken the tasks of the pension fund for
postal civil servants since that time. The amount of Deutsche Post
AG’s payment obligations is governed by section 16 of the Post-
PersRG. Since 2000, this Act has obliged Deutsche Post AG to pay
into the postal civil servant pension fund an annual contribution
of 33 % of the gross compensation of its active civil servants and the
notional gross compensation of civil servants on leave of absence
who are eligible for a pension.

Under section 16 of the PostPersRG, the federal government
makes good the difference between the current payment obliga-
tions of the postal civil servant pension fund on the one hand, and
the funding companies’ current contributions or other return on
assets on the other, and guarantees that the postal civil servant
pension fund is able at all times to meet the obligations it has as-
sumed in respect of its funding companies. Insofar as the federal
government makes payments to the postal civil servant pension
fund under the terms of this guarantee, it cannot claim reimburse-
ment from Deutsche Post AG.

154

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Other provisions

Other provisions are recognised for all legal or constructive
obligations to third parties existing at the balance sheet date that
have arisen as a result of past events, that are expected to result
in an outflow of future economic benefits and whose amount can
be measured reliably. They represent uncertain obligations that are
carried at the best estimate of the expenditure required to settle
the obligation. Provisions with more than one year to maturity are
discounted at market rates of interest that reflect the region and
time to settlement of the obligation. The discount rates used in the
financial year were between 0.25 % and 11 % (previous year: 0.25 %
and 9.25 %). The effects arising from changes in interest rates are
recognised in net financial income / net finance cost.

Provisions for restructurings are only established in accord-
ance with the aforementioned criteria for recognition if a detailed,
formal restructuring plan has been drawn up and communicated
to those affected.

The technical reserves (insurance) consist mainly of out-
standing loss reserves and IBNR (incurred but not reported claims)
reserves. Outstanding loss reserves represent estimates of obliga-
tions in respect of actual claims or known incidents expected to give
rise to claims, which have been reported to the company but which
have yet to be finalised and presented for payment. Outstanding
loss reserves are based on individual claim valuations carried out
by the company or its ceding insurers. IBNR reserves represent
estimates of obligations in respect of incidents taking place on or
before the balance sheet date that have not been reported to the
company. Such reserves also include provisions for potential errors
in settling outstanding loss reserves. The company carries out its
own assessment of ultimate loss liabilities using actuarial methods
and also commissions an independent actuarial study of these each
year in order to verify the reasonableness of its estimates.

Financial liabilities

On initial recognition, financial liabilities are carried at fair
value less transaction costs. The price determined on a price- efficient
and liquid market or a fair value determined using the treasury risk
management system deployed within the Group is taken as the fair
value. In subsequent periods the financial liabilities are measured at
amortised cost. Any differences between the amount received and
the amount repayable are recognised in income over the term of the
loan using the effective interest method.

ConvertIBLe BonD on DeutsCHe post aG sHares

The convertible bond on Deutsche Post AG shares is split
into an equity and a debt component, in line with the contractual
arrangements. The debt component, less the transaction costs, is
reported under financial liabilities (bonds), with interest added up
to the issue amount over the term of the bond using the effective
interest method (unwinding of discount). The value of the call
option, which allows Deutsche Post AG to redeem the bond early
if a specified share price is reached, is attributed to the debt com-
ponent in accordance with IAS 32.31. The conversion right is classi-
fied as an equity derivative and is reported in capital reserves. The
carrying amount is calculated by assigning to the conversion right
the residual value that results from deducting the amount calcu-
lated separately for the debt component from the fair value of the
instrument as a whole. The transaction costs are deducted on a
proportionate basis.

Liabilities

Trade payables and other liabilities are carried at amortised
cost. The fair value of the liabilities corresponds more or less to
their carrying amount.

Deferred taxes

In accordance with IAS 12, deferred taxes are recognised for
temporary differences between the carrying amounts in the IFRS
financial statements and the tax accounts of the individual entities.
Deferred tax assets also include tax reduction claims which arise
from the expected future utilisation of existing tax loss carry-
forwards and which are likely to be realised. In compliance with
IAS 12.24 (b) and IAS 12.15 (b), deferred tax assets or liabilities were
only recognised for temporary differences between the carrying
amounts in the IFRS financial statements and in the tax accounts of
Deutsche Post AG where the differences arose after 1 January 1995.
No deferred tax assets or liabilities are recognised for temporary
differences resulting from initial differences in the opening tax
accounts of Deutsche Post AG as at 1 January 1995. Further details
on deferred taxes from tax loss carryforwards can be found in

Note 30.

In accordance with IAS 12, deferred tax assets and liabilities
are calculated using the tax rates applicable in the individual coun-
tries at the balance sheet date or announced for the time when the
deferred tax assets and liabilities are realised. The tax rate of 29.8 %
(unchanged from the previous year) applied to German Group
companies comprises the corporation tax rate plus the solidarity
surcharge, as well as a municipal trade tax rate that is calculated
as the average of the different municipal trade tax rates. Foreign
Group companies use their individual income tax rates to calculate
deferred tax items. The income tax rates applied for foreign com-
panies amount to up to 38 % (previous year: 41 %).

Deutsche Post DHL 2013 Annual Report

155

Notes
Basis of preparation

Consolidated Financial Statements

of tax planning strategies are revised downwards, or in the event
that changes to current tax laws restrict the extent to which future
tax benefits can be realised.

Goodwill is regularly reported in the Group’s balance sheet
as a consequence of business combinations. When an acquisition
is initially recognised in the consolidated financial statements, all
identifiable assets, liabilities and contingent liabilities are measured
at their fair values at the date of acquisition. One of the most import-
ant estimates this requires is the determination of the fair values of
these assets and liabilities at the date of acquisition. Land, buildings
and office equipment are generally valued by independent experts,
whilst securities for which there is an active market are recognised
at the quoted exchange price. If intangible assets are identified in
the course of an acquisition, their measurement can be based on
the opinion of an independent external expert valuer, depending
on the type of intangible asset and the complexity involved in
determining its fair value. The independent expert determines the
fair value using appropriate valuation techniques, normally based
on expected future cash flows. In addition to the assumptions
about the development of future cash flows, these valuations are
also significantly affected by the discount rates used.

Impairment testing for goodwill is based on assumptions with
respect to the future. The Group carries out these tests annually
and also whenever there are indications that goodwill has become
impaired. The recoverable amount of the CGU must then be calcu-
lated. This amount is the higher of fair value less costs to sell and
value in use. Determining value in use requires adjustments and
estimates to be made with respect to forecasted future cash flows
and the discount rate applied. Although management believes that
the assumptions made for the purpose of calculating the recover-
able amount are appropriate, possible unforeseeable changes in
these assumptions – e. g., a reduction in the EBIT margin, an in-
crease in the cost of capital or a decline in the long-term growth
rate – could result in an impairment loss that could negatively affect
the Group’s net assets, financial position and results of operations.

Income taxes

Income tax assets and liabilities are measured at the amounts
for which repayments from or payments to the tax authorities are
expected to be received or made.

Contingent liabilities

Contingent liabilities represent possible obligations whose
existence will be confirmed only by the occurrence or non-occur-
rence of one or more uncertain future events not wholly within the
control of the enterprise. Contingent liabilities also include certain
obligations that will probably not lead to an outflow of resources
embodying economic benefits, or where the amount of the outflow
of resources embodying economic benefits cannot be measured
with sufficient reliability. In accordance with IAS 37, contingent
liabilities are not recognised as liabilities;

Note 51.

Exercise of judgement in applying the accounting policies

The preparation of IFRS-compliant consolidated financial
statements requires the exercise of judgement by management.
All estimates are reassessed on an ongoing basis and are based
on historical experience and expectations with regard to future
events that appear reasonable under the given circumstances. For
example, this applies to assets held for sale. In this case, it must be
determined whether the assets are available for sale in their pres-
ent condition and whether their sale is highly probable. If this is
the case, the assets and the associated liabilities are reported and
measured as assets held for sale and liabilities associated with
assets held for sale.

Estimates and assessments made by management

The preparation of the consolidated financial statements
in accordance with IFRS s requires management to make certain
assumptions and estimates that may affect the amounts of the assets
and liabilities included in the balance sheet, the amounts of income
and expenses, and the disclosures relating to contingent liabilities.
Examples of the main areas where assumptions, estimates and the
exercise of management judgement occur are the recognition of
provisions for pensions and similar obligations, the calculation of
discounted cash flows for impairment testing and purchase price
allocations, taxes and legal proceedings.

Disclosures regarding the assumptions made in connection

with defined benefit retirement plans can be found in

Note 44.

The Group has operating activities around the globe and
is subject to local tax laws. Management can exercise judgement
when calculating the amounts of current and deferred taxes in the
relevant countries. Although management believes that it has made
a reasonable estimate relating to tax matters that are inherently
uncertain, there can be no guarantee that the actual outcome of
these uncertain tax matters will correspond exactly to the original
estimate made. Any difference between actual events and the esti-
mate made could have an effect on tax liabilities and deferred taxes
in the period in which the matter is finally decided. The amount
recog nised for deferred tax assets could be reduced if the estimates
of planned taxable income or the tax benefits achievable as a result

156

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Basis of preparation

Pending legal proceedings in which the Group is involved are
Note 53. The outcome of these proceedings could
disclosed in
have a significant effect on the net assets, financial position and
results of operations of the Group. Management regularly analyses
the information currently available about these proceedings and
recognises provisions for probable obligations including estimated
legal costs. Internal and external legal advisers participate in
making this assess ment. In deciding on the necessity for a provision,
manage ment takes into account the probability of an unfavourable
outcome and whether the amount of the obligation can be esti-
mated with sufficient reliability. The fact that an action has been
launched or a claim asserted against the Group, or that a legal dis-
pute has been disclosed in the Notes, does not necessarily mean
that a provision is recognised for the associated risk.

All assumptions and estimates are based on the circum-
stances prevailing and assessments made at the balance sheet
date. For the purpose of estimating the future development of the
business, a realistic assessment was also made at that date of the
economic environ ment likely to apply in the future to the different
sectors and regions in which the Group operates. In the event of
developments in this general environment that diverge from the
assumptions made, the actual amounts may differ from the esti-
mated amounts. In such cases, the assumptions made and, where
necessary, the carrying amounts of the relevant assets and liabil-
ities are adjusted accordingly.

At the date of preparation of the consolidated financial state-
ments, there is no indication that any significant change in the
assumptions and estimates made will be required, so that on the
basis of the information currently available it is not expected that
there will be any significant adjustments in financial year 2014 to
the carrying amounts of the assets and liabilities recognised in the
financial statements.

Consolidation methods

The consolidated financial statements are based on the IFRS
financial statements of Deutsche Post AG and the subsidiaries, joint
ventures and associates included in the consolidated financial
statements and prepared in accordance with uniform accounting
policies as at 31 December 2013.

Acquisition accounting for subsidiaries included in the
consolidated financial statements uses the purchase method of
accounting. The cost of the acquisition corresponds to the fair value
of the assets given up, the equity instruments issued and the liabil-
ities assumed at the transaction date. Acquisition- related costs are
recognised as expenses. Contingent consideration is recognised at
fair value at the date of initial consolidation.

Joint ventures are proportionately consolidated in accord-
ance with IAS 31. Assets and liabilities, as well as income and
expenses, of jointly controlled companies are included in the con-
solidated financial statements in proportion to the interest held in
these companies. Proportionate acquisition accounting as well as
recognition and measurement of goodwill use the same methods
as applied to the consolidation of subsidiaries.

Companies on which the parent can exercise significant
influence (associates) are accounted for in accordance with the
equity method using the purchase method of accounting. Any
goodwill is included in the carrying amounts of the investments.

In the case of step acquisitions, the equity portion previ-
ously held is remeasured at the fair value applicable on the date
of acquisition and the resulting gain or loss recognised in profit
or loss.

Intra-group revenue, other operating income, and expenses
as well as receivables, liabilities and provisions between companies
that are consolidated fully or on a proportionate basis are elimi-
nated. Intercompany profits or losses from intra-group deliveries
and services not realised by sale to third parties are eliminated. Un-
realised gains and losses from business transactions with associates
are eliminated on a pro rata basis.

Deutsche Post DHL 2013 Annual Report

157

Notes
Segment reporting

Consolidated Financial Statements

SEGMENT REPORTING

10 Segment reporting

Segments by division

€ m

1 Jan. to 31 Dec.

2012 1

MAIL

2013

GLOBAL FOR WARDING,
FREIGHT

EXPRESS

SUPPLY CHAIN

Corporate Center /
Other

Consolidation

Group

2012 1

2013

2012 1

2013

2012 1

2013

2012 1

External revenue

13,874

14,344

12,378

12,332

14,980

14,151

14,229

14,187

Internal revenue

108

400

380

686

687

111

Total revenue

13,972

14,452

12,778

12,712

15,666

14,838

14,340

14,277

1,152

1,203

2013

1,180

1,251

2012 1

2013

2012 1

2013

55,512

55,085

–2,447

–2,445

–2,447

–2,445

55,512

55,085

Profit / loss from
operating activities
(EBIT)

Net income from
associates

1,048

1,226

1,110

1,133

514

483

419

441

– 423

– 421

–3

–1

2,665

2,861

Segment assets

4,433

4,670

8,684

8,721

7,951

7,659

6,264

5,974

1,322

1,491

–215

–105

28,439

28,410

Investments
in associates

Segment liabilities 2

Capex

Depreciation
and amortisation

Impairment losses

Total depreciation,
amortisation and
impairment losses

Other non-cash
expenses

2,505

332

2,492

434

2,547

597

2,915

508

2,950

150

2,929

129

2,825

300

2,908

277

333

334

306

346

358

273

382

400

277

386

408

256

111

286

288

126

270

107

797

318

199

206

845

407

209

213

115

Employees 3

146,923

149,692

84,623

84,986

43,590

44,174

140,193

143,761

12,958

12,907

–120

–112

11,504

11,977

1,697

1,755

1,311

1,303

1,339

1,341

844

838

428,287

435,520

Information about geographical areas

€ m

1 Jan. to 31 Dec.

External revenue

Non-current assets

Capex

1 Prior-year amounts adjusted
2 Including non-interest-bearing provisions.
3 Average FTE s.

Note 4.

Germany

Europe
(excluding Germany)

Americas

Asia Pacific

Other regions

2012

2013

2012

2013

16,825

17,074

17,840

17,628

4,759

979

5,125

1,128

7,228

259

7,015

227

2012

9,819

3,408

259

2013

9,563

3,244

180

2012

8,619

3,227

160

2013

8,526

3,025

165

2012

2,409

332

2013

2,294

332

2012

55,512

18,954

1,697

Group

2013

55,085

18,741

1,755

The expenses for IT services provided in the IT service centres
are allocated to the divisions by their origin. The additional costs
resulting from Deutsche Post AG’s universal postal service obliga-
tion (nationwide retail outlet network, delivery every working day),
and from its obligation to assume the compensation structure as
the legal successor to Deutsche Bundespost, are allocated to the
MAIL division.

10.1 Segment reporting disclosures

Deutsche Post DHL reports four operating segments; these
are managed independently by the responsible segment manage-
ment bodies in line with the products and services offered and
the brands, distribution channels and customer profiles involved.
Components of the entity are defined as a segment on the basis of
the existence of segment managers with bottom-line responsibility
who report directly to Deutsche Post DHL’s top management.

External revenue is the revenue generated by the divisions
from non-Group third parties. Internal revenue is revenue gener-
ated with other divisions. If comparable external market prices exist
for services or products offered internally within the Group, these
market prices or market-oriented prices are used as transfer prices
(arm’s length principle). The transfer prices for services for which
no external market exists are generally based on incremental costs.

158

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Segment reporting

As part of the central management of currency risk, fluc-
tuations between projected and actual exchange rates are fully or
partially absorbed centrally by Corporate Treasury on the basis of
division- specific agreements.

In keeping with internal

reporting, capital expenditure
(capex) is disclosed. Additions to intangible assets net of goodwill
and to property, plant and equipment are reported in the capex
figure. Depreciation, amortisation and impair ment losses relate to
the segment assets allocated to the individual divisions. Other non-
cash expenses relate primarily to expenses from the recognition of
provisions.

suppLY CHaIn

The division specialises in contract logistics and provides
warehousing and transport services as well as value-added services
along the entire supply chain in the different sectors. The division
also offers end-to-end solutions for corporate information and
communications management. The division’s business units are
Supply Chain and Williams Lea.

In addition to the reportable segments given above, segment

reporting comprises the following categories:

The profitability of the Group’s operating areas is measured as

Corporate Center / Other

Corporate Center / Other comprises Global Business Services
(GBS), the Corporate Center, non-operating activities and other
business activities. The profit / loss generated by GBS is allocated to
the operating segments, whilst its assets and liabilities remain with
GBS (asymmetrical allocation).

Consolidation

The data for the divisions are presented following consolida-
tion of interdivisional transactions. The transactions between the
divisions are eliminated in the Consolidation column.

10.3

Information about geographical areas

The main geographical areas in which the Group is active are
Germany, Europe, the Americas, Asia Pacific and Other regions.
External revenue, non-current assets and capex are disclosed for
these regions. Revenue, assets and capex are allocated to the indi-
vidual regions on the basis of the domicile of the reporting entity.
Non-current assets primarily comprise intangible assets, property,
plant and equipment and other non-current assets.

profit from operating activities (EBIT).

Reflecting the Group’s predominant organisational structure,
the primary reporting format is based on the divisions. The Group
distinguishes between the following divisions:

10.2 Segments by division

MaIL

In addition to the transport and delivery of written commu-
nications, the MAIL division is positioned as an end-to-end service
provider for the management of written communications. The
division comprises the following business units: Mail Communica-
tion, Dialogue Marketing, Press Services, Parcel Germany, Global
Mail, Retail Outlets and the Pension Service.

eXpress

The EXPRESS division offers international and domestic
courier and express services to business and private customers. The
division comprises the Express Europe, Express Americas, Express
Asia Pacific and Express MEA (Middle East and Africa) business
units.

GLoBaL ForWarDInG, FreIGHt

The activities of the GLOBAL FORWARDING, FREIGHT division
comprise the transportation of goods by rail, road, air and sea. The
division’s business units are Global Forwarding and Freight.

Deutsche Post DHL 2013 Annual Report

159

Notes
Segment reporting

Consolidated Financial Statements

10.4 Reconciliation of segment amounts

Reconciliation of segment amounts to consolidated amounts

Reconciliation

€ m

External revenue

Internal revenue

Total revenue

Other operating income

Materials expense

Staff costs

Other operating expenses

Depreciation, amortisation and impairment
losses

Profit / loss from operating activities (eBIt)

Net income from associates

Net other finance costs

Profit before income taxes

Income taxes

Consolidated net profit for the period

of which attributable to

Deutsche Post AG shareholders

Non-controlling interests

1 Prior-year amounts adjusted

Note 4.

Total for reportable segments

Corporate Center / Other

Reconciliation to Group /
Consolidation

Consolidated amount

2012 1

55,461

1,295

56,756

1,966

–33,161

–16,845

– 4,492

–1,133

3,091

–

2013

55,014

1,265

56,279

1,822

–32,492

–16,812

– 4,386

–1,128

3,283

–

2012 1

1,152

1,203

1,420

–1,294

– 944

– 602

–206

– 423

–

2013

1,180

1,251

1,358

–1,308

– 983

– 526

–213

– 421

–

2012 1

–2,447

–1,218

2,592

1,051

–3

–

2013

–2,445

–1,219

2,588

1,065

–1

–

2012 1

55,512

2,168

–31,863

–17,770

– 4,043

–1,339

2,665

– 458

2,209

– 447

1,762

1,640

122

2013

55,085

1,961

–31,212

–17,785

–3,847

–1,341

2,861

–291

2,572

–361

2,211

2,091

120

the

The

table

shows

following

reconciliation of
Deutsche Post DHL’s total assets to the segment assets. Financial
assets, income tax assets, deferred taxes, cash and cash equiva-
lents as well as additional interest-bearing asset components are
deducted.

The

table

following

reconciliation of
Deutsche Post DHL’s total liabilities to the segment liabilities. The
interest-bearing components of the provisions and liabilities as
well as income tax liabilities and deferred taxes are deducted.

shows

the

Reconciliation of segment assets

€ m

Total assets

Investment property

Non-current financial assets including investments
in associates

Other non-current assets

Deferred tax assets

Income tax assets

Receivables and other current assets

Current financial assets

Cash and cash equivalents

Segment assets

of which Corporate Center / Other

Total for reportable segments

Consolidation

1 Prior-year amounts adjusted

Note 4.

2012 1

33,857

– 43

–1,085

–200

–1,328

–127

–10

–225

–2,400

28,439

1,322

27,332

–215

2013

35,478

–33

–1,172

–125

–1,327

–168

–7

– 819

–3,417

28,410

1,491

27,024

–105

Reconciliation of segment liabilities

€ m

Total equity and liabilities

Equity

Consolidated liabilities

Non-current provisions

Non-current liabilities

Current provisions

Current liabilities

Segment liabilities

of which Corporate Center / Other

Total for reportable segments

Consolidation

1 Prior-year amounts adjusted

Note 4.

2012 1

33,857

– 9,228

24,629

–7,315

– 4,689

–182

– 939

11,504

797

10,827

–120

2013

35,478

–10,048

25,430

– 6,715

– 4,839

–143

–1,756

11,977

845

11,244

–112

160

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Income statement disclosures

INCOME STATEMENT DISCLOSURES

11 Revenue

€ m

Revenue

The decline in other operating income is largely attributable
to the lower income from the reversal of provisions. In the previous
year, the income from the reversal of provisions primarily reflected
changes in the assessment of settlement payment obligations
assumed in the context of the restructuring measures in the USA.

2012

55,512

2013

55,085

€31 million of the gains on disposal of non-current assets is
attributable to the deconsolidation gains on the sale of subsidiaries;

Revenue declined by €427 million (0.8 %) year-on-year to

€55,085 million. The decrease was due to the following factors:

Factors affecting revenue decrease

€ m

Organic growth

Portfolio changes 1

Currency translation effects

Other factors 2

Total

2013

1,548

–287

–1,738

– 427

1 Disclosures
2 See

Note 2.

Note 45.1 for changes in the provision for postage stamps.

Note 2.

The higher income from the remeasurement of liabilities
in the previous year related largely to the reversal of accruals no
longer required.

Subsidies relate to grants for the purchase or production of
assets. The grants are reported as deferred income and recognised
in the income statement over the useful lives of the assets.

Miscellaneous other operating income includes a large num-

ber of smaller individual items.

13 Materials expense

€ m

Cost of raw materials, consumables and supplies,
and of goods purchased and held for resale

2012

2013

As in the prior-year period, there was no revenue in financial

Goods purchased and held for resale

year 2013 that was generated on the basis of barter transactions.

The further classification of revenue by division and the
allocation of revenue to geographical areas are presented in the
segment reporting.

12 Other operating income

€ m

Income from the reversal of provisions

Insurance income

Income from currency translation differences

Rental and lease income

Income from fees and reimbursements

Gains on disposal of non-current assets

Commission income

Income from the remeasurement of liabilities

Income from work performed and capitalised

Income from the remeasurement of assets
and receivables

Income from prior-period billings

Income from derivatives

Income from the derecognition of liabilities

Income from loss compensation

Recoveries on receivables previously written off

Subsidies

Income from trade-related insurance deductions

Miscellaneous

Other operating income

2012

2013

396

172

178

144

145

127

119

193

105

206

191

155

136

133

112

105

101

370

2,168

425

1,961

Aircraft fuel

Fuel

Packaging material

Spare parts and repair materials

Office supplies

Other expenses

Cost of purchased services

Transportation costs

Cost of temporary staff

Expenses from non-cancellable leases

Maintenance costs

IT services

Expenses from cancellable leases

Commissions paid

Expenses for the use of Postbank branches

Other lease expenses (incidental expenses)

Other purchased services

Materials expense

1,779

1,364

871

351

123

4,628

18,835

2,015

1,730

965

611

545

456

430

254

1,394

27,235

31,863

1,829

1,312

848

364

121

4,627

18,268

2,005

1,696

969

603

551

467

409

261

1,356

26,585

31,212

The decline in the materials expense is mainly due to lower

transportation costs as a result of exchange rate effects.

Other expenses include a large number of individual items.

Deutsche Post DHL 2013 Annual Report

161

Notes
Income statement disclosures

Consolidated Financial Statements

14 Staff costs / employees

15 Depreciation, amortisation and impairment losses

€ m

Wages, salaries and compensation 1

of which expenses under Share Matching Scheme

of which expenses from 2006 SAR Plan / LTIP

Social security contributions

Retirement benefit expenses 1

Expenses for other employee benefits

Expenses for severance payments

Staff costs

1 Prior-year amounts adjusted

Note 4.

2012

14,209

143

2,094

954

336

177

2013

14,307

202

2,111

883

357

127

17,770

17,785

The increase in wage, salary and compensation payments due
to the higher headcount and staff costs was cushioned by exchange
rate effects.

€62 million of the expenses under the Share Matching
Scheme (previous year: €72 million) is attributable to cash-settled
share-based payments. This amount corresponds to the obligation
at the balance sheet date. In addition, expenses of €20 million
(previous year: €19 million) were incurred for equity-settled share-
based payments.

Staff costs relate mainly to wages, salaries and compensation,
as well as all other benefits paid to employees of the Group for their
services in the year under review. Social security contributions
relate in particular to statutory social security contributions paid
by employers.

Retirement benefit expenses include the service cost related
to the defined benefit retirement plans. Detailed information can
Note 44. These expenses also include contributions
be found in
to defined contribution retirement plans for civil servants in
Germany in the amount of €538 million (previous year: €542 mil-
lion), as well as for the Group’s hourly workers and salaried
employees – particularly in the UK, the USA and the Netherlands –
in the amount of €286 million (previous year: €238 million).

The average number of Group employees in the year under

review, broken down by employee group, was as follows:

Employees (annual average)

headcount

Hourly workers and salaried employees

Civil servants

Trainees

Employees

2012

424,950

42,461

4,910

472,321

2013

433,956

40,321

4,935

479,212

The employees of companies acquired or disposed of during
the year under review were included rateably. Calculated as full-
time equivalents, the number of employees as at 31 December 2013
amounted to 435,285 (31 December 2012: 428,129). The number of
employees at consolidated joint ventures amounted to 163 on a pro-
portionate basis (previous year: 169).

Amortisation of and impairment losses on intangible
assets, excluding impairment of goodwill

Depreciation of and impairment losses on property,
plant and equipment

Land and buildings (including leasehold
improvements)

Technical equipment and machinery

Other equipment, operating and office
equipment, vehicle fleet

Aircraft

Impairment losses on investment property

Impairment of goodwill

Depreciation, amortisation and impairment losses

2012

295

180

242

420

202

1,044

1,339

2013

290

174

252

409

215

1,050

1,341

Depreciation, amortisation and impairment losses increased
by €2 million year-on-year to €1,341 million. This figure includes
impairment losses of €38 million (previous year: €28 million). The
impairment losses are attributable to the segments as follows:

Impairment losses on non-current assets

€ m

MaIL

Intangible assets

Property, plant and equipment

eXpress

Property, plant and equipment

of which technical equipment and machinery

of which aircraft

suppLY CHaIn

Intangible assets

Property, plant and equipment

of which technical equipment and machinery

Corporate Center / Other

Intangible assets

Property, plant and equipment

of which land and buildings

Investment property

Impairment losses

2012

2013

Most of the impairment losses are attributable to aircraft that

are no longer used, as in the previous year.

162

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Income statement disclosures

17 Net income from associates

2012

2013

€ m

Net income from associates

2012

2013

16 Other operating expenses

€ m

Expenses for advertising and public relations

Cost of purchased cleaning and security services

Travel and training costs

Other business taxes

Insurance costs

Warranty expenses and compensation payments

Write-downs of current assets

Telecommunication costs

Office supplies

Consulting costs

Expenses from currency translation differences

Entertainment and corporate hospitality expenses

Services provided by the Federal Posts and
Telecommunications Agency

Losses on disposal of assets

Voluntary social benefits

Contributions and fees

Commissions paid

Legal advisory costs

Monetary transaction costs

Audit costs

Expenses from prior-period billings

Expenses from derivatives

Donations

Miscellaneous

Other operating expenses

341

315

344

550

240

237

198

227

172

206

181

144

341

321

315

301

271

259

226

220

180

177

156

147

The decline in other operating expenses is mainly due to the
lower business taxes. The prior-year figure included the additional
VAT payment imposed by the tax authorities for the period from
1998 to 30 June 2010.

€23 million of the losses on disposal of assets is attributable
to the deconsolidation loss from the sale of DHL Fashion (France)
SAS’s fashion logistics business;

Note 2.
Miscellaneous other operating expenses include a large num-

ber of smaller individual items.

Taxes other than income taxes are either recognised under
the related expense item or, if no specific allocation is possible,
under other operating expenses.

288

4,043

325

3,847

of which unwinding of discounts for net
provisions for pensions and other provisions 1

Investments in companies on which a significant influence
can be exercised and which are accounted for using the equity
method contributed €2 million (previous year: €2 million) to net
finance costs. As in the previous year, this contribution mainly
relates to Danzas AEI Emirates LLC, United Arab Emirates.

18 Net other finance costs

€ m

Other financial income

Interest income

Income from other equity investments and financial
assets

Gains on the disposal of associates

Other financial income

Other finance costs

Interest expenses 1

Write-downs of financial assets

Other finance costs

Foreign currency result

Net other finance costs

1 Prior-year amounts adjusted

Note 4.

2012

2013

541

657

– 671

–381

–35

–372

–1,078

–37

– 458

182

–365

–187

–26

– 40

– 431

– 42

–291

Net other finance costs improved by €167 million to €291 mil-
lion. The change in financial income is due to the disposal gain of
€541 million on the sale of Deutsche Postbank AG included in the
prior-year figure. The interest income from the reversal of a provi-
sion for interest on tax liabilities made a positive contribution in
the financial year.

Finance costs were lower. In the previous year, this figure had
included the interest expense on the additional VAT payment. In fi-
nancial year 2013, the lower interest expense on pensions and other
provisions resulting from the decline in interest rates in particular
improved net finance costs.

Net finance costs includes interest income of €92 million
(previous year: €48 million) as well as interest expense of €365 mil-
lion (previous year, adjusted: €671 million). These result from
financial assets and liabilities that were not measured at fair value
through profit or loss.

Further information on the unwinding of discounted net

pension provisions can be found in

Note 44.5.

Deutsche Post DHL 2013 Annual Report

163

Consolidated Financial Statements

The effects from deferred tax assets of German Group com-
panies not recognised for tax loss carryforwards and temporary
differences relate primarily to Deutsche Post AG and members of
its consolidated tax group. Effects from deferred tax assets of for-
eign companies not recognised for tax loss carryforwards and tem-
porary differences relate primarily to the Americas region.

€106 million (previous year: €85 million) of the effects from
deferred tax assets not recognised for tax loss carryforwards and
temporary differences relates to the reduction of the effective in-
come tax expense due to the utilisation of tax loss carryforwards
and temporary differences, for which deferred tax assets had previ-
ously not been recognised. In addition, the recognition of deferred
taxes previously not recognised for tax loss carryforwards and of
deductible temporary differences from a prior period reduced the
deferred tax expense by €208 million (previous year: €207 mil-
lion). Effects from unrecognised deferred tax assets amounting to
€10 million (previous year: €79 million, write-down) were due to
a valuation allowance recognised for a deferred tax asset. Other
effects from unrecognised deferred tax assets primarily relate to
tax loss carryforwards for which no deferred taxes were recognised.
A deferred tax asset in the amount of €7 million (previous
year: €979 million) was recognised in the balance sheet for com-
panies that reported a loss in the previous year or in the current
period as, based on tax planning, realisation of the tax asset is
probable.

In financial year 2013, as in the previous year, German Group
companies were not affected by tax rate changes. The change in
the tax rate in some foreign tax jurisdictions did not lead to any
significant effects.

The effective income tax expense includes prior-period tax
expenses from German and foreign companies in the amount of
€113 million (tax income) (previous year: expense of €70 million).
The following table presents the tax effects on the compo-

nents of other comprehensive income:

Notes
Income statement disclosures

Income taxes

€ m

Current income tax expense

Current recoverable income tax

Deferred tax expense from temporary differences 1

Deferred tax income from tax loss carryforwards

Income taxes

1 Prior-year amounts adjusted

Note 4.

2012

– 591

– 587

– 47

187

140

– 447

2013

– 604

198

– 406

– 87

132

–361

The reconciliation to the effective income tax expense is
shown below, based on consolidated net profit before income taxes
and the expected income tax expense:

Reconciliation

€ m

Profit before income taxes 1

Expected income taxes

Deferred tax assets not recognised for initial
differences

Deferred tax assets of German Group companies
not recognised for tax loss carryforwards and
temporary differences

Deferred tax assets of foreign Group companies
not recognised for tax loss carryforwards and
temporary differences

Effect of current taxes from previous years

Tax-exempt income and non-deductible expenses

Differences in tax rates at foreign companies

Income taxes

1 Prior-year amounts adjusted

Note 4.

2012

2,209

– 658

2013

2,572

–766

105

242

141

–70

– 42

– 447

113

– 87

–361

The difference from deferred tax assets not recognised for
initial differences is due to temporary differences between the
carrying amounts in the IFRS financial statements and in the tax
accounts of Deutsche Post AG that result from initial differences
in the opening tax accounts as at 1 January 1995. In accordance
with IAS 12.15 (b) and IAS 12.24 (b), the Group did not recognise
any deferred tax assets in respect of these temporary differences,
which related mainly to property, plant and equipment as well as
to provisions for pensions and similar obligations. The remaining
temporary differences between the carrying amounts in the IFRS
financial statements and in the opening tax accounts amounted to
€366 million as at 31 December 2013 (previous year: €434 million).

164

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Income statement disclosures

Other comprehensive income

€ m

2013

Before taxes

Income taxes

After taxes

Change due to remeasurements
of net pension provisions

IFRS 3 revaluation reserve

IAS 39 revaluation reserve

IAS 39 hedging reserve

Currency translation reserve

Other changes in retained earnings

Share of other comprehensive
income of associates

– 50

–1

– 462

Other comprehensive income

–373

2012

Change due to remeasurements
of net pension provisions 1

IFRS 3 revaluation reserve

IAS 39 revaluation reserve

IAS 39 hedging reserve

Currency translation reserve

Other changes in retained earnings 1

Share of other comprehensive
income of associates

Other comprehensive income 1

1 Prior-year amounts adjusted

Note 4.

–1,198

–2

–12

–37

–1,208

– 8

–18

– 9

–14

–1

– 462

–363

–1,190

–2

–10

–37

–1,207

20 Consolidated net profit for the period

In financial year 2013, the Group generated a consolidated
net profit for the period of €2,211 million (previous year, adjusted:
€1,762 million). Of this figure, €2,091 million (previous year,
adjusted: €1,640 million) was attributable to Deutsche Post AG
shareholders.

21 Non-controlling interests

The net profit attributable to non-controlling interests

decreased by €2 million to €120 million.

22 Earnings per share

Basic earnings per share are computed in accordance with
IAS 33 (Earnings per Share) by dividing consolidated net profit by
the average number of shares. Basic earnings per share for financial
year 2013 were €1.73 (previous year, adjusted: €1.36).

Basic earnings per share

2012
adjusted

2013

Consolidated net profit for the
period attributable to Deutsche
Post AG shareholders 1

Weighted average number of shares
outstanding

€ m

1,640

2,091

number 1,208,890,874 1,208,910,457

Basic earnings per share 1

€

1.36

1.73

1 Prior-year amounts adjusted

Note 4.

To compute diluted earnings per share, the average num-
ber of shares outstanding is adjusted for the number of all poten-
tially dilutive shares. This item includes the executives’ rights to
shares under the Share Matching Scheme (as at 31 December 2013:
5,992,349 shares) and the maximum number of ordinary shares
that can be issued on exercise of the conversion rights under the
convertible bond issued on 6 December 2012. Consolidated net
profit for the period attributable to Deutsche Post AG shareholders
was increased by the amounts spent for the convertible bonds.

Diluted earnings per share

Consolidated net profit for the
period attributable to Deutsche
Post AG shareholders 1

Plus interest expense on the
convertible bond

Less income taxes

Adjusted consolidated net profit for
the period attributable to Deutsche
Post AG shareholders

Weighted average number
of shares outstanding

2012

2013

1,640

2,091

0 2

1,640

2,096

€ m

number

1,208,890,874

1,208,910,457

Potentially dilutive shares

number

51,569,759

52,944,097

Weighted average number
of shares for diluted earnings

Diluted earnings per share 1

1 Prior-year amounts adjusted
2 Rounded below €1 million.

Note 4.

number

1,260,460,633

1,261,854,554

€

1.30

1.66

23 Dividend per share

A dividend per share of €0.80 is being proposed for finan-
cial year 2013. Based on the 1,209,015,874 shares recorded in the
commercial register as at 31 December 2013, this corresponds to
a dividend distribution of €967 million. In the previous year the
dividend amounted to €0.70 per share. Further details on the
dividend distribution can be found in

Notes 42 and 59.

Deutsche Post DHL 2013 Annual Report

165

Notes
Balance sheet disclosures

Consolidated Financial Statements

BALANCE SHEET DISCLOSURES

Intangible assets

24.1 Overview

€ m

Cost

Balance at 1 January 2012

Additions from business combinations

Additions

Reclassifications

Disposals

Currency translation differences

Balance at 31 December 2012 / 1 January 2013

Additions from business combinations

Additions

Reclassifications

Disposals

Currency translation differences

Balance at 31 December 2013

Amortisation and impairment losses

Balance at 1 January 2012

Additions from business combinations

Amortisation

Impairment losses

Reclassifications

Reversals of impairment losses

Disposals

Currency translation differences

Balance at 31 December 2012 / 1 January 2013

Additions from business combinations

Amortisation

Impairment losses

Reclassifications

Reversals of impairment losses

Disposals

Currency translation differences

Balance at 31 December 2013

Carrying amount at 31 December 2013

Carrying amount at 31 December 2012

Internally
generated
intangible
assets

Purchased
brand names

Purchased
customer lists

Other
purchased
intangible
assets

Advance
payments and
intangible
assets under
development

Goodwill

1,049

481

942

1,423

12,108

– 57

–1

1,083

–30

–3

1,113

770

– 51

821

–28

–2

893

220

262

502

–12

490

446

457

–10

447

–2

944

–36

908

487

– 5

560

–26

592

316

384

134

– 92

–29

– 53

1,500

12,059

– 90

–35

1,480

–22

–294

11,774

1,057

1,135

119

– 5

–79

–3

1,095

1,137

118

–1

– 81

–26

1,122

358

405

– 5

–35

1,097

10,677

10,922

101

– 49

–7

134

126

–36

–1

223

222

133

Total

16,092

304

–185

– 43

16,222

244

–143

–380

15,988

3,896

294

–133

4,071

275

–114

– 99

4,152

11,836

12,151

Purchased software, concessions, industrial rights, licences
and similar rights and assets are reported under purchased intan-
gible assets. Internally generated intangible assets relate to develop-
ment costs for internally developed software. Other than goodwill,
only brand names that are acquired in their entirety are considered
to have indefinite useful lives.

The additions to goodwill are attributable to optivo GmbH
(€17 million), Compador Technologies (€4 million), RISER ID
(€5 million) and All you need (€5 million).

Of the net disposals of goodwill, €4 million relates to Cargus
International, €7 million to ITG Group and €6 million to Exel
Direct;

Note 2.

166

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

24.2 Allocation of goodwill to CGu s

€ m

Total goodwill

MaIL

eXpress

GLoBaL ForWarDInG, FreIGHt

DHL Global Forwarding

DHL Freight

suppLY CHaIn

DHL Supply Chain

Williams Lea

2012

2013

10,922

10,677

646

4,092

3,802

320

1,640

422

667

4,069

3,653

316

1,561

411

For the purposes of annual impairment testing in accordance
with IAS 36, the Group determines the recoverable amount of a
CGU on the basis of its value in use. This calculation is based on
projections of free cash flows that are initially discounted at a rate
corresponding to the post-tax cost of capital. Pre-tax discount rates
are then determined iteratively.

The cash flow projections are based on the detailed planning
for EBIT, depreciation / amortisation and investment planning
adopted by management, as well as changes in net working capital,
and take both internal historical data and external macroeconomic
data into account. From a methodological perspective, the detailed
planning phase covers a three-year planning horizon from 2014 to
2016. It is supplemented by a perpetual annuity representing the
value added from 2017 onwards. This is calculated using a long-
term growth rate, which is determined for each CGU separately
and which is shown in the table below. The growth rates applied
are based on long-term real growth figures for the relevant econ-
omies, growth expectations for the relevant sectors and long-term
inflation forecasts for the countries in which the CGU s operate. The
cash flow forecasts are based both on past experience and on the
effects of the anticipated future general market trend. In addition,
the forecasts take into account growth in the respective geograph-
ical submarkets and in global trade, and the ongoing trend towards
outsourcing logistics activities. Cost trend forecasts for the trans-
portation network and services also have an impact on value in use.
The pre-tax cost of capital is based on the weighted average
cost of capital. The (pre-tax) discount rates for the individual CGU s
and the growth rates assumed in each case for the perpetual annu-
ity are shown in the following table:

suppLY CHaIn

DHL Supply Chain

Williams Lea

GLoBaL ForWarDInG, FreIGHt

DHL Freight

DHL Global Forwarding

MaIL

eXpress

Discount rates

Growth rates

2012

2013

2012

2013

9.2

7.8

9.4

9.1

8.0

9.2

9.3

9.1

9.4

9.2

8.8

9.5

2.5

2.0

2.5

0.5

2.0

2.5

2.0

2.5

0.5

2.0

On the basis of these assumptions and the impairment tests
carried out for the individual CGU s to which goodwill was allo-
cated, it was established that the recoverable amounts for all CGU s
exceed their carrying amounts. No impairment losses were recog-
nised on goodwill in any of the CGU s as at 31 December 2013.

When performing the impairment test, Deutsche Post DHL
conducted sensitivity analyses as required by IAS 36.134. These
analyses did not reveal any risk of impairment to goodwill.

Deutsche Post DHL 2013 Annual Report

167

Notes
Balance sheet disclosures

Consolidated Financial Statements

25 Property, plant and equipment

25.1 Overview

€ m

Cost

Balance at 1 January 2012

Additions from business combinations

Additions

Reclassifications

Disposals

Currency translation differences

Balance at 31 December 2012 / 1 January 2013

Additions from business combinations

Additions

Reclassifications

Disposals

Currency translation differences

Balance at 31 December 2013

Depreciation and impairment losses

Balance at 1 January 2012

Additions from business combinations

Depreciation

Impairment losses

Reclassifications

Reversals of impairment losses

Disposals

Currency translation differences

Balance at 31 December 2012 / 1 January 2013

Additions from business combinations

Depreciation

Impairment losses

Reclassifications

Reversals of impairment losses

Disposals

Currency translation differences

Balance at 31 December 2013

Carrying amount at 31 December 2013

Carrying amount at 31 December 2012

Land
and buildings

Technical
equipment
and machinery

Other
equipment,
operating
and office
equipment

Vehicle fleet
and transport
equipment

Advance
payments and
assets under
development

Aircraft

4,489

4,291

2,479

1,707

2,040

–124

–3

4,540

214

–155

– 97

4,577

2,043

172

– 51

– 6

2,176

174

– 94

– 55

2,202

2,375

2,364

138

201

– 616

– 6

4,010

151

177

–197

– 89

4,065

3,085

241

–1

– 592

–3

2,732

249

–151

– 52

2,793

1,272

1,278

160

–168

– 6

2,520

189

–180

– 86

2,490

1,888

214

–157

–3

1,947

207

–166

– 66

1,924

566

573

116

402

–162

– 6

2,057

228

–150

–16

2,153

843

184

– 9

–147

–2

887

196

–1

–125

– 8

968

1,185

1,170

278

–238

2,114

283

–239

–30

2,158

1,097

206

–206

1,098

202

–207

–17

1,080

1,078

1,016

444

613

–782

–13

263

640

– 550

–10

– 4

339

338

262

Total

15,450

1,393

– 6

–1,321

–19

15,504

1,511

–1

– 931

–322

15,782

8,957

1,017

–10

–1,153

–13

8,841

1,028

–1

–743

–198

8,968

6,814

6,663

Advance payments relate only to advance payments on items
of property, plant and equipment for which the Group has paid
advances in connection with uncompleted transactions. Assets
under development relate to items of property, plant and equip-
ment in progress at the balance sheet date for whose production
internal or third-party costs have already been incurred.

168

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

25.2 Finance leases

The following assets are carried as non-current assets result-

ing from finance leases:

€ m

Land and buildings

Technical equipment and machinery

Other equipment, operating and office equipment

Aircraft

Vehicle fleet and transport equipment

Finance leases

2012

212

280

2013

155

160

330

The increase in land and buildings under finance leases is due
to newly leased delivery bases in Germany. Information on the
corresponding liabilities can be found under financial liabilities;

Note 46.3.

Investment property

26.1 Overview

€ m

Cost

At 1 January

Additions

Reclassifications

Disposals

Currency translation differences

At 31 December

Depreciation

At 1 January

Additions

Impairment losses

Disposals

Reclassifications

At 31 December

Carrying amount at 31 December

2012

2013

– 6

–2

–11

– 8

– 4

–2

The investment property largely comprises leased property
encumbered by heritable building rights, and developed and un-
developed land.

The reclassification to property, plant and equipment during
the year related to a property in Berlin that is used for business
purposes.

Rental income for investment property amounted to €1 mil-
lion (previous year: €3 million), whilst the related expenses were
less than €1 million (previous year: €3 million). The fair value
amounted to €74 million (previous year: €82 million).

26.2 Fair value measurement under IFrs 13

The following table shows the fair value of the investment
property measured using the valuation techniques. The term prop-
erty also covers undeveloped land.

Carrying
amount

Fair value

Level 1 1

Level 2 2

Level 3 3

–

Investment property at 31 December 2013

€ m

Property – Germany

Property – Angola

Property – USA

1 Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
2 Level 2: quoted market prices that are observable directly (as a price) or indirectly (derived from the price).
3 Level 3: inputs that are not based on observable market data.

Fair value is determined using the comparison, investment
and discounted cash flow (DCF) methods. The main inputs are
shown in the table below. Valuations are based on external and / or
internal expert opinions as well as offered quotes. In some cases,
inputs are based on criteria such as the size, age and condition of
the land and buildings, the local economy and comparable prices,
and are adjusted accordingly.

Deutsche Post DHL 2013 Annual Report

169

Notes
Balance sheet disclosures

Consolidated Financial Statements

Information on fair value measurement: 2013

Developed land – Germany

Leased property encumbered by heritable building
rights – Germany

Warehouse – Germany

Property – Angola

Property – USA

Fair value
€ m

Valuation technique

Comparison method

Investment method

DCF method

Offered quotes

Inputs

Input range

Weighted average

Price per m 2

€270 – €470 / m 2

€370 / m 2

Price per m 2

Expected
rental income

–

€650 thousand p. a.
less expenses

–

Comparison method

Price per acre

US$90 thousand –
115 thousand / acre US$105 thousand / acre

There were no transfers between levels in financial year 2013.

Aggregate balance sheets

Investments in associates

Investments in associates changed as follows:

€ m

Assets

Liabilities and provisions

At 1 January

Additions

Changes in Group’s share of equity

Changes recognised in profit or loss

Profit distributions

Reclassified to current assets

Carrying amount at 31 December

2012

–1

–2

2013

28 Non-current financial assets

€ m

Available-for-sale financial assets

Loans and receivables

Assets at fair value through profit or loss

Lease receivables

Non-current financial assets

2012

469

373

2013

450

453

2012

162

737

115

1,039

2013

256

729

107

1,124

Investments in associates principally relate to Air Hong
Kong Ltd, China, Danzas AEI Emirates LLC, United Arab Emirates,
Tasman Cargo Airlines Pty. Limited, Australia, and DHL Oman.
The complete list of the Group’s shareholdings in accordance with
section 313 (2) nos. 1 to 4 and section 313 (3) of the HGB can be
accessed online at

www.dpdhl.com/en/investors.html.
The following tables show a summary of the aggregate income
statements and balance sheets of the associates. The amounts do
not relate to the shares attributable to Deutsche Post DHL, but are
presented based on a notional 100 % shareholding.

Aggregate results

€ m

Revenue

Net profit for the year

2012

646

2013

667

Write-downs of non-current financial assets amounting
to €4 million (previous year: €6 million) were recognised in the
income statement because the assets were impaired. All €4 million
(previous year: €6 million) is attributable to assets at fair value
through profit or loss.

Compared with the market rates of interest prevailing at
31 December 2013 for comparable non-current financial assets,
most of the housing promotion loans are low-interest or interest-
free loans. They are recognised in the balance sheet at a present value
of €20 million (previous year: €26 million). The principal amount
of these loans totals €22 million (previous year: €27 million).
Details on restraints on disposal are contained in

Note 50.2.

170

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

29 Other non-current assets

€ m

Pension assets 1

Miscellaneous

Other non-current assets

1 Prior-year amount adjusted

Note 4.

1 Jan. 2012

162

118

280

2012

198

100

298

2013

120

184

Further information on pension assets can be found in

Note 44.

30 Deferred taxes

€ m

Deferred tax assets 1

Deferred tax liabilities 1

1 Prior-year amount adjusted

Note 4.

1 Jan. 2012

1,206

186

2012

1,328

156

2013

1,327

124

€ m

Intangible assets

Property, plant and
equipment

Non-current financial assets

Other non-current assets

Other current assets

Provisions

Financial liabilities

Other liabilities

Tax loss carryforwards

Gross amount

Netting

Carrying amount

2012

2013

Assets

Liabilities

Assets

Liabilities

295

124

104

861

1,577

–249

1,328

173

–

405

–249

156

110

358

150

839

1,639

–312

1,327

171

–

436

–312

124

€738 million (previous year: €602 million) of the deferred
taxes on tax loss carryforwards relates to tax loss carryforwards in
Germany and €101 million (previous year: €259 million) to foreign
tax loss carryforwards. The decrease in deferred taxes recognised
for foreign tax loss carryforwards results from a more detailed
analysis of the allocation of usable deferred tax assets in the USA to
temporary differences or tax loss carryforwards.

No deferred tax assets were recognised for tax loss carry-
forwards of around €11.2 billion (previous year: €11.9 billion) and
for temporary differences of around €4,113 million (previous year:
€4,184 million), as it can be assumed that the Group will probably
not be able to use these tax loss carryforwards and temporary dif-
ferences in its tax planning.

Most of the tax loss carryforwards are attributable to Deutsche
Post AG. It will be possible to utilise them for an indefinite period
of time. In the case of the foreign companies, the significant tax
loss carryforwards will not lapse before 2023.

Notes
Balance sheet disclosures

Deferred taxes have not been recognised for temporary dif-
ferences of €631 million (previous year: €563 million) relating to
earnings of German and foreign subsidiaries because these tempo-
rary differences will probably not reverse in the foreseeable future.

Maturity structure

€ m

2013

Deferred
tax assets

Deferred
tax liabilities

2012

Deferred
tax assets

Deferred
tax liabilities

Short-term

Long-term

Netting

Total

486

169

492

125

1,153

–312

1,327

267

–312

124

1,085

280

–249

1,328

156

Inventories

Standard costs for inventories of postage stamps and spare
parts in freight centres amounted to €15 million (previous year:
€15 million). There was no requirement to charge significant valu-
ation allowances on these inventories.

€ m

Raw materials, consumables and supplies

Work in progress

Finished goods and goods purchased and held
for resale

Spare parts for aircraft

Advance payments

Inventories

32 Current financial assets

€ m

Available-for-sale financial assets

Loans and receivables

Financial assets at fair value through profit or loss

Lease receivables

Current financial assets

2012

184

322

2012

109

252

2013

183

126

403

2013

611

140

821

The increase in current financial assets is attributable to the

investment of excess funds in money market funds.

Of the available-for-sale financial assets, €611 million (pre-
vious year: €24 million) was measured at fair value. Details on
restraints on disposal are contained in

Note 50.2.

Deutsche Post DHL 2013 Annual Report

171

Notes
Balance sheet disclosures

33 Trade receivables

€ m

Trade receivables 1

Deferred revenue

Receivables from Group companies

Trade receivables

1 Prior-year amount adjusted

Note 4.

34 Other current assets

€ m

Prepaid expenses

Current tax receivables

Receivables from private postal
agencies

Income from cost absorption

Creditors with debit balances

Receivables from loss compensation
(recourse claims)

Receivables from employees

Receivables from insurance business

Receivables from sale of assets

Receivables from cash-on-delivery

Receivables from Bundes-Pensions-
Service für Post und Telekommu-
nikation e. V.

Miscellaneous other assets

Other current assets

1 Prior-year amounts adjusted

Note 4.

1 Jan. 2012

6,426

481

6,934

2012

6,418

534

6,959

2013

6,507

528

7,040

1 Jan. 2012 1

2012 1

679

491

148

2013

634

490

157

672

586

648

2,155

Consolidated Financial Statements

Of the tax receivables, €366 million (previous year: €373 mil-
lion) relates to VAT, €83 million (previous year: €68 million) to
customs and duties, and €41 million (previous year: €50 million)
to other tax receivables. Miscellaneous other assets include a large
number of individual items.

35 Income tax assets and liabilities

€ m

Income tax assets

Income tax liabilities

2012

127

534

2013

168

430

All income tax assets and liabilities are current and have

maturities of less than one year.

36 Cash and cash equivalents

€ m

Cash equivalents

Bank balances / cash in transit

Cash

Other cash and cash equivalents

Cash and cash equivalents

2012

884

1,430

2013

2,078

1,222

2,400

3,417

656

2,153

755

2,221

37 Assets held for sale and liabilities associated with assets

held for sale

37.1 Overview

The amounts reported under this item mainly relate to the

following:

€ m

Deutsche Post AG – real estate (Corporate Center / Other)

Deutsche Post DHL Corporate Real Estate Management GmbH & Co. Logistikzentren KG, Germany –
real estate (Corporate Center / Other)

Exel Inc., USA – real estate (SUPPLY CHAIN segment)

DHL Fashion (France) SAS, France – fashion logistics (SUPPLY CHAIN segment)

Investment in All you need GmbH, Germany – (MAIL segment)

DHL Logistics (China) Co. Ltd., China – real estate (SUPPLY CHAIN segment)

Cargus International S. R. L., Romania – domestic express business (EXPRESS segment)

Deutsche Post Immobilien GmbH, Germany – real estate (Corporate Center / Other)

US Express Aviation, USA – aircraft (EXPRESS segment)

Assets held for sale and liabilities associated with assets held for sale

Assets

2013

Liabilities

2012

2013

2012

The sales of Cargus International, ITG Group, Exel Direct Inc.

and DHL Fashion (France) were completed;

Note 2.

172

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

DeutsCHe post aG

Deutsche Post AG plans to sell two properties in Groß-
zöberitz-Heideloh and Berlin. The most recent appraisal of the
assets prior to reclassification did not result in any impairment.

DeutsCHe post DHL Corporate reaL estate ManaGeMent
GMBH & Co. LoGIstIkzentren kG

The company plans to sell a property in Hamburg. The assets
and liabilities were reclassified as held for sale in accordance with
IFRS 5. The most recent appraisal of the assets prior to reclassifica-
tion did not result in any impairment.

eXeL InC.

The company plans to sell two commercial buildings and an

industrial site in Pennsylvania.

aLL You neeD GMBH

In the third quarter of 2013, the Board of Management
resolved not to pursue its plan to resell All you need GmbH, Berlin,
which was acquired in financial year 2012. The company has been
Note 2.
fully consolidated. Detailed information can be found in

37.2 Fair value measurement under IFrs 13

In accordance with IFRS 5, assets held for sale and liabilities
associated with assets held for sale are no longer depreciated or
amortised, but are recognised at the lower of their fair value less
costs to sell and their carrying amount.

The following table shows how the fair values were measured

on a non-recurring basis using different inputs.

Assets held for sale and liabilities associated with assets held for sale
at 31 December 2013

€ m

Deutsche Post AG – real estate

Deutsche Post DHL Corporate Real
Estate Management GmbH & Co.
Logistikzentren KG, Germany –
real estate

Exel Inc., USA – real estate

Level 1 1

Level 2 2

Level 3 3

–

1 Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
2 Level 2: quoted market prices that are observable directly (as a price) or indirectly

(derived from the price).

3 Level 3: inputs that are not based on observable market data.

The fair values of the properties held for sale by Deutsche
Post AG and Deutsche Post DHL Corporate Real Estate Manage-
ment GmbH & Co. Logistikzentren KG are determined on the
basis of level 3 inputs. These are quotes offered by potential buyers.
External expert appraisals are available to determine the fair
value of the land and buildings held for sale in the USA. The com-
parison method is used to determine fair value. The inputs which
are assigned to level 2 are partly based on criteria such as the size,
age and condition of the land and buildings, the local economy
and comparable prices, and are adjusted accordingly. The principal
input is the price per acre.

There were no transfers between levels in financial year 2013.

38 Issued capital

38.1 Share capital

The convertible bond on Deutsche Post AG shares issued
by KfW Bankengruppe (KfW) had been fully converted by the
end of July 2013. KfW held a 21 % interest in the share capital of
Deutsche Post AG as at 13 December 2013 (previous year: 25.5 %);
the remaining 79 % of the shares are in free float (previous year:
74.5 %). KfW holds the shares in trust for the federal government.

Share ownership at 31 December

number of shares

KfW

Free float

2012

2013

308,277,358

253,861,436

900,738,516

955,154,438

Share capital at 31 December

1,209,015,874

38.2

Issued capital and purchase of treasury shares

The issued capital amounts to €1,209 million. It is composed
of 1,209,015,874 no-par value registered shares (ordinary shares)
with a notional interest in the share capital of €1 per share and is
fully paid up.

Changes in issued capital

€

At 1 January

Treasury shares acquired

Treasury shares issued

At 31 December

2012

2013

1,209,015,874

–1,770,503

–1,313,727

1,770,503

1,313,727

1,209,015,874

Deutsche Post DHL 2013 Annual Report

173

Notes
Balance sheet disclosures

Consolidated Financial Statements

Deutsche Post AG acquired 1.3 million shares at a total price
of €23.5 million, including transaction costs, in a number of trans-
actions in order to settle entitlements due under the bonus pro-
gramme for executives (Share Matching Scheme). In addition to
the 2012 tranche, this includes 14 thousand shares issued to persons
who have since left the Group. Consequently, issued capital was
reduced by the notional value of the shares purchased. The average
purchase price per share was €17.94. The issued capital increased
again when the shares were issued to the executives.

The notional value of the treasury shares is deducted from
issued capital, and the difference between the notional value and
the reported value of the treasury shares is deducted from retained
earnings.

Changes in treasury shares are presented in the statement of

changes in equity.

Contingent Capital 2011

In its resolution dated 25 May 2011, the Annual General
Meeting authorised the Board of Management, subject to the
consent of the Supervisory Board, to issue bonds with warrants,
convertible bonds and / or income bonds as well as profit partici-
pation certificates, or a combination thereof, in an aggregate prin-
cipal amount of up to €1 billion, on one or more occasions until
24 May 2016, thereby granting options or conversion rights for up
to 75 million shares with a proportionate interest in the share capi-
tal not to exceed €75 million.

Based on this authorisation, Deutsche Post AG issued a €1 bil-
lion convertible bond on 6 December 2012, allowing holders to
convert the bond into up to 48 million Deutsche Post AG shares.
Full use was made of the authorisation by issuing the bond. The
share capital is increased on a contingent basis by up to €75 million.

Authorised / contingent capital at 31 December 2013

Contingent Capital 2013

Amount

€ m Purpose

Increase in share capital
against cash / non-cash
contributions
(until 20 April 2014)

–

Increase in share capital
against cash / non-cash
contributions
(until 28 May 2018)

Issue of options / conversion
rights (24 May 2016)

Issue of options / conversion
rights (28 May 2018)

240

Authorised Capital 2009

Authorised Capital 2013

Contingent Capital 2011

Contingent Capital 2013

Authorised Capital 2009

As resolved by the Annual General Meeting on 21 April 2009,
the Board of Management was authorised, subject to the consent
of the Supervisory Board, to issue up to 240 million new, no-par
value registered shares until 20 April 2014 in exchange for cash
and / or non-cash contributions and thereby increase the company’s
share capital. Shareholders generally have subscription rights. To
date, the Board of Management has not made use of such author-
isation. Since this authorisation lapses on 20 April 2014, the An-
nual General Meeting on 29 May 2013 resolved to replace it with a
new authorisation for the same amount (Authorised Capital 2013).

In its resolution dated 29 May 2013, the Annual General
Meeting authorised the Board of Management, subject to the
consent of the Supervisory Board, to issue bonds with warrants,
convertible bonds and / or income bonds as well as profit partici-
pation certificates, or a combination thereof, in an aggregate prin-
cipal amount of up to €1.5 billion, on one or more occasions until
28 May 2018, thereby granting options or conversion rights for up
to 75 million shares with a proportionate interest in the share cap-
ital not to exceed €75 million. The share capital is increased on a
contingent basis by up to €75 million.

38.3 Authorisation to acquire treasury shares

By way of a resolution adopted by the Annual General
Meeting on 28 April 2010, the company is authorised to acquire
treasury shares in the period to 27 April 2015 of up to 10 % of the
share capital existing when the resolution was adopted. The author-
isation permits the Board of Management to exercise it for every
purpose permitted by law, and in particular to pursue the goals
mentioned in the resolution by the Annual General Meeting.

At the Annual General Meeting on 9 May 2012, the author-
isation to acquire treasury shares was supplemented. In future,
treasury shares acquired on the basis of the authorisation, with
shareholders’ subscription rights disapplied, may also be used for
the purposes of listing on a stock exchange outside Germany.

In addition, the Board of Management is authorised to acquire

Authorised Capital 2013

treasury shares using derivatives.

As on 31 December 2012, Deutsche Post AG did not hold any

treasury shares on 31 December 2013.

As resolved by the Annual General Meeting on 29 May 2013,
the Board of Management is authorised, subject to the consent of
the Supervisory Board, to issue up to 240 million new, no-par value
registered shares until 28 April 2018 in exchange for cash and / or
non-cash contributions and thereby increase the company’s share
capital. Shareholders generally have subscription rights. However,
subject to the approval of the Supervisory Board, the Board of
Management may disapply the shareholders’ subscription rights to
the shares covered by the authorisation.

174

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

38.4 Disclosures on corporate capital

The equity ratio was 28.3 % in financial year 2013 (previous
year, adjusted: 27.3 %). The company’s capital is monitored using
the net gearing ratio which is defined as net debt divided by the
total of equity and net debt.

40 Other reserves

€ m

IFRS 3 revaluation reserve

IAS 39 revaluation reserve

IAS 39 hedging reserve

Currency translation reserve

Other reserves

1 Prior-year amounts adjusted

Note 4.

40.1

IFrs 3 revaluation reserve

1 Jan. 2012 1

2012 1

2013

–34

– 517

– 456

–1

–7

– 470

– 475

– 926

– 819

€ m

At 1 January

Changes recognised in other comprehensive income

IFrs 3 revaluation reserve at 31 December

2012

2013

–2

–1

2012

4,776

–2,400

–252

– 57

–115

1,952

9,228

11,180

17.5

2013

5,881

–3,417

– 821

– 55

–107

1,481

10,048

11,529

12.8

2012

2,170

2013

2,254

The IFRS 3 revaluation reserve includes the hidden reserves
of DHL Logistics Co. Ltd., China, from purchase price allocation.
These are attributable to the customer relationships contained in the
50 % interest held previously and to adjustments to deferred taxes.

40.2

Ias 39 revaluation reserve

The revaluation reserve comprises gains and losses from
changes in the fair value of available-for-sale financial assets that
have been recognised in other comprehensive income. This reserve
is reversed to profit or loss either when the assets are sold or other-
wise disposed of, or if their value is significantly or permanently
impaired.

–24

–20

€ m

At 1 January

Corporate capital

€ m

Total financial liabilities

Less cash and cash equivalents

Less current financial assets

Less long-term deposits

Less non-current derivative financial instruments

Net debt

Plus total equity

Total capital

Net gearing ratio (%)

39 Capital reserves

€ m

Capital reserves at 1 January

Share Matching Scheme

Addition / issue of rights
under Share Matching Scheme

2009 tranche

2010 tranche

2011 tranche

2012 tranche

2013 tranche

Exercise of rights under Share Matching Scheme

2011 tranche

2012 tranche

Conversion right

Capital reserves at 31 December

2,254

2,269

Currency translation differences

An amount of €35 million (31 December 2012: €34 million)
was transferred to the capital reserves in the period up to 31 Decem-
ber 2013 for the various tranches of the Share Matching Scheme.

The exercise of the rights to shares under the 2012 tranche
reduced the capital reserves by €20 million (previous year: €24 mil-
lion for the 2011 tranche) due to the issuance of treasury shares in
this amount to the executives.

On issue of the convertible bond on Deutsche Post AG shares,

the conversion right was recognised in capital reserves;

Note 46.

Unrealised gains / losses

Share of associates

Realised gains / losses

Ias 39 revaluation reserve at 31 December
before tax

Deferred taxes

Ias 39 revaluation reserve at 31 December
after tax

2012

–12

– 81

–1

2013

– 9

Deutsche Post DHL 2013 Annual Report

175

Notes
Balance sheet disclosures

Consolidated Financial Statements

40.3

Ias 39 hedging reserve

The hedging reserve is adjusted by the effective portion of a
cash flow hedge. The hedging reserve is reversed to profit or loss
when the hedged item is settled.

€ m

At 1 January

Additions

Disposals in balance sheet (basis adjustment)

Disposals in income statement

Ias 39 hedging reserve at 31 December before tax

Deferred taxes

Ias 39 hedging reserve at 31 December after tax

2012

–39

–29

–3

– 4

–7

2013

–3

111

– 49

–22

The change in the hedging reserve is mainly the result of the
recognition of previously unrealised gains and losses from hedging
future operating currency transactions. In the financial year, un-
realised losses totalling €25 million and unrealised gains totalling
€75 million from the hedging reserve were recognised in operat-
ing profit (previous year: unrealised losses of €60 million and un-
realised gains of €1 million). There were no disposals in net finance
costs in financial year 2013, as in the previous year, and no adjust-
ing entries (basis adjustments) for hedging transactions related to
the acquisition of non-current non-financial assets (previous year:
€6 million). Deferred taxes have been recognised in respect of the
hedging reserve.

40.4 Currency translation reserve

The currency translation reserve includes the translation
gains and losses from the consolidation of the subsidiaries report-
ing in foreign currency.

€ m

At 1 January

Transactions with non-controlling interests

Comprehensive income

Changes from unrealised gains and losses 1

Changes from realised gains and losses 1

2012 1

– 517

–2

Currency translation reserve at 31 December

– 470

1 Prior-year amounts adjusted

Note 4.

2013

– 470

– 5

– 453

– 926

41 Retained earnings

As well as the undistributed consolidated profits generated in
prior periods, retained earnings also contain the effects from trans-
actions with non-controlling interests. Changes in the reserves dur-
ing the financial year are also presented in the statement of changes
in equity.

€ m

At 1 January

Dividend payment

Consolidated net profit for the period

Transactions with non-controlling interests

Change due to remeasurements of net
pension provisions

Miscellaneous other changes

Retained earnings at 31 December

1 Prior-year amounts adjusted

Note 4.

2012 1

6,366

– 846

1,640

–1,190

6,031

2013

6,031

– 846

2,091

– 61

–15

–2

7,198

For information on the change due to remeasurements of net

pension provisions, see

Note 4.

The dividend payment to Deutsche Post AG shareholders of
€846 million was made in May 2013. This corresponds to a divi-
dend of €0.70 per share.

The transactions with non-controlling interests reported in
the current financial year include an option to acquire the remain-
ing 40 % interest in Giorgio Gori Group, Italy, and the acquisition
of the remaining 49.9 % interest in Tradeteam Limited, UK.

In the previous year, these transactions comprised the sale of
6.03 % of the shares in Blue Dart Express Limited, India, in which
the previous interest was 81.03 %, and the acquisition of the re-
maining 24 % interest in DHL Logistics Private Limited, India.

Changes in treasury shares are presented in the statement of

changes in equity.

42 Equity attributable to Deutsche Post aG shareholders

The equity attributable to Deutsche Post AG share holders
in financial year 2013 amounted to €9,857 million (1 January
2012,
adjusted: €9,289 million; 31 December 2012, adjusted:
€9,019 million).

Dividends

Dividends paid to the shareholders of Deutsche Post AG
are based on the net retained profit of €1,726 million reported in
Deutsche Post AG’s annual financial statements in accordance with
the Handelsgesetzbuch (HGB – German Commercial Code). The
amount of €759 million remaining after deduction of the planned
total dividend of €967 million (which corresponds to €0.80 per
share) will be carried forward; see also

Note 59.

Dividend distributed in financial year 2013
for the year 2012

Dividend distributed in financial year 2012
for the year 2011

Total dividend
€ m

846

Dividend
per share
€

0.70

The dividend is tax-exempt for shareholders resident in Ger-
many. No capital gains tax (investment income tax) will be with-
held on the distribution.

176

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

43 Non-controlling interests

€ m

Non-controlling interests 1

1 Prior-year amount adjusted

Note 4.

1 Jan. 2012 1

189

2012

209

2013

191

This balance sheet item includes adjustments for the interests
of non-Group shareholders in the consolidated equity from acqui-
sition accounting, as well as their interests in profit or loss. The
interests relate primarily to the following companies:

€ m

DHL Sinotrans International Air Courier Ltd., China

Blue Dart Express Limited, India

Tradeteam Limited, UK

Other companies

Non-controlling interests

1 Prior-year amounts adjusted

Note 4.

2012 1

107

209

2013

115

191

The remaining interest in Tradeteam Limited, UK, was

acquired in financial year 2013.

The portion of other comprehensive income attributable to
non-controlling interests largely relates to the currency translation
reserve. The changes are shown in the following table:

€ m

Balance at 1 January

Transactions with non-controlling interests

Comprehensive income

Changes from unrealised gains and losses

Changes from realised gains and losses

Currency translation reserve at 31 December

2012

– 5

–2

– 5

2013

– 5

–11

44 Provisions for pensions and similar obligations

€ m

Provisions for pensions and similar
obligations

1 Prior-year amount adjusted

Note 4.

1 Jan. 2012 1

2012 1

2013

6,055

5,216

5,017

The Group’s most important defined benefit retirement plans

are in Germany and the UK.

In Germany, Deutsche Post AG has an occupational retire-
ment plan dating back to 1997 based on a collective agreement,
which is open to new hourly workers and salaried employees. The
plan is based on fixed benefit amounts and provides for monthly
payments as from the statutory retirement age, depending on
length of service and the wage / salary level achieved.

Notes
Balance sheet disclosures

Annual increases in the fixed amounts during the service
period and in the pension payments are linked to agreed per-
centages, i. e., 1.45% for hourly workers and salaried employees
actively employed and 1.00% for retirees. The plan also provides
for invalidity benefits and surviving dependents’ benefits. Negative
past service cost was recognised in the reporting year due to an
internal change in the conditions for access to certain invalidity
benefits. Retirement plans with a similar structure are available
to executives below the management board level and to specific
employee groups who can make use of deferred compensation.

The large majority of Deutsche Post AG’s obligations relates to
the vested entitlements of hourly workers and salaried employees
on the transition date in 1997 and to legacy pension commit-
ments towards former hourly workers and salaried employees
who had left or retired from the company by the transition date.
The amounts individually determined for the vested entitlements
of the salaried employees and wage earners actively employed is
subject to an annual rate of increase of 1.45%. These retirement
plans are based on the Betriebsrentengesetz (BetrAVG – German
Occupational Pension Act), in addition to collective agreements
and other plan documents. The prime source of external funding
is a captive trust that also services a support fund and a pension
fund. The trust is funded on a case-by-case basis in line with the
Group’s finance strategy and, in the case of the support fund, on
an ongoing basis in line with tax law options. In the case of the
pension fund the supervisory funding requirements are, in prin-
ciple, met without additional employer contributions. The support
fund’s governing bodies include both Deutsche Post AG employees
and former employees. Part of the plan assets is invested in real
estate that is leased out to the Group on a long-term basis. In
addition, some of the legacy pension commitments use Ver sor-
gungs anstalt der Deutschen Bundespost (VAP), a joint pension fund
operated by the Deutsche Bundespost successor companies.

Individual subsidiaries in Germany have retirement plans
that were acquired in the context of acquisitions and transfers of
oper ations and that are closed to new entrants.

In the UK, the Group’s defined benefit plans have largely
been closed to new entrants for a number of years. In addition,
Deutsche Post DHL committed itself to a change in its pension
strategy in the UK on 26 November 2013. The plans will also largely
be closed for further service accrual as of 1 April 2014. As a result,
negative past service cost was recognised in financial year 2013 as
shown in the tables below ( before closure costs and transitional pay-
ments). With effect from 1 April 2014, the employees affected will
be able to participate in a defined contribution plan. The majority
of the (defined benefit) plans have been consolidated into a single
plan with different sections for the participating divisions. These
are largely funded via a master trust. The amount of the employer
contributions must be negotiated with the trustee in the course of
funding valuations. The trustee’s directors are Group employees,
former employees and non-Group third parties, all of whom are
required to be independent. At present, eligible employees make
their own contributions to retirement plan funding or waive a
portion of their salary. These (defined benefit) plans are based
primarily on the corresponding trust agreements and the UK
Pensions Act.

Deutsche Post DHL 2013 Annual Report

177

Notes
Balance sheet disclosures

Consolidated Financial Statements

A wide variety of other defined benefit plans in the Group are
to be found in the Netherlands, Switzerland, the USA and a large
number of other countries.

In the Netherlands, collective agreements require that those
employees who are not covered by a sector-specific plan participate
in a dedicated defined benefit plan. This final salary scheme pro-
vides for monthly pension payments that increase in line with the
agreed salary increases on the one hand and the funds available for
such increases on the other.

In Switzerland, employees receive an occupational pension in
line with statutory requirements, depending on the contributions
paid, an interest rate that is fixed each year, certain annuity factors
and any pension increases specified.

In the USA, the companies’ defined benefit plans have been
closed to new entrants and accrued entitlements have been frozen.

The Group companies in these three countries primarily use
joint funding institutions within the Group. In the Netherlands
and in Switzerland, both employers and employees contribute
to plan funding. In the USA no contributions are currently made
to the companies’ defined benefit plans. There were no material
amendments, curtailments or settlements affecting the Group’s
defined benefit plans in the Other area.

Various risks arise in the context of defined benefit plans. Of
these risks, the interest rate risk and investment risk in particular
are still deemed to be significant.

The information below on pension obligations is broken

down into the following areas: Germany, UK and Other.

44.1 Calculation of the balance sheet items

The balance sheet items were arrived at as follows:

€ m

31 December 2013

Present value of defined benefit obligations at 31 December

Fair value of plan assets at 31 December

Surplus (–) / deficit (+) at 31 December

Effect of asset ceilings at 31 December

Net pension provisions at 31 December

Reported separately

Pension assets at 31 December

Provisions for pensions and similar obligations at 31 December

31 December 2012

Present value of defined benefit obligations at 31 December

Fair value of plan assets at 31 December

Surplus (–) / deficit (+) at 31 December

Effect of asset ceilings at 31 December

Net pension provisions at 31 December

Reported separately

Pension assets at 31 December

Provisions for pensions and similar obligations at 31 December

Germany

Other

Total

8,439

– 4,119

4,320

8,608

– 4,129

4,479

4,395

– 4,034

1,963

–1,752

361

362

380

211

215

102

317

4,116

–3,936

2,051

–1,693

180

181

120

301

358

436

14,797

– 9,905

4,892

4,897

120

5,017

14,775

– 9,758

5,017

5,018

198

5,216

In the Other area, the Netherlands, Switzerland and the USA
account for a share in the present value of the defined benefit obli-
gations of 42 %, 24 % and 11%, respectively (31 December 2012: 40 %,
24 % and 13 %).

Additionally, rights to reimbursement from former Group
companies existed in the Group in Germany in the amount of
around €14 million (largely unchanged year-on-year) which are
reported separately. Consequently, benefit payments are being
made directly by the former Group companies.

178

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

44.2 Present value of defined benefit obligations

The present value of defined benefit obligations changed as

follows:

€ m

2013

Present value of defined benefit obligations at 1 January

Current service cost, excluding employee contributions

Interest cost on defined benefit obligations

Actuarial gains (–) / losses (+) – changes in demographic assumptions

Actuarial gains (–) / losses (+) – changes in financial assumptions

Actuarial gains (–) / losses (+) – experience adjustments

Past service cost

Settlement gains (–) / losses (+)

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Present value of defined benefit obligations at 31 December

2012

Present value of defined benefit obligations at 1 January

Current service cost, excluding employee contributions

Interest cost on defined benefit obligations

Actuarial gains (–) / losses (+) – changes in demographic assumptions

Actuarial gains (–) / losses (+) – changes in financial assumptions

Actuarial gains (–) / losses (+) – experience adjustments

Past service cost

Settlement gains (–) / losses (+)

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Present value of defined benefit obligations at 31 December

The key financial assumptions are as follows:

31 December 2013

Discount rate

Expected rate of future salary increase p. a.

Expected rate of future pension increase p. a.

31 December 2012

Discount rate

Expected rate of future salary increase p. a.

Expected rate of future pension increase p. a.

Deutsche Post DHL 2013 Annual Report

Germany

Other

Total

8,608

4,116

2,051

14,775

111

314

–33

– 68

– 58

176

237

156

–75

– 471

–173

–3

8,439

7,474

357

1,106

– 87

4,395

3,951

191

–11

173

–150

– 480

–179

8,608

4,116

–103

–3

–77

–2

–1

–33

1,963

186

556

209

–15

–136

–721

–2

– 4

–120

14,797

1,835

13,260

170

–25

– 80

–1

2,051

156

622

1,449

–124

–739

14,775

Germany

Other

Total

3.75

2.50

2.00

3.70

2.50

2.00

4.50

2.96

4.50

3.50

2.80

3.48

2.12

1.06

3.19

2.35

1.07

3.94

3.06

2.20

3.85

2.77

2.14

179

Notes
Balance sheet disclosures

Consolidated Financial Statements

The discount rates for defined benefit obligations in the euro
zone and the UK were each derived from a yield curve comprising
the yields of AA rated corporate bonds. Country-specific factors
were taken into account. For other countries, the discount rate was
determined in a similar way, provided there was a deep market for
AA or AAA-rated corporate bonds. By contrast, government bond
yields were used for countries without a deep market for such
corporate bonds.

For the annual pension increases in Germany, agreed rates in
particular must be taken into account in addition to the assump-
tions shown. The effective weighted average therefore amounts to
1.00 % (2012: 1.00 %).

The key demographic assumptions made relate to life expec-
tancy and mortality. For the German Group companies, they were
calculated using the Richttafeln 2005 G mortality tables published
by Klaus Heubeck. Life expectancy for the British retirement plans
was based on the mortality rates used for the last funding valuation.
These are based on plan-specific mortality analyses and include an
allowance for an expected increase in future life expectancy. Other
countries used their own, current standard mortality tables.

If one of the key financial assumptions were to change, the
present value of the defined benefit obligations would change as
follows:

31 December 2013

Discount rate

Expected rate of future salary increase

Expected rate of future pension increase

These are effective weighted changes in the present value of
the various defined benefit obligations, e. g., taking into account
the largely fixed nature of pension increases for Germany.

A one-year increase in life expectancy for a 65-year-old
beneficiary would increase the present value of the defined benefit
obligations by 4.63 % in Germany and by 3.53 % in the UK. The cor-
responding increase for other countries would be 2.40 %, for a total
increase of 4.01 %.

When determining the sensitivity disclosures, the present
values were calculated using the same methodology used to cal-
culate the present values at the reporting date. The presentation
does not take into account interdependencies between the assump-
tions; rather, it supposes that the assumptions change in isolation.
This would be unusual in practice, since assumptions are often
correlated.

Change in
assumption

Change in present value
of defined benefit obligations

Germany

Other

Total

+ 1.00
–1.00

+ 0.50
– 0.50

–12.31
15.63

0.17
– 0.15

0.30
– 0.27

–16.14
19.58

1.06
–1.21

4.09
– 4.08

–13.41
17.20

1.44
–1.30

5.81
– 4.14

–13.59
17.01

0.60
– 0.62

2.15
–1.91

The weighted average duration of the Group’s defined benefit
obligations at 31 December 2013 was 14.3 years in Germany (pre-
vious year: 14.1 years) and 18.5 years in the UK (previous year: 17.5
years). In the other countries it was 15.5 years (previous year: 16.2
years), and in total it was 15.7 years (previous year: 15.3 years).

A total of 27.6 % (previous year: 27.2 %) of the present value
of the defined benefit obligations was attributable to future bene-
ficiaries still working for the company, 16.2 % (previous year: 15.7 %)
to future beneficiaries no longer with the company and 56.2 % (pre-
vious year: 57.1 %) to pensioners.

180

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

44.3 Fair value of plan assets

The fair value of the plan assets changed as follows:

€ m

2013

Fair value of plan assets at 1 January

Interest income on plan assets

Return on plan assets excluding interest income

Other administration costs in accordance with IAS 19.130

Employer contributions

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Fair value of plan assets at 31 December

2012

Fair value of plan assets at 1 January

Interest income on plan assets

Return on plan assets excluding interest income

Other administration costs in accordance with IAS 19.130

Employer contributions

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Fair value of plan assets at 31 December

The fair value of the plan assets can be broken down as follows:

€ m

31 December 2013

Equities

Fixed income securities

Real estate

Alternatives

Insurances

Cash

Other

Fair value of plan assets

31 December 2012

Equities

Fixed income securities

Real estate

Alternatives

Insurances

Cash

Other

Fair value of plan assets

Deutsche Post DHL 2013 Annual Report

Germany

Other

Total

4,129

153

143

3,936

168

– 6

–337

–173

4,119

2,106

101

– 9

2,122

–196

– 4

4,129

– 81

4,034

3,714

180

– 5

–178

3,936

1,693

9,758

–3

– 66

–2

–26

1,752

1,549

–3

–71

– 5

1,693

375

176

– 9

263

– 576

–2

–107

9,905

7,369

344

137

–17

2,258

– 445

–1

9,758

Germany

Other

Total

622

1,227

1,030

314

582

205

139

872

2,488

150

469

632

658

193

2,126

4,373

1,373

836

674

252

271

4,119

4,034

1,752

9,905

162

368

1,010

187

2,347

4,129

828

2,395

632

614

642

200

3,936

1,693

1,604

3,405

1,258

732

282

2,396

9,758

181

Notes
Balance sheet disclosures

Consolidated Financial Statements

Quoted prices in an active market exist for around 80 % (pre-
vious year: 85 %) of the total fair values of plan assets. Most of the
remaining assets for which no such quoted market prices exist are
attributable as follows: 12 % (previous year: 11 %) to real estate, 6 %
(previous year: 3 %) to insurances, 1 % (previous year: 1 %) to alter-
natives and 1 % (previous year: 0 %) to other. The majority of the
investments on the active markets are globally diversified, with
country-specific focus areas.

Real estate with a fair value of €1,016 million (previous year:
€995 million) is used by Deutsche Post AG itself. Otherwise, as in
the previous year, no plan assets were used by the Group and no
transferable own financial instruments were held as plan assets.

€ m

2013

Net pension provisions at 1 January

Service cost1

Net interest cost

Remeasurements

Employer contributions

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Net pension provisions at 31 December

2012

Net pension provisions at 1 January

Service cost1

Net interest cost

Remeasurements

Employer contributions

Employee contributions

Benefit payments

Settlement payments

Transfers

Acquisitions / divestitures

Currency translation effects

Net pension provisions at 31 December

1 Including other administration costs in accordance with IAS 19.130 from plan assets.

Asset-liability studies are performed at regular intervals
in Germany, the UK and, among other places, the Nether lands,
Switzer land and the USA to examine the match between assets and
liabilities; the strategic allocation of plan assets is adjusted in line
with this.

44.4 Effect of asset ceilings

In the UK and Switzerland, the plan rules for one retirement
plan in each case required a surplus to be capped to a certain extent
to reach the level of the present value of the benefits (asset ceiling).
Apart from this, asset ceilings had no effect as at 31 December 2013,
Table 44.1 for amounts and changes
as in the previous year. See
compared with the previous year.

44.5 Net pension provisions

Net pension provisions changed as follows:

Germany

Other

Total

4,479

161

–106

–143

–134

–3

4,320

5,368

256

1,148

–2,122

–284

181

–35

297

– 83

– 6

362

238

–17

– 93

–1

358

–141

–37

–11

–1

–7

215

287

– 43

– 9

4,479

181

358

5,018

181

–263

–145

– 4

–13

4,897

5,893

174

278

1,199

–2,258

–294

5,018

Payments amounting to €422 million are expected with
regard to net pension provisions in 2014. Of this amount, €206
million is attributable to the Group’s expected direct benefit pay-
ments and €216 million to expected employer contributions to
pension funds.

182

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

44.6 Components of defined benefit cost

The components of defined benefit cost are as follows:

€ m

2013

Current service cost, excluding employee contributions

Past service cost

Settlement gains (–) / losses (+)

Other administration costs in accordance with IAS 19.130

Service cost1

Interest cost on defined benefit obligations

Interest income on plan assets

Interest on the effect of asset ceilings

Net interest cost

Actuarial gains (–) / losses (+) – total

Return on plan assets excluding interest income

Change in effect of asset ceilings excluding interest

Remeasurements

Cost of defined benefit plans

2012

Current service cost, excluding employee contributions

Past service cost

Settlement gains (–) / losses (+)

Other administration costs in accordance with IAS 19.130

Service cost1

Interest cost on defined benefit obligations

Interest income on plan assets

Interest on the effect of asset ceilings

Net interest cost

Actuarial gains (–) / losses (+) – total

Return on plan assets excluding interest income

Change in effect of asset ceilings excluding interest

Remeasurements

Cost of defined benefit plans

Germany

Other

Total

111

– 58

314

–153

161

–76

–30

–106

108

357

–101

256

1,157

– 9

1,148

1,501

–75

–35

176

–168

393

– 96

297

270

191

–180

–29

–17

–3

– 54

– 95

– 50

–141

– 88

– 63

168

– 99

–1

119

186

–136

556

–375

181

222

–176

290

156

174

622

–344

278

1,337

–137

–1

1,199

1,651

1 Including other administration costs in accordance with IAS 19.130 from plan assets.

€59 million of the cost of defined benefit plans (previous year:
€174 million) related to staff costs, €181 million (previous year:
€278 million) to net other finance costs and €50 million (previous
year: €1,199 million) to other comprehensive income.

44.7 Risk

A number of risks that are material to the company and the
plans exist in relation to the defined benefit plans. Opportunities
for risk mitigation are used in line with the specifics of the plans
concerned.

InFLatIon rIsk

Pension obligations – especially final salary schemes or
schemes involving increases during the pension payment phase –
can be linked directly or indirectly to inflation. This risk to the
present value of the defined benefit obligations has been miti-
gat ed in the case of Germany, for example, by switching to a plan
involving fixed benefit amounts. In the case of the UK, the risk has
been mitigated by largely closing defined benefit plans, setting a
fixed rate of increase, capping increases or providing for lump sum
payments. Additionally, there is a positive correlation with interest.

Interest rate rIsk

A decrease (increase) in the discount rate would lead to an
increase (decrease) in the present value of the total obligation and
would in principle be accompanied by an increase (decrease) in the
fair value of the fixed income securities contained in the plan assets.
Other hedges are made, in some cases using derivatives.

Deutsche Post DHL 2013 Annual Report

183

Notes
Balance sheet disclosures

Consolidated Financial Statements

InvestMent rIsk

The investment is in principle subject to a large number of
risks; in particular, it is exposed to the risk that market prices may
change. This is managed primarily by ensuring broad diversifica-
tion and using risk overlays.

LonGevItY rIsk

Longevity risk may arise in connection with the benefits
payable in the future due to a future increase in life expectancy.
This is mitigated in particular by using current standard mortal-
ity tables when calculating the present value of the defined benefit
obligations. The mortality tables used in Germany and the UK, for
ex ample, include an allowance for expected future increases in life
expectancy.

1 Jan. 2012

2,117

2,134

4,251

2012

1,943

1,663

3,606

2013

1,574

1,745

3,319

45 Other provisions

€ m

Other non-current provisions 1

Other current provisions

Other provisions 1

1 Prior-year amount adjusted

Note 4.

€ m

Other employee benefits 1

Restructuring provisions

Technical reserves (insurance)

Postage stamps

Tax provisions

Miscellaneous provisions

1 Prior-year amount adjusted

Note 4.

45.1 Changes in other provisions

€ m

At 1 January 2013

Changes in consolidated group

Utilisation

Currency translation differences

Reversal

Unwinding of discount / changes in discount rate

Reclassification

Additions

At 31 December 2013

1 Prior-year amounts adjusted

Note 4.

Non-current

2013

745

109

402

318

1,574

2012 1

827

383

397

336

1,943

Current

2013

311

425

203

400

116

290

2012

253

298

194

450

127

341

2012

1,080

681

591

450

127

677

Total

2013

1,056

534

605

400

116

608

1,663

1,745

3,606

3,319

Other
employee
benefits 1

Restructuring
provisions

Technical
reserves
(insurance)

1,080

– 583

–17

–29

591

1,056

681

–146

–20

–79

–17

115

534

591

– 51

– 5

–20

– 6

605

Postage
stamps

450

– 450

400

Tax provisions

Miscellaneous
provisions

127

– 66

– 6

–25

116

677

–217

–18

– 97

254

608

Total

3,606

–1,513

– 66

–250

– 5

1,540

3,319

184

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

The provision for other employee benefits primarily covers
workforce reduction expenses (severance payments, transitional
benefits, partial retirement, etc.), stock appreciation rights (SAR s)
and jubilee payments.

Of the tax provisions, €35 million (previous year: €28 mil-
lion) relates to VAT, €5 million (previous year: €6 million) to cus-
toms and duties, and €76 million (previous year: €93 million) to
other tax provisions.

The restructuring provisions comprise all expenses resulting
from the restructuring measures within the US express business as
well as in other areas of the Group. These measures relate primarily
to settlement payment obligations assumed in the USA, rentals for
idle plant, termination benefits for employees (partial retirement
programmes, transitional benefits) and expenses from the closure
of terminals, for example.

Technical reserves (insurance) mainly consist of outstand-
ing loss reserves and IBNR reserves; further details can be found
in

Note 7.
The provision for postage stamps covers outstanding obli-
gations to customers for letter and parcel deliveries from postage
stamps sold but still unused by customers, and is based on studies
by market research companies. It is measured at the nominal value
of the stamps issued.

45.2 Miscellaneous provisions

€ m

Litigation costs

Risks from business activities

Aircraft maintenance

Miscellaneous other provisions

Miscellaneous provisions

2012

115

104

415

677

2013

369

608

Miscellaneous other provisions include a large number of

individual items.

45.3 Maturity structure

The maturity structure of the provisions recognised in finan-

cial year 2013 is as follows:

€ m

2013

Other employee benefits

Restructuring provisions

Technical reserves (insurance)

Postage stamps

Tax provisions

Miscellaneous provisions

46 Financial liabilities

€ m

Bonds

Due to banks

Finance lease liabilities

Liabilities to Group companies

Financial liabilities at fair value through profit or loss

Other financial liabilities

Financial liabilities

Less
than 1 year

More
than 1 year
to 2 years

More
than 2 years
to 3 years

More
than 3 years
to 4 years

More
than 4 years
to 5 years

More
than 5 years

311

425

203

400

116

290

1,745

281

163

120

584

2012

4,109

123

106

4,413

170

316

187

131

Non-current

Current

2013

4,164

194

184

4,612

2012

135

109

105

403

2013

924

198

133

1,328

143

356

2012

4,109

137

149

117

211

4,816

Total

1,056

534

605

400

116

608

3,319

Total

2013

5,088

199

213

317

5,940

Deutsche Post DHL 2013 Annual Report

185

Notes
Balance sheet disclosures

Consolidated Financial Statements

46.1 Bonds

The following table contains further details on the company’s
most significant bonds. The bonds issued by Deutsche Post
Finance B.V. are fully guaranteed by Deutsche Post AG.

Major bonds

Bond 2003 / 2014

Bond 2012 / 2017

Bond 2012 / 2022

Bond 2012 / 2020

Bond 2012 / 2024

Bond 2013 / 2018

Bond 2013 / 2023

Convertible bond 2012 / 2019 1

Nominal
coupon
%

4.875

1.875

2.950

1.875

2.875

1.5

2.75

0.600

Issue volume

Issuer

€926 million Deutsche Post Finance B.V.

€750 million Deutsche Post Finance B.V.

€500 million Deutsche Post Finance B.V.

€300 million Deutsche Post AG

€700 million Deutsche Post AG

€500 million Deutsche Post AG

€1 billion Deutsche Post AG

2012

2013

Carrying
amount
€ m

Fair value
€ m

Carrying
amount
€ m

Fair value
€ m

942

744

496

296

696

920

969

775

525

302

711

929

924

745

496

295

696

491

495

931

929

767

516

296

706

499

501

928

1 This relates to the debt component of the convertible bond; the equity component is recognised in capital reserves. The fair value of the listed

convertible bond was €1,353 million at the balance sheet date (previous year: €1,049 million).

46.2 Amounts due to banks

€ m

Amounts due to banks

2012

137

2013

199

The liabilities mainly comprise current overdraft facilities due

to various banks.

Deutsche Post DHL placed two conventional bonds amount-
ing to €1 billion with national and international investors. The issue
date was 9 October 2013. The capital raised is to be used to repay
a ten-year bond maturing in January 2014. The first issue in the
amount of €500 million has a maturity of five years and an annual
coupon of 1.5 %. The second €500 million issue has a maturity of
ten years and an annual coupon of 2.75 %.

The €1 billion convertible bond issued on 6 December 2012
has a conversion right, which allows holders to convert the bond
into a predetermined number of Deutsche Post AG shares if
Deutsche Post AG’s share price more than temporarily exceeds 130 %
of the conversion price applicable at that time. The conversion right
may be exercised between 16 January 2013 and 21 Novem ber 2019.
On issue, the conversion price was set at €20.74. In addition,
Deutsche Post AG was granted a call option allowing it to repay the
bond early at face value plus accrued interest if Deutsche Post AG’s
share price more than temporarily exceeds 130 % of the conversion
price applicable at that time. The option can be exercised between
6 December 2017 and 16 November 2019. For contractual reasons,
the convertible bond was split into a debt component and an equity
component. The equity instrument in the amount of €74 million
is reported under capital reserves. The value of the debt compo-
nent on the issue date calculated in accordance with IFRS 32.31
amounted to €920 million, including transaction costs and the call
option granted. Transaction costs of €0.5 million and €5.8 million
are included in the aforementioned amounts. In subsequent years,
interest will be added to the carrying amount of the bond, up to
the issue amount, using the effective interest method (unwinding
of discount) and recognised in profit or loss.

186

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Balance sheet disclosures

46.3 Finance lease liabilities

Finance lease liabilities mainly relate to the following items:

Leasing partner

Interest rate
(%)

End of term Asset

2012

Deutsche Post Immobilien GmbH, Germany

Various leasing partners

4.75

2023 / 2028 Real estate

DHL Express (Austria) GmbH, Austria

DHL Logistics GmbH, Germany

Deutsche Post AG, Germany

Deutsche Post Immobilien GmbH, Germany

DHL Express (US) Inc., USA

Raiffeisen Impuls Immobilien
GmbH

Fitia GmbH

T-Systems International GmbH

Lorac Investment Management
Sarl

Wachovia Financial Services;
Wells Fargo

SCM Supply Chain Management Inc., Canada

Bank of Nova Scotia

Variable

2012 / 2013

3.62

5.175

6.5

6.0

2019 Real estate

2016 Real estate

2015 IT equipment

2016 Real estate

6.74

2019 / 2022

Sorting system
software

Warehouse,
office
equipment

2013

114

The change in finance lease liabilities is attributable to the
early termination of a lease, as well as to leases entered into between
Deutsche Post Immobilien GmbH and various contract partners
for newly leased delivery bases in Germany.

The leased assets are recognised in property, plant and
equipment at carrying amounts of €330 million (previous year:
€280 million). The difference between the carrying amounts of
the assets and the liabilities results from longer useful lives of the
assets compared with a shorter repayment period for the lease
instal ments and unscheduled repayments of lease obligations. The
notional amount of the minimum lease payments totals €255 mil-
lion (previous year: €165 million).

46.4 Financial liabilities at fair value through profit or loss

The amounts reported under this item relate to the negative

fair values of derivative financial instruments.

€ m

Financial liabilities at fair value through profit
or loss

2012

117

2013

46.5 Other financial liabilities

€ m

Maturity structure

€ m

Less than 1 year

More than 1 year to 5 years

More than 5 years

Total

Present value
(finance lease liabilities)

Minimum lease payments
(notional amount)

2012

2013

2012

2013

149

101

213

165

116

115

255

Put option related to the acquisition of the remaining
interest in Giorgio-Gori Group

Loan notes related to the acquisition of TAG Group

Loan notes related to the early termination
of a finance lease

Miscellaneous financial liabilities

Other financial liabilities

2012

2013

154

211

182

317

The other financial liabilities relate to a large number of

individual items.

Deutsche Post DHL 2013 Annual Report

187

Notes
Balance sheet disclosures

47 Other liabilities

€ m

Other liabilities

Consolidated Financial Statements

Non-current

2012

276

2013

227

2012

4,004

Current

2013

3,981

2012

4,280

Total

2013

4,208

47.1 Breakdown of other liabilities

47.2 Maturity structure

€ m

Tax liabilities

Incentive bonuses

Wages, salaries, severance payments

Compensated absences

Deferred income, of which non-current: 61
(previous year: 71)

Payables to employees and members of executive
bodies

Social security liabilities

Debtors with credit balances

Liabilities from the sale of residential building loans,
of which non-current: 140 (previous year: 149)

Overtime claims

COD liabilities

Other compensated absences

Liabilities from cheques issued

Accrued rentals

Insurance liabilities

Accrued insurance premiums for damages
and similar liabilities

Liabilities from loss compensation

Miscellaneous other liabilities,
of which non-current: 26 (previous year: 56)

884

577

287

375

351

177

143

150

153

110

967

560

335

298

295

172

162

148

144

105

2012

2013

€ m

Less than 1 year

More than 1 year to 2 years

More than 2 years to 3 years

More than 3 years to 4 years

More than 4 years to 5 years

More than 5 years

2012

4,004

185

4,280

201 3

3,981

144

4,208

There is no significant difference between the carrying
amounts and the fair values of the other liabilities due to their short
maturities or market interest rates. There is no significant interest
rate risk because most of these instruments bear floating rates of
interest at market rates.

48 Trade payables

Trade payables also include liabilities to Group companies in

the amount of €46 million (previous year: €42 million).

€ m

822

4,280

808

4,208

Trade payables

2012

5,991

2013

6,392

Most of the trade payables have a maturity of less than one
year. The reported carrying amount of trade payables corresponds
to their fair value.

Of the tax liabilities, €544 million (previous year: €502 mil-
lion) relates to VAT, €269 million (previous year: €227 million) to
customs and duties, and €154 million (previous year: €155 million)
to other tax liabilities.

The liabilities from the sale of residential building loans relate
to obligations of Deutsche Post AG to pay interest subsidies to bor-
rowers to offset the deterioration in borrowing terms in conjunc-
tion with the assignment of receivables in previous years, as well as
pass-through obligations from repayments of principal and inter-
est for residential building loans sold.

Miscellaneous other liabilities include a large number of

individual items.

188

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Cash flow disclosures

CASH FLOW DISCLOSURES

49 Cash flow disclosures

The cash flow statement is prepared in accordance with IAS 7
(Statement of Cash Flows) and discloses the cash flows in order to
present the source and application of cash and cash equivalents.
It distinguishes between cash flows from operating, investing and
financing activities. Cash and cash equivalents are composed of
cash, cheques and bank balances with a maturity of not more than
three months, and correspond to the cash and cash equivalents
reported on the balance sheet. The effects of currency translation
and changes in the consolidated group are adjusted when calculat-
ing cash and cash equivalents.

49.1 Net cash from operating activities

Cash flows from operating activities are calculated by adjust-
ing consolidated net profit / loss for tax expenses, net financial in-
come / net finance costs and non-cash factors, as well as taxes paid,
changes in provisions and in other non-current assets and liabil-
ities (net cash from operating activities before changes in working
capital). Adjustments for changes in working capital (excluding
financial liabilities) result in net cash from or used in operating
activities.

In financial year 2013, the net cash from operating activities
amounted to €2,994 million compared with a net cash outflow
of €203 million in the previous year. This improvement is largely
attrib utable to the funding of pension obligations in the previous
year.

The depreciation, amortisation and impairment losses con-
tained in EBIT are non-cash effects and are therefore adjusted. At
€1,341 million, they remained at the previous year’s level. Also
adjusted were non-cash income and expenses, which reduced EBIT
by €16 million, but did not affect cash flows. They mainly relate to
expenses from the remeasurement of assets.

The gains on the disposal of non-current assets of €22 mil-
lion are not attributable to operating activities. They have therefore
been adjusted in the net income from the disposal of non-current
assets and are presented instead in the cash flows from investing
activities.

The higher working capital led to a net cash outflow of
€84 million. In the previous year, the change in this item resulted in
an outflow of €422 million. The change in liabilities and other items
in particular made a significant contribution to this development.

Non-cash income and expense

€ m

Expense from remeasurement of assets

Income from remeasurement of liabilities

Income from disposal of assets

Staff costs relating to Share Matching Scheme

Miscellaneous

Non-cash income and expense

2012

–203

–2

– 5

– 97

2013

122

–114

–11

–1

49.2 Net cash used in investing activities

Cash flows from investing activities mainly result from cash
received from disposals of non-current assets (divestitures) and
cash paid for investments in non-current assets.

Interest and dividends received from investing activities as
well as cash flows from changes in current financial assets are also
included.

At €1,772 million, net cash used in investing activities was
€75 million higher than in the previous year. The most significant
item was the cash paid to acquire property, plant and equipment,
and intangible assets, which was nonetheless €250 million lower
than in the previous year, at €1,389 million. The investment volume
was on a level with the previous year.

Although most of the capital expenditures had been capital-
ised towards the end of the year, the cash was only paid after the
balance sheet date. The investment of surplus liquidity in money
market funds was largely responsible for the net cash outflow from
changes in current financial assets of €575 million. By contrast, the
recognition of the demand for repayment of state aid in other non-
current financial assets reduced cash flow from investing activities
by €298 million in the previous year.

The following assets were acquired and liabilities assumed as

a result of company acquisitions; see also

Note 2:

€ m

Non-current assets

Current assets (excluding cash and cash equivalents)

Non-current provisions and liabilities

Current provisions and liabilities

2012

2013

Deutsche Post DHL 2013 Annual Report

189

Notes
Cash flow disclosures

Consolidated Financial Statements

The following table shows the calculation of free cash flow:

49.3 Net cash used in financing activities

Calculation of free cash flow

€ m

Net cash used in / from operating activities

Sale of property, plant and equipment
and intangible assets

Acquisition of property, plant and equipment
and intangible assets

Cash outflow arising from change in property,
plant and equipment and intangible assets

Disposals of subsidiaries and other business units

Acquisition of subsidiaries and other business units

Cash outflow arising from acquisitions /
divestitures

Interest received

Interest paid

Net interest paid

Free cash flow

2012

–203

225

2013

2,994

177

–1,639

–1,389

–1,414

–1,212

– 57

–18

–296

–250

–1,885

–37

– 5

–166

–124

1,653

Free cash flow is considered to be an indicator of how much
cash is available to the company for dividend payments or the
repay ment of debt.

Free cash flow improved from €–1,885 million in the previous
year to €1,653 million in the year under review. This is primarily
attributable to the improvement in operating cash flow, which
had been exceptionally and significantly reduced in the previous
year by the funding of pension obligations and the additional VAT
payment.

Financing activities led to a cash outflow of €110 million in
the year under review, compared with a cash inflow of €1,199 mil-
lion in the previous year.

Two bonds with maturities of five and ten years contributed
€495 million each to the €1,010 million in proceeds from the issu-
ance of non-current financial liabilities. In the previous year, the
issue of conventional corporate bonds and a convertible bond in
particular had contributed to proceeds of €3,176 million. In addi-
tion, €733 million was used to repay non-current financial liabilites
in the previous year.

At €846 million, the dividend payment to the share holders of
Deutsche Post AG remained at the prior-year level and was again
the largest payment in financing activities. However, interest pay-
ments were down €130 million year-on-year, at €166 million, due
to the interest payment related to the additional VAT payment in
the previous year.

Proceeds from issuing shares or other equity instruments
declined by €70 million to €4 million. The prior-year figure in-
cluded the equity component of the convertible bond.

49.4 Cash and cash equivalents

The cash inflows and outflows described above produced
Note 36. This repre-

cash and cash equivalents of €3,417 million;
sents a year-on-year increase of €1,017 million.

190

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

OTHER DISCLOSURES

50 Risks and financial instruments of the Group

50.1 Risk management

As a result of its operating activities, the Group is exposed
to financial risks that may arise from changes in exchange rates,
commodity prices and interest rates. Deutsche Post DHL man-
ages these risks centrally through the use of non-derivative and
derivative financial instruments. Derivatives are used exclusively
to mitigate non-derivative financial risks, and fluctuations in their
fair value should not be assessed separately from the underlying
transaction.

The Group’s internal risk guidelines govern the universe of
actions, responsibilities and necessary controls regarding the use
of derivatives. Financial transactions are recorded, assessed and
processed using proven risk management software, which also
regularly documents the effectiveness of hedging relationships.
Portfolios of derivatives are regularly reconciled with the banks
concerned.

In connection with the entry into force of the European
Market Infrastructure Regulation (EMIR), the Group reviewed and
adjusted its risk management processes: master agreements with
banks were amended and further internal controls on the use of
derivatives were introduced.

To limit counterparty risk from financial transactions, the
Group may only enter into this type of contract with prime-rated
banks. The conditions for the counterparty limits individually
assigned to the banks are reviewed on a daily basis. The Group’s
Board of Management is informed internally at regular inter-
vals about existing financial risks and the hedging instruments
deployed to mitigate them. Financial instruments are accounted
for and measured in accordance with IAS 39.

Liquidity management

The ultimate objective of liquidity management is to secure
the solvency of Deutsche Post DHL and all Group companies.
Consequently, liquidity in the Group is centralised as much as pos-
sible in cash pools and managed in the Corporate Center.

The centrally available liquidity reserves (funding availabil-
ity), consisting of central short-term financial investments and
committed credit lines, are the key control parameter. The target is
to have at least €2 billion available in a central credit line.

The Group had central liquidity reserves of €4.6 billion (previ-
ous year: €2.7 billion) as at 31 December 2013, consisting of central
financial investments amounting to €2.6 billion plus a syndicated
credit line of €2 billion.

The maturity structure of non-derivative financial liabilities

within the scope of IFRS 7 based on cash flows is as follows:

Maturity structure: remaining maturities

€ m

At 31 December 2013

Non-current financial liabilities

Other non-current liabilities

Non-current liabilities

Current financial liabilities

Trade payables

Other current liabilities

Current liabilities

At 31 December 2012

Non-current financial liabilities

Other non-current liabilities

Non-current liabilities

Current financial liabilities

Trade payables

Other current liabilities

Current liabilities

Less
than 1 year

More
than 1 year
to 2 years

More
than 2 years
to 3 years

More
than 3 years
to 4 years

More
than 4 years
to 5 years

More
than 5 years

1,299

6,392

346

8,037

106

297

5,991

462

6,750

156

167

1,031

1,035

233

236

849

852

662

664

811

814

3,379

130

3,509

2,758

137

2,895

On 9 October 2013, Deutsche Post AG placed two fixed-
coupon bonds worth a total of €1 billion on the capital market. The
bonds have a principal amount of €500 million each and matur-
ities of five and ten years, respectively. The issue proceeds are to

be used to repay the Deutsche Post Finance B.V. bond amounting
to €926 million falling due in January 2014. Until then, the funds
have been invested in short-term money market investments. The
bonds are reported in non-current financial liabilities.

Deutsche Post DHL 2013 Annual Report

191

Notes
Other disclosures

Consolidated Financial Statements

The maturity structure of the derivative financial instruments

based on cash flows is as follows:

Maturity structure: remaining maturities

€ m

At 31 December 2013

Derivative receivables – gross settlement

Cash outflows

Cash inflows

Net settlement

Cash inflows

Derivative liabilities – gross settlement

Cash outflows

Cash inflows

Net settlement

Cash outflows

At 31 December 2012

Derivative receivables – gross settlement

Cash outflows

Cash inflows

Net settlement

Cash inflows

Derivative liabilities – gross settlement

Cash outflows

Cash inflows

Net settlement

Cash outflows

Less
than 1 year

More
than 1 year
to 2 years

More
than 2 years
to 3 years

More
than 3 years
to 4 years

More
than 4 years
to 5 years

More
than 5 years

– 5,345

5,591

–389

403

–1,821

1,776

– 411

409

– 4

–1

– 5,210

5,422

– 616

663

– 4,922

4,803

– 440

430

–22

–3

– 46

–33

– 41

–37

Derivative financial instruments entail both rights and obli-
gations. The contractual arrangement defines whether these rights
and obligations can be offset against each other and therefore result
in a net settlement, or whether both parties to the contract will
have to perform their obligations in full (gross settlement).

CurrenCY rIsk anD CurrenCY ManaGeMent

The international business activities of Deutsche Post DHL
expose it to currency risks from recognised or planned future
transactions.

Balance sheet currency risks arise from the measurement and
settlement of items in foreign currencies that have been recognised
if the exchange rate on the measurement or settlement date dif-
fers from the rate on recognition. The resulting foreign exchange
differences directly impact profit or loss. In order to mitigate this

impact as far as possible, all significant balance sheet currency
risks within the Group are centralised at Deutsche Post AG through
the in-house bank function. The centralised risks are aggregated
by Corporate Treasury to calculate a net position per currency
and hedged externally based on value-at-risk limits. The currency-
related value at risk (95 % / one-month holding period) for the port-
folio concerned totalled €4 million (previous year: €3 million) at
the reporting date; the limit was a maximum of €5 million.

The notional amount of the currency forwards and currency
swaps used to manage balance sheet currency risks amounted to
€2,409 million at the reporting date (previous year: €4,370 mil-
lion); the fair value was €34 million (previous year: €42 million).
For simplification purposes, fair value hedge accounting was not
applied to the derivatives used, which are reported as trading
derivatives instead.

192

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

concerned was €4 million at the reporting date (previous year:
€3 million). In addition, hypothetical changes in exchange rates
affect equity and the fair values of those derivatives used to hedge
unrecog nised firm commitments and highly probable forecast cur-
rency transactions, which are designated as cash flow hedges. The
foreign currency value at risk of this risk position was €30 million as
at 31 December 2013 (previous year: €32 million). The total foreign
currency value at risk was €29 million at the reporting date (previ-
ous year: €35 million). The total amount is lower than the sum of
the individual amounts given above, owing to interdependencies.

Interest rate rIsk anD Interest rate ManaGeMent

The fair value of interest rate hedging instruments was calcu-
lated on the basis of discounted expected future cash flows using
Corporate Treasury’s risk management system.

As at 31 December 2013, the Group had entered into interest
rate swaps with a notional volume of €1,126 million (previous year:
€326 million). The fair value of this interest rate swap position was
€6 million (previous year: €23 million). As in the previous year,
there were no interest rate options at the reporting date.

The Group placed further fixed-coupon bonds on the cap-
ital market in financial year 2013. At the same time, the remaining
maturity of the bond falling due in January 2014 dropped to less
than one year and some of the original fixed-coupon bonds were
swapped for variable short-term interest rates. As a result, the share
of instruments with short-term interest lock-ins increased sharply
year-on-year. Taking into account existing interest rate hedging
instruments, the proportion of financial liabilities with short-term
Note 46, amounts to around 36 % (previous
interest lock-ins,
year: 8 %) as at the reporting date. However, the effect of poten-
tial interest rate changes on the Group’s financial position remains
insignificant.

The quantitative risk data relating to interest rate risk required
by IFRS 7 is presented in the form of a sensitivity analysis. This
method determines the effects of hypothetical changes in market
interest rates on interest income, interest expense and equity as at
the reporting date. The following assumptions are used as a basis
for the sensitivity analysis:

Primary variable-rate financial instruments are subject to
interest rate risk and must therefore be included in the sensitivity
analysis. Primary variable-rate financial instruments that were
transformed into fixed-income financial instruments using cash
flow hedges are not included. Changes in market interest rates for
derivative financial instruments used as a cash flow hedge affect
equity by changing fair values and must therefore be included in
the sensitivity analysis. Fixed-income financial instruments meas-
ured at amortised cost are not subject to interest rate risk.

Currency risks arise from planned foreign currency trans-
actions if the future foreign currency transactions are settled at
exchange rates that differ from the rates originally planned or
calculated. These currency risks are also captured centrally in
Corporate Treasury and managed on a rolling 24-month basis as
part of a hedging programme. The goal is to hedge an average of
up to 50 % of all significant currency risks over a 24-month period.
This makes it possible to plan reliably and reduce fluctuations in
earnings caused by currency movements. At the reporting date,
an average of approximately 35 % of the foreign currency risk of
the currencies concerned was hedged for the next 24 months. The
relevant hedging transactions are recognised using cash flow hedge
accounting;

Note 50.3, cash flow hedges.

In total, currency forwards and currency swaps with a notional
amount of €4,280 million (previous year: €5,976 million) were
outstanding at the balance sheet date. The corresponding fair
value was €98 million (previous year: €51 million). At the end of
the year there were no currency options, as in the previous year.
The Group also held cross-currency swaps with a notional amount
of €163 million (previous year: €163 million) and a fair value of
€14 million (previous year €2 million) to hedge foreign currency
financing.

Currency risks resulting from translating assets and liabilities
of foreign operations into the Group’s currency (translation risk)
were not hedged as at 31 December 2013.

Of the unrealised gains or losses from currency derivatives
recognised in equity as at 31 December 2013 in accordance with
IAS 39, €69 million (previous year: €3 million) is expected to be
recognised in income in the course of 2014.

IFRS 7 requires the disclosure of quantitative risk data show-
ing how profit or loss and equity are affected by changes in exchange
rates at the reporting date. The impact of these changes in exchange
rates on the portfolio of foreign currency financial instruments is
assessed by means of a value-at-risk calculation (95 % confidence /
one-month holding period). It is assumed that the portfolio as
at the reporting date is representative for the full year. Effects of
hypothetical changes in exchange rates on translation risk do not
fall within the scope of IFRS 7. The following assumptions are used
as a basis for the sensitivity analysis:

Primary financial instruments in foreign currencies used by
Group companies were hedged by Deutsche Post AG’s in-house
bank, with Deutsche Post AG setting and guaranteeing monthly
exchange rates. Exchange rate-related changes therefore have no
effect on the profit or loss and equity of the Group companies.
Where, in individual cases, Group companies are not permitted to
participate in in-house banking for legal reasons, their currency
risks from primary financial instruments are fully hedged locally
through the use of derivatives. They therefore have no impact on
the Group’s risk position.

Hypothetical changes in exchange rates have an effect on
the fair values of Deutsche Post AG’s external derivatives that is
reported in profit or loss; they also affect the foreign currency
gains and losses from remeasurement at the closing date of the
in-house bank balances, balances from external bank accounts as
well as inter nal and external loans extended by Deutsche Post AG.
The foreign currency value at risk of the foreign currency items

Deutsche Post DHL 2013 Annual Report

193

Notes
Other disclosures

Consolidated Financial Statements

Designated fair value hedges of interest rate risk are not
included in the analysis because the interest-related changes in fair
value of the hedged item and the hedging transaction almost fully
offset each other in profit or loss for the period. Only the variable
portion of the hedging instrument affects net financial income / net
finance costs and must be included in the sensitivity analysis.

If the market interest rate level as at 31 December 2013 had
been 100 basis points higher, net finance costs would have increased
by €6 million (previous year: decreased by €2 million). A market
interest rate level 100 basis points lower would have had the op-
posite effect. A change in the market interest rate level by 100 basis
points would affect the fair values of the interest rate derivatives
recognised in equity. As in the previous year, a rise in interest rates
in this financial year would not have increased equity, nor would a
reduction have reduced equity.

Market rIsk

As in the previous year, most of the risks arising from com-
modity price fluctuations, in particular fluctuating prices for
kerosene and marine diesel fuels, were passed on to customers via
operating measures. However, the impact of the related fuel sur-
charges is delayed by one to two months, so that earnings may be
affected temporarily if there are significant short-term fuel price
variations.

In addition, a small number of commodity swaps for diesel
and marine diesel fuel were used to control residual risks. The
notional amount of these commodity swaps was €56 million (pre-
vious year: €8 million) with a fair value of €0 million (previous
year: €0 million).

IFRS 7 requires the disclosure of a sensitivity analysis, pre-
senting the effects of hypothetical commodity price changes on
profit or loss and equity.

Changes in commodity prices would affect the fair value of
the derivatives used to hedge highly probable forecast commodity
purchases (cash flow hedges) and the hedging reserve in equity.
A 10 % increase in the commodity prices underlying the derivatives
as at the balance sheet date would have increased fair values and
equity by €5 million (previous year: €0 million). A corresponding
decline in commodity prices would have had the opposite effect.

In the interests of simplicity, some of the commodity price
hedges were not recognised using cash flow hedge accounting. For
the derivatives in question, commodity price changes would affect
both the fair values of the derivatives and the income statement. As
in the previous year, if the underlying commodity prices had been
10 % higher at the reporting date, this would have increased the
fair values in question and, consequently, operating profit by less
than €1 million. A corresponding decline in the commodity prices
would have also reduced the fair values and operating profit by less
than €1 million.

CreDIt rIsk

The credit risk incurred by the Group is the risk that counter-
parties fail to meet their obligations arising from operating activ-
ities and from financial transactions. To minimise credit risk from
financial transactions, the Group only enters into transactions with
prime-rated counterparties. The Group’s heterogeneous customer
structure means that there is no risk concentration. Each counter-
party is assigned an individual limit, the utilisation of which is
regularly monitored. A test is performed at the balance sheet dates
to establish whether an impairment loss needs to be charged on
the positive fair values due to the individual counterparties’ credit
quality. This was not the case for any of the counterparties as at
31 December 2013.

Default risks are continuously monitored in the operating
business. The aggregate carrying amounts of financial assets
represent the maximum default risk. Trade receivables amounting
to €7,040 million (previous year: €6,959 million) are due within
one year. The following table gives an overview of receivables that
are past due:

€ m

At 31 December 2013

Trade receivables

At 31 December 2012

Trade receivables

Carrying amount
before
impairment loss

Neither impaired
nor due at the
reporting date

Less than
30 days

31 to
60 days

61 to
90 days

91 to
120 days

121 to
150 days

151 to
180 days

>180 days

Past due and not impaired at the reporting date

7,250

5,154

749

641

270

7,175

5,038

764

647

258

103

194

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

Trade receivables changed as follows:

€ m

Gross receivables

At 1 January

Changes

At 31 December

Valuation allowances

At 1 January

Changes

At 31 December

Carrying amount at 31 December

2012

2013

7,163

7,175

–229

–216

6,959

7,175

7,250

–216

–210

7,040

All other financial instruments are neither past due nor
impaired. The heterogeneous structure of the counterparties pre-
vents risk concentration.

Impairment losses of €23 million (previous year: €45 million)

were recognised for other assets.

50.2 Collateral

€545 million (previous year: €549 million) of collateral is
recognised in non-current financial assets as at the balance sheet
date. Of this amount, €318 million relates to the restricted cash
transferred to a blocked account with Commerzbank AG for any
payments that may be required due to the EU state aid proceed-
Note 3, 2012 Annual Report. €55 million is attributable to
ings;
collateral in the context of an M & A transaction and €102 million
relates primarily to liabilities in conjunction with the settlement of
Deutsche Post AG’s residential building loans. €64 million relates
to sureties paid.

Collateral of €41 million is recognised in current financial
assets (previous year: €49 million). The majority of this concerns
collateral deposited for QTE leases.

Deutsche Post DHL 2013 Annual Report

195

Notes
Other disclosures

Consolidated Financial Statements

50.3 Derivative financial instruments

The following table gives an overview of the recognised de-
rivative financial instruments used in the Group and their fair
values. Derivatives with amortising notional volumes are reported
in the full amount at maturity.

Derivative financial instruments

€ m

2012

2013

Assets

Liabilities

Fair values in 2013, by maturity

No-
tional
amount

Fair
value

Fair
value
of
assets

Fair
value
of
liabil-
ities

Less
than
1
year

Total
fair
value

Up
to 2
years

Up
to 3
years

Up
to 4
years

Up
to 5
years

> 5
years

Up
to 2
years

Up
to 3
years

Up
to 4
years

Up
to 5
years

> 5
years

Less
than
1
year

–21

– 5

–20

– 5

–1

– 6

–1

– 5

–27

– 5

– 4

–2

– 4

–2

1,126

– 6

163

963

2,206

1,825

381

Interest rate products

Interest rate swaps

of which cash flow
hedges

of which fair value
hedges

of which held for trading

Currency transactions

Currency forwards

of which cash flow
hedges

of which net investment
hedges

326

163

2,918

1,442

of which held for trading

1,476

– 5

Currency options

of which cash flow
hedges

Currency swaps

3,058

2,074

of which cash flow
hedges

164

of which held for trading

2,894

Cross-currency swaps

of which cash flow
hedges

of which fair value
hedges

of which held for trading

163

2,028

163

–1

– 6

–26

–25

–1

– 6

–1

– 5

6,139

4,443

144

–32

112

128

Commodity price
transactions

Commodity price swaps

of which cash flow
hedges

of which held for trading

In addition to those shown in the table, there are other deriv-
atives with a fair value of €–2 million (previous year: €–49 million)
that are the result of M & A transactions.

196

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

FaIr vaLue HeDGes

CasH FLoW HeDGes

Interest rate swaps were used to hedge the fair value risk of
fixed-interest euro-denominated liabilities falling due in 2014. The
fair values of these interest rate swaps amount to €5 million (pre-
vious year: €10 million). As at 31 December 2013, there was also a
€1 million (previous year: €7 million) adjustment to the carrying
amount of the underlying hedged item arising from an interest rate
swap unwound in the past. The adjustment to the carrying amount
is amortised over the remaining term of the liability using the effec-
tive interest method, and reduces future interest expense.

New interest rate swaps were entered into and designated
as fair value hedges in 2013 to hedge the fair value risk of fixed-
interest euro-denominated liabilities falling due in 2018 and 2020.
The fair value of these hedging instruments was €–6 million as at
the reporting date. The following table gives an overview of the
gains and losses arising from the hedged items and the respective
hedging transactions:

Ineffective portion of fair value hedges

€ m

Gains (+) on hedged items

Losses (–) on hedging transactions

Balance (ineffective portion)

2012

–1

2013

–11

The Group uses currency forwards and currency swaps to
hedge the cash flow risk from future foreign currency operating
revenue and expenses. The fair values of currency forwards and
currency swaps amounted to €64 million at the reporting date
(previous year: €9 million). The hedged items will have an impact
on cash flow by 2015.

Risks arising from fixed-interest foreign currency invest-
ments were hedged using synthetic cross-currency swaps, with
the investments being transformed into fixed-interest euro invest-
ments. These synthetic cross-currency swaps hedge the currency
risk, and their fair values at the reporting date amounted to
€21 million (previous year: €15 million).

The risks from the purchase of diesel and marine diesel fuels,
which cannot be passed on to customers, were hedged using com-
modity swaps that will affect cash flow in 2014. As in the previous
year, the fair value of these cash flow hedges amounted to €0 mil-
lion at year-end.

Deutsche Post DHL 2013 Annual Report

197

Notes
Other disclosures

Consolidated Financial Statements

50.4 Additional disclosures on the financial instruments

used in the Group

The Group classifies financial instruments in line with the
respective balance sheet items. The following table reconciles the
classes to the categories given in IAS 39 and the respective fair
values:

Reconciliation of carrying amounts in the balance sheet at 31 December 2013

€ m

Carrying amount

Carrying amount by IAS 39 measurement category

Financial assets and liabilities at fair value through profit or loss

Available-for-sale financial assets

Trading

Fair value option

assets

Non-current financial assets

at cost

at fair value

Trade receivables

at cost

Other current assets

at cost

outside IFRS 7

Current financial assets

at cost

at fair value

Cash and cash equivalents

Total assets

eQuItY anD LIaBILItIes

Non-current financial liabilities 1

at cost

at fair value

Other non-current liabilities

at cost

outside IFRS 7

Current financial liabilities

at cost

at fair value

Trade payables

Other current liabilities

at cost

outside IFRS 7

Total eQuItY anD LIaBILItIes

1,124

858

266

7,040

2,221

955

1,266

821

751

3,417

14,623

4,612

4,601

227

147

1,328

1,299

6,392

3,981

346

3,635

16,540

160

611

868

1 The Deutsche Post AG and Deutsche Post Finance B.V. bonds included in current and non-current financial liabilities were partly designated as hedged items in a fair
value hedge and are thus subject to a basis adjustment. The bonds are therefore recognised neither at full fair value nor at amortised cost. Non-current financial
liabilities also include the convertible bond issued by Deutsche Post AG in December 2012. The listed bond had a fair value of €1,353 million at the balance sheet date.
A fair value of €928 million was reported for the debt component at the balance sheet date.

198

Deutsche Post DHL 2013 Annual Report

Loans and receivables /

other financial liabilities

Held-to-maturity assets

Derivatives designated

as hedging instruments

Lease receivables /

finance lease liabilities

Other financial instruments

outside the scope of IAS 39

Fair value of financial

instruments under IFRS 7

729

7,040

955

3,417

12,204

4,407

147

1,280

6,392

346

12,572

100

116

194

213

846

266

7,040

955

751

3,417

–

4,657

147

1,302

6,392

346

–

Consolidated Financial Statements

Notes
Other disclosures

Reconciliation of carrying amounts in the balance sheet at 31 December 2013

€ m

Carrying amount

Carrying amount by IAS 39 measurement category

Financial assets and liabilities at fair value through profit or loss

Available-for-sale financial assets

Trading

Fair value option

Loans and receivables /
other financial liabilities

Held-to-maturity assets

Derivatives designated
as hedging instruments

Lease receivables /
finance lease liabilities

Other financial instruments
outside the scope of IAS 39

Fair value of financial
instruments under IFRS 7

assets

Non-current financial assets

at cost

at fair value

Trade receivables

at cost

Other current assets

at cost

outside IFRS 7

Current financial assets

at cost

at fair value

Cash and cash equivalents

Total assets

eQuItY anD LIaBILItIes

Non-current financial liabilities 1

Other non-current liabilities

at cost

at fair value

at cost

outside IFRS 7

Current financial liabilities

at cost

at fair value

Trade payables

Other current liabilities

at cost

outside IFRS 7

Total eQuItY anD LIaBILItIes

1,124

858

266

7,040

2,221

955

1,266

821

751

3,417

14,623

4,612

4,601

227

147

1,328

1,299

6,392

3,981

346

3,635

16,540

160

611

868

1 The Deutsche Post AG and Deutsche Post Finance B.V. bonds included in current and non-current financial liabilities were partly designated as hedged items in a fair

value hedge and are thus subject to a basis adjustment. The bonds are therefore recognised neither at full fair value nor at amortised cost. Non-current financial

liabilities also include the convertible bond issued by Deutsche Post AG in December 2012. The listed bond had a fair value of €1,353 million at the balance sheet date.

A fair value of €928 million was reported for the debt component at the balance sheet date.

729

7,040

955

3,417

12,204

4,407

147

1,280

6,392

346

12,572

100

116

194

213

846

266

7,040

955

751

3,417

–

4,657

147

1,302

6,392

346

–

Deutsche Post DHL 2013 Annual Report

199

Loans and receivables /

other financial liabilities

Held-to-maturity assets

Derivatives designated

as hedging instruments

Lease receivables /

finance lease liabilities

Other financial instruments

outside the scope of IAS 39

Fair value of financial

instruments under IFRS 7

737

6,959

893

2,400

11,066

4,282

149

268

5,991

398

11,088

123

149

866

173

6,959

893

119

133

2,400

–

4,571

149

294

109

5,991

398

–

Notes
Other disclosures

Consolidated Financial Statements

Reconciliation of carrying amounts in the balance sheet at 31 December 2012

€ m

Carrying amount

Carrying amount by IAS 39 measurement category

Financial assets and liabilities at fair value through profit or loss

Available-for-sale financial assets

Trading

Fair value option

assets

Non-current financial assets

at cost

at fair value

Trade receivables

at cost

Other current assets

at cost

outside IFRS 7

Current financial assets

at cost

at fair value

Cash and cash equivalents

Total assets

eQuItY anD LIaBILItIes

Non-current financial liabilities 1

at cost

at fair value

Other non-current liabilities

at cost

outside IFRS 7

Current financial liabilities

at cost

at fair value

Trade payables

Other current liabilities

at cost

outside IFRS 7

Total eQuItY anD LIaBILItIes

1,039

866

173

6,959

2,153

893

1,260

252

119

133

2,400

12,803

4,413

4,405

276

149

127

403

294

109

5,991

4,004

398

3,606

15,087

104

186

1 The Deutsche Post AG and Deutsche Post Finance B.V. bonds included in non-current financial liabilities were fully or partly designated as hedged items in a fair value
hedge and are thus subject to a basis adjustment. They are therefore recognised neither at full fair value nor at amortised cost. Non-current financial liabilities
also include the convertible bond issued by Deutsche Post AG in December 2012. The listed bond had a fair value of €1,049 million at the balance sheet date. A fair
value of €929 million was reported for the debt component at the balance sheet date.

No assets were reclassified in financial years 2013 and 2012.

200

Deutsche Post DHL 2013 Annual Report

Reconciliation of carrying amounts in the balance sheet at 31 December 2012

€ m

Carrying amount

Carrying amount by IAS 39 measurement category

Financial assets and liabilities at fair value through profit or loss

Available-for-sale financial assets

Trading

Fair value option

Loans and receivables /
other financial liabilities

Held-to-maturity assets

Derivatives designated
as hedging instruments

Lease receivables /
finance lease liabilities

Other financial instruments
outside the scope of IAS 39

Fair value of financial
instruments under IFRS 7

Consolidated Financial Statements

Notes
Other disclosures

assets

Non-current financial assets

at cost

at fair value

Trade receivables

at cost

Other current assets

at cost

outside IFRS 7

Current financial assets

at cost

at fair value

Cash and cash equivalents

Total assets

eQuItY anD LIaBILItIes

Non-current financial liabilities 1

Other non-current liabilities

at cost

at fair value

at cost

outside IFRS 7

Current financial liabilities

at cost

at fair value

Trade payables

Other current liabilities

at cost

outside IFRS 7

Total eQuItY anD LIaBILItIes

1,039

866

173

6,959

2,153

893

1,260

252

119

133

2,400

12,803

4,413

4,405

276

149

127

403

294

109

5,991

4,004

398

3,606

15,087

104

186

1 The Deutsche Post AG and Deutsche Post Finance B.V. bonds included in non-current financial liabilities were fully or partly designated as hedged items in a fair value

hedge and are thus subject to a basis adjustment. They are therefore recognised neither at full fair value nor at amortised cost. Non-current financial liabilities

also include the convertible bond issued by Deutsche Post AG in December 2012. The listed bond had a fair value of €1,049 million at the balance sheet date. A fair

value of €929 million was reported for the debt component at the balance sheet date.

737

6,959

893

2,400

11,066

4,282

149

268

5,991

398

11,088

123

149

866

173

6,959

893

119

133

2,400

–

4,571

149

294

109

5,991

398

–

Deutsche Post DHL 2013 Annual Report

201

Notes
Other disclosures

Consolidated Financial Statements

If there is an active market for a financial instrument (e. g.,
stock exchange), the fair value is determined by reference to the
market or quoted exchange price at the balance sheet date. If no
fair value is available in an active market, the quoted prices in an
active market for similar instruments or recognised valuation tech-
niques are used to determine fair value. The valuation techniques
used incorporate the key factors determining the fair value of the
financial instruments using valuation parameters that are derived
from the market conditions as at the balance sheet date. Counter-
party risk is analysed on the basis of the current credit default
swaps signed by the counterparties. The fair values of other non-
current receivables and held-to-maturity financial investments
with remain ing maturities of more than one year correspond to
the present values of the payments related to the assets, taking into
account current interest rate parameters.

Cash and cash equivalents, trade receivables and other receiv-
ables have predominantly short remaining maturities. As a result,
their carrying amounts as at the reporting date are approximately
equivalent to their fair values. Trade payables and other liabilities
generally have short remaining maturities; the recognised amounts
approximately represent their fair values.

Available-for-sale financial assets include shares in partner-
ships and corporations in the amount of €97 million (previous
year: €104 million). There is no active market for these instruments.
As no future cash flows can be reliably determined, the fair values
cannot be determined using valuation techniques. The shares of
these entities are recognised at cost. There are no plans to sell or
derecognise significant shares of the available-for-sale financial
assets recognised as at 31 December 2013 in the near future. As in
the previous year, no significant shares measured at cost were sold
in the financial year. Available-for-sale financial assets measured at
fair value relate to equity and debt instruments.

Financial assets at fair value through profit or loss include
securities to which the fair value option was applied, in order to
avoid accounting inconsistencies. There is an active market for
these assets, which are recognised at fair value.

The following table presents the classes of financial instru-
ments recognised at fair value and not recognised at fair value by
the level in the fair value hierarchy to which they are assigned:

Financial assets and liabilities

€ m

Class

Financial assets and liabilities: 2013

Non-current financial assets

Current financial assets

Total financial assets

Non-current financial liabilities

Current financial liabilities

Total financial liabilities

Financial assets and liabilities: 2012

Non-current financial assets

Current financial assets

Total financial assets

Non-current financial liabilities

Current financial liabilities

Total financial liabilities

1 Level 1: quoted market prices.
2 Level 2: measurement using key inputs based on observable market data.
3 Level 3: measurement using key inputs not based on observable market data.

Level 1 1

Level 2 2

Level 3 3

Total

157

611

768

4,221

927

5,148

137

161

4,210

765

210

975

447

402

849

770

228

998

366

357

723

190

132

1,112

821

1,933

4,668

1,331

5,999

1,039

252

1,291

4,579

403

4,982

202

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

The fair values of currency forwards were measured on the
basis of discounted expected future cash flows, taking forward rates
on the foreign exchange market into account. The currency options
were measured using the Black-Scholes option pricing model.

Level 2 includes commodity, interest rate and currency
deriv atives. The fair values of the derivatives (currency forwards,
interest rate and commodity swaps) are measured on the basis of
discounted expected future cash flows, taking into account for-
ward rates for currencies, interest rates and commodities (mar-
ket approach). For this purpose, price quotations observable on
the market (exchange rates, interest rates and commodity prices)
are imported from information platforms customary in the mar-
ket into the treasury management system. The price quotations
reflect actual transactions involving similar instruments on an

active market. Any currency options used are measured using
the Black-Scholes option pricing model. All significant inputs
used to measure derivatives are observable on the market. Level 3
mainly comprises the fair values of equity investments and options
entered into in connection with M & A transactions. These equity
investments and options are measured using recognised valuation
models, taking plausible assumptions into account; measurement
depends largely on financial ratios.

No financial instruments were transferred between levels in
financial year 2012. The table shows the effect on net gains and
losses of the financial instruments categorised within level 3 as at
the reporting date:

Unobservable inputs (Level 3)

€ m

Assets

Equity instruments

Liabilities

Debt instruments

Derivatives

Equity derivatives

Gains and
losses
(recognised in
profit or loss)

Gains and
losses
(recognised
in OCI)

At
1 Jan. 2013

Additions

Disposals

At
31 Dec. 2013

41 1

–1 2

– 43 2

–3

1 Unrealised gains were recognised in the IAS 39 revaluation reserve.
2 Fair value losses were recognised in other finance costs.

The net gains and losses on financial instruments classified
in accordance with the individual IAS 39 measurement categories
are as follows:

Net gains and losses by measurement category

€ m

Loans and receivables

Financial assets and liabilities at fair value
through profit or loss

Trading

Fair value option

Other financial liabilities

2012

–111

–337

2013

–107

The net gains and losses mainly include the effects of the
fair value measurement, impairment and disposals (disposal
gains / losses) of financial instruments. In financial year 2013, an
option entered into in the context of an M & A transaction was
derecognised, resulting in an impact on profit or loss. The amount
reported for the trading category in the previous year related to the
measurement of the forward and the options entered into to trans-
fer the remaining shares in Deutsche Postbank AG. Dividends and
interest are not taken into account for the financial instruments
measured at fair value through profit or loss. Disclosures on net
gains or losses on available-for-sale financial assets can be found
Note 40.2. Income and expenses from interest and commis-
in
sion agreements of the financial instruments not measured at fair
value through profit or loss are explained in the income statement
disclosures.

Deutsche Post DHL 2013 Annual Report

203

Notes
Other disclosures

Consolidated Financial Statements

The following tables show the impact of netting agreements
based on master netting arrangements or similar agreements on
the presentation of financial assets and financial liabilities as at the
reporting date:

Offsetting – Assets

€ m

Assets at 31 December 2013

Derivative financial assets

Trade receivables

Assets at 31 December 2012

Derivative financial assets 1

Trade receivables

1 Excluding derivatives from M & A transactions.

Offsetting – Liabilities

€ m

Liabilities at 31 December 2013

Derivative financial liabilities 1

Trade payables

Liabilities at 31 December 2012

Derivative financial liabilities 1

Trade payables

1 Excluding derivatives from M & A transactions.

Financial assets and liabilities not set off
in the balance sheet

Gross amount
of financial
assets
recognised
at the
reporting date

Gross amount
of financial
liabilities
set off

Net amount
of financial
assets set off
in the balance
sheet

Financial liabilities subject to
a legally enforceable netting
agreement that do not meet
offsetting criteria

Collateral
received

156

7,207

144

7,084

167

125

156

7,040

144

6,959

Gross amount
of financial
liabilities
recognised
at the
reporting date

Net amount
of financial
liabilities set
off in the
balance sheet

Gross amount
of financial
assets set off

Financial assets and liabilities not set off
in the balance sheet

Financial assets subject to
a legally enforceable netting
agreement that do not meet
offsetting criteria

Collateral
provided

6,559

6,116

167

125

6,392

5,991

Total

118

7,040

6,959

Total

6,392

5,991

204

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

Financial assets and liabilities are set off on the basis of net-
ting agreements (master netting arrangements) only if an enforce-
able right of set-off exists and settlement on a net basis is intended
as at the reporting date.

If the right of set-off is not enforceable in the normal course
of business, the financial assets and liabilities are recognised in the
balance sheet at their gross amounts as at the reporting date. The
master netting arrangement creates a conditional right of set-off
that can only be enforced by taking legal action.

To hedge cash flow and fair value risks, Deutsche Post AG
enters into financial derivative transactions with a large number
of financial services institutions. These contracts are subject to
a standardised master agreement for financial derivative trans-
actions. This agreement provides for a conditional right of set-off,
resulting in the recognition of the gross amount of the financial
derivative transactions at the reporting date. The conditional right
of set-off is presented in the table.

Settlement processes arising from services related to postal
deliveries are subject to the Universal Postal Convention and the
REIMS Agreement. These agreements, particularly the settlement
conditions, are binding on all public postal operators for the spec-
ified contractual arrangements. Imports and exports between
two parties to the agreement during a calendar year are offset in
an annual statement of account and presented on a net basis in
the final annual statement. The final statement is prepared by the
creditor. Receivables and payables covered by the Universal Postal
Convention and the REIMS Agreement are presented on a net basis
at the reporting date. The tables above show the receivables and
payables before and after offsetting.

51 Contingent liabilities

The Group’s contingent liabilities total €1,077 million (pre-
vious year: €1,135 million). €21 million of the contingent liabil-
ities relates to guarantee obligations (previous year: €22 mil-
lion), €84 million to warranties (previous year: €103 million)
and €124 million to liabilities from litigation risks (previous year:
€130 million).

The other contingent liabilities declined by €32 million, from

€880 million in the previous year to €848 million.

52 Other financial obligations

In addition to provisions, liabilities and contingent liabilities,
there are other financial obligations amounting to €6,129 million
(previous year: €6,325 million) from non-cancellable operating
leases as defined by IAS 17.

The Group’s future non-cancellable payment obligations

under leases are attributable to the following asset classes:

Lease obligations

€ m

Land and buildings

Aircraft

Transport equipment

Technical equipment and machinery

Other equipment, operating and office equipment

IT equipment

Lease obligations

2012

5,100

647

450

2013

4,966

524

512

6,325

6,129

The decrease

lease obligations by €196 million to
€6,129 million is a consequence of the reduction in the remaining
terms of legacy agreements, especially for real estate and aircraft
which, in the main, are not matched by the same volume of new
leases.

Maturity structure of minimum lease payments

€ m

Less than 1 year

More than 1 year to 2 years

More than 2 years to 3 years

More than 3 years to 4 years

More than 4 years to 5 years

More than 5 years

2012

1,504

1,107

837

642

500

1,735

6,325

2013

1,465

1,109

853

651

475

1,576

6,129

The present value of discounted minimum lease payments is
€5,019 million (previous year: €5,156 million), based on a discount
factor of 4.75 % (previous year: 4.75 %). Overall, rental and lease pay-
ments amounted to €2,508 million (previous year: €2,529 million),
of which €1,696 million (previous year: €1,730 million) relates to
non-cancellable leases. €2,092 million (previous year: €2,255 mil-
lion) of future lease obligations from non-cancellable leases is pri-
marily attributable to Deutsche Post Immobilien GmbH.

The purchase obligation for investments in non-current assets

amounts to €134 million (previous year: €125 million).

Deutsche Post DHL 2013 Annual Report

205

Notes
Other disclosures

Consolidated Financial Statements

53 Litigation

A large number of the postal services rendered by Deutsche
Post AG and its subsidiaries are subject to sector-specific regulation
by the Bundes netz agentur (German federal network agency) pur-
suant to the Postgesetz (German Postal Act). As the regulatory
authority, the Bundes netz agentur approves or reviews these prices,
formulates the terms of downstream access and has special super-
visory powers to combat market abuse. This general regulatory
risk could lead to a decline in revenue and earnings in the event of
nega tive decisions.

Legal risks arise, amongst other things, from pending ad-
ministrative court appeals by an association and a competitor
against the price approvals under the price cap procedure for 2003,
2004 and 2005, and by the association against the correspond-
ing decisions for 2008 and 2013. Although the appeals against
price approvals for the years 2003 to 2005 were dismissed by the
Münster Higher Administrative Court, as the court of appeal, an
appeal has been filed with the Federal Administrative Court. The
Cologne Administrative Court has not yet decided on the appeals
against the price approvals for 2008 and 2013.

Legal risks also result from appeals by Deutsche Post AG
against other price approvals granted by the regulatory authority.
These largely relate to appeals against the price approvals for access
to Deutsche Post AG’s post office box facilities and change of address
information by competitors.

There are legal risks in connection with the discounts
for downstream access, which Deutsche Post AG increased on
1 July 2010. Deutsche Post competitors and their associations
filed complaints against these discount increases with the Bundes-
netz agentur. They claim that the increased discounts conflict, in
particular, with regulatory requirements. However, the Bundes-
netz agentur discontinued its review proceedings by way of a noti-
fication of 15 September 2010 after having found no violation of
the applicable regulations. In October 2011, several competitors
of Deutsche Post AG brought an action against the Bundes netz-
agentur with the aim of reversing the discount increases. Deutsche
Post AG considers its charges for downstream access and the dis-
count increases to be in compliance with the regulatory and other
legal requirements. Following the hearing at the Cologne Admin-
istrative Court on 25 November 2013, the claimants withdrew their
appeal. The Bundes netz agentur’s decision of 15 November 2010
therefore stands.

In its decision dated 14 June 2011, the Bundes netz agentur
concluded that First Mail Düsseldorf GmbH, a subsidiary of
Deutsche Post AG, and Deutsche Post AG had contravened the
discounting and discrimination prohibitions under the Post gesetz.
The companies were instructed to remedy the breaches that had
been identified. Both companies appealed against the ruling.
Further more, First Mail Düsseldorf GmbH filed an application to
suspend the execution of the ruling until a decision was reached
in the principal proceedings. The Cologne Administrative Court
and the Münster Higher Administrative Court both dismissed
this application. First Mail Düsseldorf GmbH discontinued its
mail delivery operations at the end of 2011 and retracted its appeal
on 19 December 2011. Deutsche Post AG continues to pursue its
appeal against the Bundes netz agentur ruling.

In its ruling of 30 April 2012, the Bundes netz agentur deter-
mined that Deutsche Post AG had contravened the discrimination
provisions under the Postgesetz by charging different fees for the
transport of identical invoices and invoices containing different
amounts. Deutsche Post AG was requested to discontinue the dis-
crimination determined immediately, but no later than 31 Decem-
ber 2012. The ruling was implemented on 1 January 2013. Deutsche
Post does not share the legal opinion of the Bundes netz agentur and
appealed the ruling.

On 25 January 2012, the European Commission issued a
ruling on the formal investigation regarding state aid that it had
initiated on 12 September 2007. The Commission determined that
Deutsche Post AG was not overcompensated, using state resources,
for the cost of providing universal services between 1989 and 2007.
It also did not find fault with the guarantees issued by the German
state for legacy liabilities. By contrast, it did find that some of the
funding arrangements for civil servants’ pensions represented il-
legal state aid. It said that the pension relief granted to Deutsche
Post AG by the Bundes netz agentur during the price approval pro-
cess led to Deutsche Post AG receiving a benefit in relation to its
services that are not rate-regulated. According to the Commission,
this must be claimed back by the German government, which
must also ensure that the granting of state aid does not in future
confer benefits with respect to non-rate-regulated services (illegal
state aid). The European Commission has left the calculation of
the precise amount to be repaid to the Federal Republic. However,
in a press release, the European Commission had referred to an
amount of between €500 million and €1 billion.

Deutsche Post AG and the federal government are of the
opinion that the European Commission’s state aid decision 0f
25 January 2012 cannot withstand legal review and have each sub-
mitted an appeal to the European Court of Justice in Luxembourg.
To implement the state aid ruling, the federal government
called upon Deutsche Post AG on 29 May 2012 to make a pay-
ment of €298 million including interest. Deutsche Post AG paid
this amount to a trustee on 1 June 2012 and appealed the recov-
ery order to the Administrative Court. However, this appeal has
been suspended pending a ruling from the European Court of
Justice. The company made additional payments of €19.4 million
and €15.6 million to the trustee on 2 January 2013 and 2 Janu-
ary 2014, respectively. All payments made until the reporting date
were reported in the balance sheet under non-current assets; the
earnings position remained unaffected.

The European Commission has not expressed its final accept-
ance of the calculation of the state aid to be repaid. On 17 Decem-
ber 2013, it initiated proceedings against the Federal Republic of
Germany with the European Court of Justice to effect a higher
repay ment amount. Although Deutsche Post AG and the federal
government are of the opinion that the European Commission’s
state aid decision cannot withstand legal review, it cannot be ruled
out that Deutsche Post AG will ultimately be required to make a
(potentially higher) payment, which could have an adverse effect
on earnings.

206

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

54 Share-based payment

Assumptions regarding the price of Deutsche Post AG’s
shares and assumptions regarding employee fluctuation are taken
into account when measuring the value of share-based payments
for executives. All assumptions are reviewed on a quarterly basis.
The staff costs are recognised pro rata in profit or loss to reflect
the services rendered as consideration during the vesting period
(lock-up period).

Share-based payment for executives (Share Matching Scheme)

Under the share-based payment system for executives (Share
Matching Scheme), certain executives receive part of their vari-
able remuneration for the financial year in the form of shares of
Deutsche Post AG in the following year (incentive shares); all Group
executives can specify an increased equity component individually
by converting a further portion of their variable remuneration for

the financial year (investment shares). After a four-year lock-up
period during which the executive must be employed by the Group,
they again receive the same number of Deutsche Post AG shares
(matching shares). Assumptions are made regarding the conver-
sion behaviour of executives with respect to their relevant bonus
portion. Share-based payment arrangements are entered into each
year, with 1 January of the respective year and 1 April of the follow-
ing year being the grant dates for each year’s tranche. Whereas in-
centive shares and matching shares are classified as equity-settled
share-based payments, investment shares are compound finan-
cial instruments and the liability and equity components must be
measured separately. However, in accordance with IFRS 2.37, only
the debt component is measured due to the provisions of the Share
Matching Scheme. The investment shares are therefore treated as
cash-settled share-based payments.

Share Matching Scheme

Grant dates

Term

End of term

Share price at grant date (fair value)

Incentive shares and matching shares awarded for incentive shares

Matching shares awarded for investment shares

Number of incentive shares

Number of matching shares expected

Incentive shares

Investment shares

1 Estimated provisional amount, will be determined on 1 April 2014.
2 Expected number.

2009
tranche

2010
tranche

2011
tranche

2012
tranche

2013
tranche

1 Nov. 2009 /
1 April 2010

1 Jan. 2010 /
1 April 2011

1 Jan. 2011 /
1 April 2012

1 Jan. 2012 /
1 April 2013

1 Jan. 2013 /
1 April 2014

months

March 2014

March 2015

March 2016

March 2017

March 2018

€

thousands

11.48

13.03

430

336

259

13.98

12.91

638

574

932

12.90

14.83

660

594

940

12.13

18.22

479

431

709

17.02

25.00 1

348 2

313

556

In the consolidated financial statements as at 31 Decem-
ber 2013, €35 million (previous year: €34 million) was recognised
in equity for the granting of variable remuneration components;

Note 39.

Long-Term Incentive Plan (2006 LtIp) for members
of the Board of Management

Since 1 July 2006, the members of the Board of Management
receive stock appreciation rights (SARs) under the 2006 LTIP. Each
SAR under the 2006 LTIP entitles the holder to receive a cash settle-
ment equal to the difference between the average closing price of
Deutsche Post shares during the last five trading days before the
exercise date and the issue price of the SAR.

The members of the Board of Management each invest 10 %
of their fixed annual remuneration (annual base salary) as a per-
sonal financial investment every year. The number of SAR s issued
to the members of the Board of Management is determined by
the Super visory Board. Following a four-year waiting period that

begins on the issue date, the SAR s granted can be fully or partly
exercised within a period of two years provided an absolute or
relative performance target is achieved at the end of the waiting
period. Any SAR s not exercised during this two-year period will
expire. To determine how many – if any – of the granted SAR s can
be exercised, the average share price or the average index is com-
pared for the reference period and the performance period. The
reference period comprises the last 20 consecutive trading days
before the issue date. The performance period is the last 60 trading
days before the end of the waiting period. The average (closing)
price is calculated as the average closing price of Deutsche Post
shares in Deutsche Börse AG’s Xetra trading system.

Deutsche Post DHL 2013 Annual Report

207

Notes
Other disclosures

Consolidated Financial Statements

The absolute performance target is met if the closing price of
Deutsche Post shares is at least 10, 15, 20 or 25 % above the issue
price. The relative performance target is tied to the performance
of the shares in relation to the STOXX Europe 600 Index (SXXP,
ISIN EU0009658202). It is met if the share price equals the index
performance or if it outperforms the index by at least 10 %.

A maximum of four out of every six SAR s can be “earned” via
the absolute performance target, and a maximum of two via the
relative performance target. If neither an absolute nor a relative
performance target is met by the end of the waiting period, the
SAR s attributable to the related tranche will expire without replace-
ment or compensation.

sar Plan for executives

Since July 2006, selected executives have received annual
tranches of SAR s under the LTIP. This allows them to receive a cash
payment within a defined period in the amount of the difference

between the respective price of Deutsche Post shares and the fixed
issue price if demanding performance targets are met (see disclo-
sures on the 2006 LTIP for members of the Board of Management).
All SAR s granted under the 2006 and 2007 tranches expired at
the end of the respective waiting periods, since the related perfor-
mance targets were not met. After the expiry of the waiting pe-
riod for the 2008 tranche on 30 June 2011, two-sixths of the SAR s
granted became exercisable. They were eligible to be exercised
shortly before the end of the exercise period, as the share price per-
formed well and exceeded the issue price of €18.40. The exercise
period for these SAR s terminated on 30 June 2013. The waiting pe-
riod for the 2009 tranche also ended on 30 June 2013. Due to the
strong share price performance since the SAR s were issued in 2009,
most of these SAR s were exercised in 2013.

More details on the 2006 LTIP / SAR Plan tranches are shown

in the following table:

LtIp 2006 / sar Plan

SAR s

Issue date

Issue price (€)

Waiting period expires

The fair value of the SAR Plan and the 2006 LTIP was deter-
mined using a stochastic simulation model. As a result, an expense
of €202 million was recognised for financial year 2013 (previous
year: €143 million).

See

Note 55.2 for further disclosures on share-based pay-
ment for members of the Board of Management. A provision for
the 2006 LTIP and the SAR Plan was recognised as at the balance
sheet date in the amount of €278 million (previous year: €203 mil-
lion), of which €64 million (previous year: €25 million) was attrib-
utable to the Board of Management. €4 million of the total provi-
sion (previous year: €0 million) related to rights exercisable at the
reporting date.

55 Related party disclosures

55.1 Related party disclosures (companies and Federal Republic

of Germany)

All companies classified as related parties that are controlled
by the Group or on which the Group can exercise significant in-
fluence are recorded in the list of shareholdings, which can be
www.dpdhl.com/en/investors.html, together
accessed on the website,
with information on the equity interest held, their equity and their
net profit or loss for the period, broken down by geographical areas.
Deutsche Post AG maintains a variety of relationships with
the Federal Republic of Germany and other companies controlled
by the Federal Republic of Germany.

2009
tranche

2010
tranche

2011
tranche

2012
tranche

2013
tranche

1 July 2009

1 July 2010

1 July 2011

1 July 2012 1 August 2013

9.52

12.27

12.67

13.26

20.49

30 June 2013

30 June 2014

30 June 2015

30 June 2016

31 July 2017

The federal government is a customer of Deutsche Post AG
and as such uses the company’s services. Deutsche Post AG has
direct business relationships with the individual public authorities
and other government agencies as independent individual custom-
ers. The services provided for these customers are insignificant in
respect of Deutsche Post AG’s overall revenue.

reLatIonsHIps WItH kFW BankenGruppe

KfW supports the federal government in continuing to
privatise companies such as Deutsche Post AG or Deutsche Telekom
AG. In 1997, KfW, together with the federal government, developed
a “placeholder model” as a tool to privat ise government-owned
companies. Under this model, the federal govern ment sells all or
part of its investments to KfW with the aim of fully privatising
these state-owned companies. On this basis, KfW has purchased
shares of Deutsche Post AG from the federal government in several
stages since 1997 and executed various capital market transactions
using these shares. KfW’s current interest in Deutsche Post AG’s
share capital is 21 %. Deutsche Post AG is thus considered to be an
associate of the federal government.

208

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

reLatIonsHIps WItH tHe BunDesanstaLt Für post
unD teLekoMMunIkatIon

reLatIonsHIps WItH tHe GerMan FeDeraL
eMpLoYMent aGenCY

The Bundesanstalt

für Post und Telekommunikation
( BAnstPT) is a government agency and falls under the technical
and legal supervision of the German Federal Ministry of Finance.
Under the Bundesanstalt-Reorganisationsgesetz (German Federal
Agency Reorganisation Act), which entered into force on 1 Decem-
ber 2005, the Federal Republic of Germany directly undertakes the
tasks relating to holdings in Deutsche Bundespost successor com-
panies through the Federal Ministry of Finance. It is therefore no
longer necessary for the BAnstPT to perform the “tasks associated
with ownership”. The BAnstPT manages the social facilities such as
the Postal Civil Service Health Insurance Fund, the recreation pro-
gramme, the Versorgungsanstalt der Deutschen Bundespost (VAP)
and the welfare service for Deutsche Post AG, Deutsche Postbank
AG and Deutsche Telekom AG, as well as setting the objectives for
social housing. Since 1 January 2013, the BAnstPT has undertaken
the tasks of the special pension fund for postal civil servants (Post-
beamtenversorgungskasse). The fund makes pension and assistance
payments to the beneficiaries and their surviving dependents allo-
cated to the Deutsche Bundespost successor companies. Further
disclosures on the special pension fund for postal civil servants
Note 7. The tasks are performed on the basis of
can be found in
agency agreements. In 2013, Deutsche Post AG was invoiced for
€65 million (previous year: €70 million) in instalment payments
relating to services provided by the BAnstPT.

reLatIonsHIps WItH tHe GerMan FeDeraL MInIstrY
oF FInanCe

In financial year 2001, the German Federal Ministry of
Finance and Deutsche Post AG entered into an agreement that
governs the terms and conditions of the transfer of income received
by Deutsche Post AG from the levying of the settlement payment
under the Gesetze über den Abbau der Fehlsubventio nierung im
Wohnungs wesen (German Acts on the Reduction of Mis directed
Housing Subsidies) relating to housing benefits granted by
Deutsche Post AG. Deutsche Post AG transfers the amounts to the
federal government on a monthly basis.

Deutsche Post AG also entered into an agreement with the
Federal Ministry of Finance dated 30 January 2004 relating to the
transfer of civil servants to German federal authorities. Under this
agreement, civil servants are seconded with the aim of transferring
them initially for six months, and are then transferred permanently
if they successfully complete their probation. Once a permanent
transfer is completed, Deutsche Post AG contributes to the cost
incurred by the federal government by paying a flat fee. In 2013,
this initiative resulted in 26 permanent transfers (previous year: 11)
and 33 secondments with the aim of a permanent transfer in 2014
(previous year: 16).

Deutsche Post AG and the German Federal Employment
Agency entered into an agreement dated 12 October 2009 relating
to the transfer of Deutsche Post AG civil servants to the Federal
Employment Agency. In 2013, as in the previous year, this initiative
resulted in no transfers.

reLatIonsHIps WItH DeutsCHe teLekoM aG
anD Its suBsIDIarIes

The federal government holds around 32 % of the shares of
Deutsche Telekom AG directly and indirectly (via KfW). A control
relationship exists between Deutsche Telekom AG and the federal
government because the federal government, despite its non-con-
trolling interest, has a secure majority at the Annual General Meet-
ing due to its average presence there. Deutsche Telekom AG is
therefore a related party of Deutsche Post AG. In financial year 2013,
Deutsche Post DHL provided goods and services (mainly trans-
port services for letters and parcels) for Deutsche Telekom AG and
purchased goods and services (such as IT products) from Deutsche
Telekom AG.

reLatIonsHIps WItH DeutsCHe BaHn aG
anD Its suBsIDIarIes

Deutsche Bahn AG is wholly owned by the federal govern-
ment. Owing to this control relationship, Deutsche Bahn AG is a
related party to Deutsche Post AG. Deutsche Post DHL has various
business relationships with the Deutsche Bahn Group. These
mainly consist of transport service agreements.

BunDes-pensIons-servICe Für post
unD teLekoMMunIkatIon e.v.

Disclosures on the Bundes-Pensions-Service für Post- und

Telekommunikation e. V. (BPS-PT) can be found in

Note 7.

reLatIonsHIp WItH pensIon FunDs

The real estate with a fair value of €1,016 million (previ-
ous year: €995 million), of which Deutsche Post Betriebsrenten
Service e. V. (DPRS) and / or Deutsche Post Pensions-Treuhand
GmbH & Co. KG, Deutsche Post Betriebsrenten-Service e. V. & Co.
Objekt Gronau KG and Deutsche Post Grundstücks-Vermie-
tungsgesellschaft beta mbH Objekt Leipzig KG are the legal or
beneficial owners, is exclusively let to Deutsche Post Immobilien
GmbH. Rental expense for Deutsche Post Immobilien GmbH
amounted to €66 million in 2013 (previous year: €65 million). The
rent was always paid on time. Deutsche Post Pensions-Treuhand
GmbH & Co. KG owns 100 % of Deutsche Post Pensionsfonds AG.
Notes 7 and 44.
Further disclosures on pension funds can be found in

Deutsche Post DHL 2013 Annual Report

209

Notes
Other disclosures

Consolidated Financial Statements

reLatIonsHIps WItH unConsoLIDateD CoMpanIes,
assoCIates anD joInt ventures

In addition to the consolidated subsidiaries, the Group has
direct and indirect relationships with unconsolidated companies,
associates and joint ventures deemed to be related parties of the
Group in the course of its ordinary business activities. As part of
these activities, all transactions for the provision of goods and ser-
vices entered into with unconsolidated companies were conducted
on an arm’s length basis at standard market terms and conditions.
Transactions were conducted in financial year 2013 with
major related parties, resulting in the following items in the con-
solidated financial statements:

55.2 Related party disclosures (individuals)

In accordance with IAS 24, the Group also reports on trans-
actions between the Group and related parties or members of their
families. Related parties are defined as the Board of Management,
the Supervisory Board and the members of their families.

There were no reportable transactions or legal transactions

involving related parties in financial year 2013.

The remuneration of key management personnel of the
Group requiring disclosure under IAS 24 comprises the remuner-
ation of the active members of the Board of Management and the
Supervisory Board.

The active members of the Board of Management and the

Super visory Board were remunerated as follows:

€ m

Receivables

from associates

from joint ventures

from unconsolidated companies

Loans

to associates

to joint ventures

to unconsolidated companies

Receivables from in-house banking

from associates

from joint ventures

from unconsolidated companies

Financial liabilities

to associates

to joint ventures

to unconsolidated companies

Liabilities

to associates

to joint ventures

to unconsolidated companies

Revenue

from associates 1

from joint ventures

from unconsolidated companies

Expenses 2

due to associates 1

due to joint ventures

due to unconsolidated companies

1 Revenue and expenses include Deutsche Postbank AG-related amounts up to and

including February 2012.

2 Relate to materials expense and staff costs.

Deutsche Post AG issued letters of commitment in the
amount of €81 million (previous year: €101 million) for these com-
panies. Of this amount, €76 million (previous year: €94 million)
was attributable to associates, €1 million (previous year: €3 mil-
lion) to joint ventures and €4 million (previous year: €4 million) to
unconsolidated companies.

2012

2013

€ m

264

176

189

167

Short-term employee benefits
(excluding share-based payment)

Post-employment benefits

Termination benefits

Share-based payment

Total

2012

2013

As well as the aforementioned benefits for their work on the
Supervisory Board, the employee representatives who are on the
Supervisory Board and employed by the Group also receive their
normal salaries for their work in the company. These salaries are
determined at levels that are commensurate with the salary appro-
priate for the function or work performed in the company.

Post-employment benefits are recognised as the service cost
resulting from the pension provisions for active members of the
Board of Management. The corresponding liability amounted to
€23 million as at the reporting date (previous year: €20 million).

The share-based payment amount relates to the relevant
expense recognised for financial years 2012 and 2013. It is itemised
in the following table:

Share-based payment

Thousands of €

Dr Frank Appel, Chairman

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen

Walter Scheurle 1

Angela Titzrath 2

Share-based payment

1 Until 30 April 2012.
2 Since 1 May 2012.

2012

SAR s

4,188

2,558

626

2,648

2,597

2,590

4,050

136

19,393

2013

SAR s

12,894

7,322

3,460

7,610

7,428

7,311

–

1,183

47,208

210

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Notes
Other disclosures

55.3 Remuneration disclosures in accordance with the HGB

BoarD oF ManaGeMent reMuneratIon

The total remuneration paid to the active members of the
Board of Management in financial year 2013 including the com-
ponents with a long-term incentive effect totalled €20.5 million
(previous year: €20.3 million). Of this amount, €7.8 million (previ-
ous year: €7.6 million) is attributable to non-performance-related
components (annual base salary and fringe benefits), €5.4 million
(previous year: €5.7 million) to performance-related components
(variable components) and €7.3 million (previous year: €7.0 mil-
lion) to components with a long-term incentive effect (SAR s). The
number of SAR s was 1,984,818 (previous year: 2,108,466).

ForMer MeMBers oF tHe BoarD oF ManaGeMent

The remuneration of former members of the Board of Manage-
ment or their surviving dependants amounted to €4.4 million in
the year under review (previous year: €4.6 million). The defined
benefit obligation (DBO) for current pensions calculated under
IFRS s amounted to €72 million (previous year: €78 million).

reMuneratIon oF tHe supervIsorY BoarD

The total remuneration of the Supervisory Board in financial
year 2013 amounted to around €1.4 million (previous year:
€1.9 million); €1.2 million of this amount was attributable to a
fixed component (previous year: €1.2 million) and €0.2 million to
attend ance allowances (previous year: €0.2 million). The condi-
tions for the performance-based remuneration for 2011 were not
met as at 31 December 2013 (previous year: payment of €0.4 mil-
lion to active members of the Supervisory Board as performance-
based remuneration for financial year 2010 and of €42 thousand to
former members of the Supervisory Board).

Further information on the itemised remuneration of the
Board of Management and the Supervisory Board can be found in
the Corporate Governance Report. The remuneration report con-
tained in the Corporate Governance Report also forms part of the
Group Management Report.

sHareHoLDInGs oF tHe BoarD oF ManaGeMent
anD supervIsorY BoarD

As at 31 December 2013, shares held by the Board of Manage-
ment and the Supervisory Board of Deutsche Post AG amounted to
less than 1 % of the company’s share capital.

reportaBLe transaCtIons

The transactions of Board of Management and Supervisory
Board members involving securities of the company and notified
to Deutsche Post AG in accordance with section 15a of the Wert-
papierhandelsgesetz (WpHG – German Securities Trading Act)
www.dpdhl.com/en/
can be viewed on the company’s website at
investors.html.

56 Auditor’s fees

The following fees for services rendered by the auditor of the
consolidated financial statements, PricewaterhouseCoopers Aktien-
gesellschaft Wirtschaftsprüfungsgesellschaft, were recognised as an
expense in financial year 2013 and in the previous year:

€ m

Audits of the financial statements

Other assurance or valuation services

Tax advisory services

Other services

Auditor’s fees

2012

2013

57 Exemptions under the HGB and local foreign legislation

For financial year 2013, Deutsche Post AG has exercised the
simplification options under section 264 (3) of the HGB or section
264 b of the HGB for the following companies:
• Adcloud GmbH
• Agheera GmbH
• Albert Scheid GmbH
• CSG GmbH
• CSG.TS GmbH
• Danzas Deutschland Holding GmbH
• Danzas Grundstücksverwaltung Groß-Gerau GmbH
• Deutsche Post Adress Beteiligungsgesellschaft mbH
• Deutsche Post Assekuranz Vermittlungs GmbH
• Deutsche Post Beteiligungen Holding GmbH
• Deutsche Post Com GmbH
• Deutsche Post Consult GmbH
• Deutsche Post Customer Service Center GmbH
• Deutsche Post DHL Beteiligungen GmbH
• Deutsche Post DHL Corporate Real Estate Management GmbH
• Deutsche Post DHL Inhouse Consulting GmbH
• Deutsche Post DHL Research and Innovation GmbH
• Deutsche Post Direkt GmbH
• Deutsche Post E-Post Development GmbH
• Deutsche Post E-POST Solutions GmbH
• Deutsche Post Fleet GmbH
• Deutsche Post Immobilien GmbH
• Deutsche Post InHaus Services GmbH
• Deutsche Post Investments GmbH
• Deutsche Post IT BRIEF GmbH
• Deutsche Post IT Services GmbH
• Deutsche Post Shop Essen GmbH
• Deutsche Post Shop Hannover GmbH
• Deutsche Post Shop München GmbH
• Deutsche Post Signtrust und DMDA GmbH
• DHL Airways GmbH
• DHL Automotive GmbH

Deutsche Post DHL 2013 Annual Report

211

Notes
Other disclosures

Consolidated Financial Statements

58 Declaration of Conformity with the German Corporate

Governance Code

The Board of Management and the Supervisory Board of
Deutsche Post AG jointly submitted the Declaration of Conformity
with the German Corporate Governance Code for financial year
2013 required by section 161 of the AktG. This Declaration of
www.corporate-governance-
Conformity can be accessed online at
code.de and at

www.dpdhl.com/en/investors.html.

59 Significant events after the balance sheet date

At the end of January, Deutsche Post DHL announced that
it had entered into a new contract with US airline Southern Air,
thereby expanding and extending the partnership with the airline.
Lease obligations amounting to US$ 640 million will arise in this
context.

The domestic parcel business in Poland, the Czech Repub-
lic, Belgium and the Netherlands was consolidated in the MAIL
division, effective 1 January 2014. This business was previously part
of the EXPRESS and GLOBAL FORWARDING, FREIGHT divisions.

On 20 February 2014, the Board of Management, subject to
the consent of the Supervisory Board, resolved upon an ordinary
increase in capital (Authorised Capital 2013) by 656,915 no par-
value shares in order to service the 2009 tranche of the share-based
payment system for executives (Share Matching Scheme) due
on 1 April 2014. The planned dividend payment will increase by
around €0.5 million as a result.

There were no other significant events after the reporting date.

• DHL Automotive Offenau GmbH
• DHL Express Germany GmbH
• DHL Express Network Management GmbH
• DHL Fashion Retails Operation GmbH
• DHL Foodservices GmbH
• DHL Freight Germany Holding GmbH
• DHL Freight GmbH
• DHL Global Forwarding GmbH
• DHL Global Forwarding Management GmbH
• DHL Global Management GmbH
• DHL Home Delivery GmbH
• DHL Hub Leipzig GmbH
• DHL International GmbH
• DHL Logistics GmbH
• DHL Solutions Fashion GmbH
• DHL Solutions GmbH
• DHL Solutions Großgut GmbH
• DHL Solutions Retail GmbH
• DHL Supply Chain (Leipzig) GmbH
• DHL Supply Chain Management GmbH
• DHL Supply Chain VAS GmbH
• DHL Trade Fairs & Events GmbH
• DHL Vertriebs GmbH
• DHL Verwaltungs GmbH
• Erste End of Runway Development Leipzig GmbH
• Erste Logistik Entwicklungsgesellschaft MG GmbH
• European Air Transport Leipzig GmbH
• FIRST MAIL Düsseldorf GmbH
• Gerlach Zolldienste GmbH
• interServ Gesellschaft für Personal- und Beraterdienst-

leistungen mbH

• nugg.ad AG predictive behavioral targeting
• Werbeagentur Janssen GmbH
• Williams Lea & TAG GmbH (formerly Williams Lea GmbH)
• Zweite Logistik Entwicklungsgesellschaft MG GmbH

The following companies make use of the audit exemption

under section 479 A of the UK Companies Act:
• Applied Distribution Group Ltd.
• DHL Exel Supply Chain Ltd.
• Exel Investments Ltd.
• Exel Overseas Ltd.
• Fashion Logistics Ltd.
• Freight Indemnity & Guarantee Company Ltd.
• Joint Retail Logistics Ltd. (formerly Tibbett & Britten Group Ltd.)
• Ocean Group Investments Ltd.
• Ocean Overseas Holdings Ltd.
• Power Europe Development Ltd.
• Power Europe Development No 3 Ltd.
• Power Europe Operating Ltd.
• RDC Properties Ltd.
• T & B Applied Ltd.
• Trucks and Child Safety Ltd.

212

Deutsche Post DHL 2013 Annual Report

Consolidated Financial Statements

Responsibility Statement

RESPONSIBILITY STATEMENT

To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated financial state-
ments give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group, and the management
report of the Group includes a fair review of the development
and performance of the business and the position of the Group,
together with a description of the principal opportunities and risks
associated with the expected development of the Group.

Bonn, 20 February 2014

Deutsche Post AG
The Board of Management

Dr Frank Appel

Ken Allen

Roger Crook

Bruce Edwards

Jürgen Gerdes

Lawrence Rosen

Angela Titzrath

Deutsche Post DHL 2013 Annual Report

213

Independent Auditor’s Report

Consolidated Financial Statements

INDEPENDENT AUDITOR’S REPORT

To Deutsche Post AG

Report on the Consolidated Financial Statements

We have audited the consolidated financial statements of
Deutsche Post AG, Bonn, and its subsidiaries, which comprise the
income statement and the statement of comprehensive income, the
balance sheet, the cash flow statement, the statement of changes in
equity, and the notes to the consolidated financial statements, for
the business year from 1 January to 31 December 2013.

Board of ManageMent’s responsiBility for Consolidated
finanCial stateMents

The Board of Management of Deutsche Post AG, Bonn is
responsible for the preparation of these consolidated financial
statements. This responsibility includes that these consolidated
financial statements are prepared in accordance with the Inter
national Financial Reporting Standards, as adopted by the EU, and
the additional requirements of German commercial law pursuant
to § (Article) 315a Abs. (paragraph) 1 HGB (“Handelsgesetzbuch”:
German Commercial Code) and that these consolidated financial
statements give a true and fair view of the net assets, financial po
sition and results of operations of the group in accordance with
these requirements. The Board of Management is also responsible
for the internal controls as the Board of Management determines
are necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due
to fraud or error.

auditor’s responsiBility

Our responsibility is to express an opinion on these consol
idated financial statements based on our audit. We conducted our
audit in accordance with § 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer (Institute of Public Auditors in Ger
many) (IDW) and additionally observed the International Stand
ards on Auditing (ISA). Accordingly, we are required to comply
with ethical requirements and plan and perform the audit to ob
tain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.

An audit involves performing audit procedures to obtain au
dit evidence about the amounts and disclosures in the consolidated
financial statements. The selection of audit procedures depends on
the auditor’s professional judgment. This includes the assessment
of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In assessing those risks,
the auditor considers the internal control system relevant to the
entity’s preparation of consolidated financial statements that give
a true and fair view. The aim of this is to plan and perform audit
procedures that are appropriate in the given circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
group’s internal control system. An audit also includes evaluating
the appropriateness of accounting policies used and the reason

ableness of accounting estimates made by the Board of Manage
ment, as well as evaluating the overall presentation of the consoli
dated financial statements.

We believe that the audit evidence we have obtained is suffi

cient and appropriate to provide a basis for our audit opinion.

audit opinion

According to § 322 Abs. 3 Satz (sentence) 1 HGB, we state that
our audit of the consolidated financial statements has not led to
any reservations.

In our opinion based on the findings of our audit, the con
solidated financial statements comply, in all material respects, with
IFRSs, as adopted by the EU, and the additional requirements of
German commercial law pursuant to § 315a Abs. 1 HGB and give
a true and fair view of the net assets and financial position of
the Group as at 31 December 2013 as well as the results of oper
ations for the business year then ended, in accordance with these
requirements.

Report on the Group Management Report

We have audited the group management report of Deutsche
Post AG, Bonn, for the business year from 1 January to 31 Decem
ber 2013. The Board of Management of Deutsche Post AG, Bonn, is
responsible for the preparation of the group management report in
accordance with the requirements of German commercial law ap
plicable pursuant to § 315a Abs. 1 HGB. We conducted our audit in
accordance with § 317 Abs. 2 HGB and German generally accepted
standards for the audit of the group management report promul
gated by the Institut der Wirtschaftsprüfer (Institute of Public Au
ditors in Germany) (IDW). Accordingly, we are required to plan
and perform the audit of the group management report to obtain
reasonable assurance about whether the group management report
is consistent with the consolidated financial statements and the
audit findings, as a whole provides a suitable view of the Group’s
position and suitably presents the opportunities and risks of future
development.

According to § 322 Abs. 3 Satz 1 HGB we state, that our audit

of the group management report has not led to any reservations.

In our opinion based on the findings of our audit of the
consolidated financial statements and group management report,
the group management report is consistent with the consolidated
financial statements, as a whole provides a suitable view of the
Group’s position and suitably presents the opportunities and risks
of future development.

Düsseldorf, 20 February 2014

PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

Gerd Eggemann
Wirtschaftsprüfer
(German Public Auditor)

Dietmar Prümm
Wirtschaftsprüfer
(German Public Auditor)

214

Deutsche Post DHL 2013 Annual Report

FURTHER
INFORMATION

215 – 224 d

d Further InFormatIondFURTHER INFORMATION

217

INDEX

218 GLOSSARY

219 GRAPHS AND TABLES

220 LOCATIONS

222 MULTI-YEAR REVIEW

224 CONTACTS

224 PUBLICATION SERVICE

FINANCIAL CALENDAR

Further Information

Index

INDEX

Air freight 17, 23, 26, 28, 34, 67 f., 104

Finance strategy 50 ff., 93, 97, 105, 177

Annual General Meeting 38 ff., 50, 105, 110 ff., 117,
121 f., 129 ff., 174, 225

Articles of Association 38 ff., 129 f.

Auditor’s report 112, 214

Authorised capital 39, 174, 212

First Choice 22, 31, 35, 84, 92, 96

Free cash flow 59, 73, 123, 150, 167, 190

Free float 72 f., 173

Freight 17, 22, 28, 34, 57, 62, 68, 85, 159, 167

Freight forwarding business 67, 84, 104

Balance sheet 48, 55, 58, 60, 93, 98, 137, 140 ff.,
144 ff., 149 ff., 155 ff., 164, 166 ff., 191 ff.

Board of Management 1 ff., 22, 38 ff., 43, 50, 73, 77,
87 ff., 96, 101, 109 ff., 114 f., 116 ff., 123 ff., 141, 174, 191,
207 f., 210 f., 212 f.

Board of Management remuneration 38, 42, 110,
121, 123 ff., 207 f., 210 f.

Bonds 41, 52 ff., 59 f., 105, 144, 155, 185 f., 190 ff.

Brands 21, 85 f., 103, 140, 150, 158, 166

Capital expenditure 27, 32, 36 f., 43, 50, 56 f., 58, 60,
81, 96, 105, 120, 158 f., 168, 189, 222

Capital increase 87, 212

Cash flow statement 37, 58, 138, 140, 189 ff., 222

Change of control 24 f., 125

Consolidated net profit 18, 37, 48, 50, 135 f., 138, 139,
165, 176, 189, 222

Consolidated revenue 18, 36, 48, 49, 135, 141 ff., 149,
158, 161, 222

Contingent capital 39 f., 174

Contract logistics 17, 21 f., 29 f., 35, 57, 62, 69, 85,
104, 159, 167

Global Business Services 21 f., 120, 159

Global economy 44 f., 46, 91 f., 101 f., 104

Global Forwarding 17, 22, 26, 28, 34, 57, 62, 67 f., 85,
110, 159, 167

GLOBAL FORWARDING, FREIGHT 17, 21 f., 28, 34, 55 ff.,
62, 67 f., 73, 75, 81, 85, 100 f., 105, 119 f., 123, 144, 158 f.,
167, 212, 222

Global Mail 16, 22, 25, 62 f., 64, 85, 103, 159

Global trade 44 f., 46 f., 101 ff., 167

GoGreen 79 f., 81, 83, 106

GoHelp 80

Guarantees 51, 54

Illness rate 78

Income statement 135, 140, 144 f., 152, 154 f., 157,
161 ff., 170, 193 f.

Income taxes 37, 50, 135 f., 138, 145 ff., 156, 160,
164 f., 223

Investments 27, 32, 36 f., 38, 43, 50, 56 f., 58, 81, 96,
105, 120, 137, 144, 147, 151, 157, 158 f., 163, 170, 189, 220

Corporate governance 42, 107 ff., 110, 112, 117 ff., 212

Cost of capital 36 f., 52, 167

Credit lines 54, 191

Credit rating 51 f., 54 f., 88, 97, 105

Declaration of Conformity 110, 112, 117, 212

Dialogue Marketing 16, 21 ff., 24 f., 62 f., 85, 103, 159

Dividend 18, 37, 43, 48, 50 ff., 59 f., 71, 87, 105, 112,
138, 165, 176, 190, 212, 223

Letters of comfort 51, 54

Liquidity management 53, 97, 191

MAIL 16, 21 f., 24 f., 32 f., 43, 48 ff., 55, 57, 62 ff., 73,
75, 81, 83, 85, 97, 99, 101, 103 ff., 119 f., 123, 140 ff.,
158 f., 167, 212, 222

Mail Communication 16, 22 f., 24, 62 f., 83, 85, 103, 159

Mandates 116

Market shares 23 f., 27 f., 30, 33, 55

Earnings per share 18, 48, 50, 71, 135, 145 f., 165, 223

EBIT after asset charge 31, 36 f., 43, 50, 101, 106, 123 f.

Net debt 18, 60 f., 97, 175, 223

Employee opinion survey 31, 37, 43, 74, 106, 110,
117, 123

Net gearing 61, 175, 223

Net interest cover 60 f.

E-Postbrief 24, 83, 95, 103, 218

Equity ratio 60 f., 175, 223

EXPRESS 17, 21 f., 26 f., 33 f., 43, 50, 55 ff., 60, 62, 65 f.,
72, 75, 80 f., 84 f., 99, 101, 103, 105, 119 f., 123, 143 f.,
158 f., 167, 212, 223

Net working capital 36 f., 50 f., 58, 68, 167

Ocean freight 17, 23, 28, 34, 67 f., 92, 104

Oil price 45, 102

Operating cash flow 18, 31, 37, 43, 51 f., 58, 62, 106

Opportunity and risk management 88 ff.

Outlook 43, 101 ff.

Parcel Germany 16, 22, 25, 32 f., 43, 57, 62 ff., 73, 75,
83, 85, 92, 94, 99, 101, 103, 105, 159

Pension Service 16, 22, 62, 85, 159

Press Services 16, 22, 24 f., 62 f., 85, 103, 159

Price-to-earnings ratio 71, 223

Profit from operating activities 18, 36, 43, 48, 50,
62, 135, 138, 144, 158 f., 222

Quality 17, 21, 27, 30, 32, 34, 74, 81, 83 ff., 95, 99, 103,
110, 118

Rating 51 f., 54 f., 88, 97, 105

Regulation 22, 47, 55, 94, 206 f.

Responsibility statement 213

Retail outlets 16, 22, 25, 33, 62, 64, 83, 159

Return on sales 18, 33, 36, 48, 62, 64, 66, 68, 70, 223

Revenue 18, 24, 33, 36, 43, 48 f., 53, 62 ff., 94, 103 f.,
134, 141 ff., 143, 149, 158 ff., 161, 222

Road transport 23, 28, 79 f., 104

Segment reporting 158 f., 161

Share capital 38 ff., 173 f., 208, 211

Shareholder structure 73

Share price 71 f., 186, 207 f.

Staff costs 36, 49, 76, 135, 145, 153 f., 160, 162, 183,
207, 223

Strategy 31 ff., 79, 85 f., 99 f., 104, 109 f., 113, 121

Supervisory Board 38 ff., 42, 50, 87, 109 ff., 113, 116 ff.,
123 f., 129 ff., 174, 207, 210 ff.

Supervisory Board committees 109 ff., 113, 117,
119 ff., 129 f.

Supervisory Board remuneration 42, 129 ff., 210 f.

SUPPLY CHAIN 17, 21 f., 29 f., 35, 43, 48 f., 55 ff., 62,
69 f., 73, 75, 85, 92, 100, 104 f., 119 f., 123, 143, 158 f.,
162, 167, 172, 222

Tax rate 146, 223

Trade volumes 46 f., 102 ff.

Training 33 f., 74, 76 f., 96

WACC 36 f., 52, 167

Williams Lea 17, 21 f., 29 f., 57, 62, 69 f., 85, 104, 116,
159, 167, 223

Working capital 36 f., 50 f., 58, 64, 66, 68, 81, 106,
167, 189

Deutsche Post DHL 2013 Annual Report

217

Glossary

Further Information

GLOSSARY

Cross-border mail (outbound)
All outbound international mail.

Dialogue marketing
Market-orientated activities that apply direct
communications to selectively reach target groups
using a personal, individualised approach.

e-Postbrief
A secure and reliable means of online communication
that can be delivered both electronically and by
traditional mail.

Federal Network Agency (Bundesnetzagentur)
German national regulator for electricity, gas, tele-
communications, post and railway.

Maxibrief
Letter measuring a maximum of 353 × 250 × 50 mm
and weighing up to 1,000 g.

Packstation
Parcel machine where parcels and small packages
can be deposited and collected around the clock.

Paketbox
Parcel box for franked parcels and small packages
(maximum dimensions: 50 × 40 × 30 cm).

Postal Act (Postgesetz)
The purpose of the German Postal Act, which
took effect on 1 January 1998, is to promote postal
competition through regulation and ensure the
nationwide provision of appropriate and sufficient
postal services. It includes regulations on licensing,
price control and the universal service.

Preferred periodical
A press product of which more than 30 % consists
of journalistic reporting.

Price-cap procedure
Procedure whereby the German Federal Network
Agency approves prices for certain mail products.
The agency approves prices on the basis of par-
ameters it stipulates in advance, which set the
average changes in these prices within baskets
of services defined by the agency.

Standard letter
Letter measuring a maximum of 235 × 125 × 5 mm
and weighing up to 20g.

Standard periodical
A press product of which no more than 30 % consists
of journalistic reporting.

Targeting
Target-specific advertising on websites aimed
at achieving the highest possible advertising
effectiveness.

Aftermarket logistics
Logistics services for manufacturer exchanges,
returns and repairs.

Intermodal transport
Transport chain combining different modes of trans-
port, often road and rail.

B2C
The exchange of goods, services and information
between companies and consumers.

Lead logistics provider
A logistics service provider who assumes the organisa-
tion of all or key logistics processes for the customer.

Block space agreement
Freight forwarders or shippers enter into block
space agreements with airline companies which
provide them with defined freight capacities on
a regular flight against payment of a fee.

Business process outsourcing
Outsourcing specific business functions to a third-
party service provider.

Less than container load (LCL)
Loads that will not fill a container and are consolidated
for ocean transport.

Less than truckload
Shipment weighing approximately three tonnes that
is smaller than a full truckload and consolidated
with other senders’ and / or receivers’ shipments into
one load for transport.

Collect and return
Goods are picked up from end users at different
addresses, transported to the predetermined repair
company, collected after repair and returned to the
end user.

Maintenance, Repair & Operations
The product relates to the supply of goods which
do not become part of the end product but are
consumed during maintenance, repair and general
operations processes.

Contract logistics
Complex logistics and logistics-related services along
the value chain that are performed by a contract
logistics service provider. Services are tailored to
a particular industry or customer and are generally
based on long-term contracts.

Medical Express
The transport of time-critical or temperature-critical
medical shipments such as blood and tissue samples
to medical facilities, hospitals, laboratories or
research institutes, usually related to clinical trials
of new medications.

Day Definite
Delivery of shipments on a specified day.

DHL Customer Solutions & Innovation (DsI)
A unit in which we merged our key account manage-
ment, Global Customer Solutions (GCS), our innovation
unit, DHL Solutions & Innovation (DSI), and our
strategic sector management in order to deliver on
our customer promise and to bundle all cross-
divisional DHL activities.

e-fulfilment
Fulfilment services for the e-commerce market.

Full truckload
Complete capacity of truck is utilised, from sender
to receiver.

Gateway
Collection point for goods intended for export
and for further distribution of goods upon import;
customs clearance point.

Hub
Collection centre for the trans-shipment and
consolidation of flows of goods.

Inbound logistics
Supply of manufacturing and assembly locations.

Inbound-to-manufacturing
The procurement of goods and their transport from
the place of origin/manufacture to the production line.

Multimodal transport
Combines a minimum of two different means of trans-
port for a shipment, such as air, sea, rail and ground.

Part truckload
Shipment that does not constitute a full truckload but
is transported from point of departure to destination
without trans-shipment.

Same Day
Delivery within 24 hours of order placement.

Supply chain
A series of connected resources and processes from
sourcing materials to delivering goods to consumers.

Time Definite
Delivery of time-critical shipments for which the day
or time of delivery has been specified or guaranteed.

Transported Asset Protection Association (tapa)
A forum that unites manufacturers, logistics providers,
freight carriers, law enforcement authorities and
other stakeholders with the common aim of reducing
losses from international supply chains.

Twenty-foot equivalent unit (teu)
Standardised container unit, 20 feet long, 8 feet wide
(6 × 2.4 metres).

218

Deutsche Post DHL 2013 Annual Report

Further Information

Graphs and Tables

GRAPHS AND TABLES

Selected Key Figures

A.39 Capex by region

GROUP MANAGEMENT REPORT

General Information

A.01 Organisational structure
of Deutsche Post DHL

A.02 Market volumes

A.03 Domestic mail communication market,

business customers, 2013

A.40 Capex and depreciation, amortisation
and impairment losses, full year

A.41 Capex and depreciation, amortisation

and impairment losses, Q 4

A.42 Capex by segment

A.43 Operating cash flow by division, 2013

A.44 Selected cash flow indicators

A.45 Calculation of free cash flow

A.46 Selected indicators for net assets

A.04 Domestic dialogue marketing market, 2013 24

A.47 Net debt

A.05 Domestic press services market, 2013

A.06 Domestic parcel market, 2013

A.07 International mail market

(outbound), 2013

A.08 European international express market,

2011: top 4

A.09 The Americas international express

market, 2011: top 4

A.10 Asia Pacific international express market,

2011: top 4

A.11 Air freight market, 2012: top 4

A.12 Ocean freight market, 2012: top 4

A.13 European road transport market, 2012:

top 5

A.14 Logistics and value-added services
along the entire supply chain

A.15 Contract logistics market, 2012: top 10

A.16 Strategic approaches

A.17 Strategic priorities by division

A.18 EBIT calculation

A.19 EAC calculation

A.20 Net asset base calculation

A.21 Calculation of operating cash flow

Report on Economic Position

A.22 Forecast / actual comparison

A.23 Global economy: growth indicators in 2013 44

A.24 Brent Crude spot price and euro / US dollar

exchange rate in 2013

A.25 Trade volumes: compound annual growth

rate 2012 to 2013

A.26 Major trade flows: 2013 volumes

A.27 Selected indicators for results

of operations

A.28 Consolidated revenue

A.29 Development of revenue, other operating

income and operating expenses

A.30 Consolidated EBIT

A.31 Total dividend and dividend per no-par

value share

A.32 EBIT after asset charge (EAC)

A.33 Net asset base (unconsolidated)

A.34 Finance strategy

A.35 FFO to debt

A.36 Agency ratings

A.37 Financial liabilities

A.38 Operating lease liabilities by asset class

A.48 Key figures by operating division

A.49 Mail Communication: volumes

A.50 Dialogue Marketing: volumes

A.51 Parcel Germany: volumes

A.52 Mail International: volumes

A.53 EXPRESS: revenue by product

A.54 EXPRESS: volumes by product

A.55 Global Forwarding: revenue

A.56 Global Forwarding: volumes

A.57 SUPPLY CHAIN: revenue by sector, 2013

A.58 SUPPLY CHAIN: revenue by region, 2013

Deutsche Post Shares

A.59 Deutsche Post shares: multi-year review

A.60 Peer group comparison: closing prices

A.61 Share price performance

A.62 Shareholder structure

A.63 Shareholder structure by region

Non-financial Figures

A.64 Selected results from the employee

opinion survey

A.65 Number of employees

A.66 Employees by region, 2013

A.67 Staff costs and social security benefits

A.68 Apprenticeship schemes

Deutsche Post DHL, worldwide

A.69 Idea management

A.70 Employees with a disability

(Deutsche Post AG)

A.71 Gender distribution in management, 2013

A.72 Work-family balance

A.73

Illness rate

A.74 Occupational safety
A.75 CO2 e emissions, 2013
A.76 Fuel and energy consumption

A.77 Procurement expenses, 2013

A.78 Brands and business units

A.79 Marketing expenditures, 2013

Opportunities and Risks

A.80 Monte Carlo simulation

A.81 Opportunity and risk management process 89

Expected Developments

A.82 Global economy: growth forecast

102

CORPORATE GOVERNANCE

B.01 Members of the Supervisory Board

B.02 Committees of the Supervisory Board

B.03 Mandates held by the Board

of Management

B.04 Mandates held by the Supervisory Board

113

116

B.05 Remuneration paid to the Group Board

of Management in 2013: cash components 126

B.06 Remuneration paid to the Group Board

of Management in 2013: share-based
component with long-term incentive
effect

126

B.07 Remuneration paid to the Group Board

of Management in 2012: cash components 127

B.08 Remuneration paid to the Group Board

of Management in 2012: share-based
component with long-term incentive
effect

B.09 Pension commitments under the previous

system in financial year 2013:
individual breakdown

B.10 Pension commitments under the previous
system in the previous year (2012):
individual breakdown

127

128

B.11 Board of Management pension commit-

ments under the new system in financial
year 2013: individual breakdown

129

B.12 Board of Management pension commit-

ments under the new system in the previ-
ous year (2012): individual breakdown

B.13 Remuneration paid to Supervisory Board

members in 2013

B.14 Remuneration paid to Supervisory Board

members in 2012

B.15 Variable remuneration paid to Super-
visory Board members for 2010

CONSOLIDATED FINANCIAL STATEMENTS

C.01

Income Statement

C.02 Statement of Comprehensive Income

C.03 Balance Sheet

C.04 Cash Flow Statement

C.05 Statement of Changes in Equity

FURTHER INFORMATION

D.01 Deutsche Post DHL around the world

D.02 Key figures 2006 to 2013

129

130

131

132

135

136

137

138

139

220

222

Deutsche Post DHL 2013 Annual Report

219

Locations

Further Information

LOCATIONS

D.01 Deutsche Post DHL around the world 1

Americas

Antigua and Barbuda

Argentina

Aruba

Bahamas

Barbados

Belize

Bermuda

Bolivia

Brazil

British Virgin Islands

Canada

Cayman Islands

Chile

Colombia

Costa Rica

Dominican Republic

Dutch Antilles

Ecuador

El Salvador

Guadeloupe

Guatemala

Haiti

Honduras

Jamaica

Martinique

Mexico

Nicaragua

Panama

Paraguay

Peru

Puerto Rico

St Lucia

Trinidad and Tobago

Uruguay

USA

Venezuela

Europe

Albania

Austria

Belgium

Bosnia and Herzegovina

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Italy

Latvia

Lithuania

Luxembourg

Macedonia

Malta

Netherlands

Norway

Poland

Portugal

Romania

Russia

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Ukraine

United Kingdom

1 Countries according to the list of shareholdings, which can be accessed on the website

dpdhl.com/en/investors.

220

Deutsche Post DHL 2013 Annual Report

Further Information

Locations

D.01 Deutsche Post DHL around the world 1

Middle East and Africa

Algeria

Angola

Bahrain

Benin

Botswana

Burkina Faso

Cameroon

Central African Republic

Chad

Democratic Republic
of Congo

Egypt

Ethiopia

Gabon

Gambia

Ghana

Guinea

Iran

Iraq

Israel

Ivory Coast

Jordan

Kenya

Kuwait

Lebanon

Lesotho

Liberia

Libya

Madagascar

Malawi

Mali

Mauretania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Oman

Qatar

Republic of Congo

Republic of Equatorial
Guinea

Réunion

Saudi Arabia

Senegal

Sierra Leone

South Africa

Swaziland

Tanzania

Togo

Turkey

Uganda

Asia Pacific

Australia

Bangladesh

Malaysia

Myanmar / Burma

Brunei Darussalam

Nepal

Cambodia

China

East Timor

Fiji

French Polynesia

New Caledonia

New Zealand

Pakistan

Papua New Guinea

Philippines

Singapore

South Korea

Sri Lanka

Taiwan

Thailand

Vietnam

United Arab Emirates

India

Yemen

Zambia

Zimbabwe

Indonesia

Japan

Kazakhstan

Laos

Macau

1 Countries according to the list of shareholdings, which can be accessed on the website

dpdhl.com/en/investors.

Deutsche Post DHL 2013 Annual Report

221

Multi-Year Review

Further Information

MULTI-YEAR REVIEW

D.02 Key figures 2006 to 2013

€ m

Revenue

MAIL

EXPRESS

LOGISTICS

GLOBAL FORWARDING, FREIGHT

SUPPLY CHAIN

FINANCIAL SERVICES

SERVICES

Divisions total

2006
adjusted

2007
adjusted

2008
adjusted

2009
adjusted

2010
adjusted

2011
adjusted

2012
adjusted

2013

15,290

13,463

24,405

–

9,593

2,201

14,569

13,874

–

12,959

14,317

–

14,393

13,637

–

14,179

13,718

–

13,912

9,917

–

11,243

12,183

–

13,913

11,111

–

14,341

13,061

–

13,973

11,691

–

15,118

13,223

–

13,972

12,778

–

15,666

14,340

–

14,452

12,712

–

14,838

14,277

–

64,952

55,719

55,927

47,255

52,426

54,005

56,756

56,279

Corporate Center / Other (until 2006: Consolidation;
until 2007: Corporate Center / Other and Consolidation)

Consolidation

Total (continuing operations)

Discontinued operations

Profit / loss from operating activities (eBIt)

– 4,407

–1,676

–

60,545

–

54,043

10,335

MAIL

EXPRESS

LOGISTICS

GLOBAL FORWARDING, FREIGHT

SUPPLY CHAIN

FINANCIAL SERVICES

SERVICES

Divisions total

Corporate Center / Other (until 2006: Consolidation;
until 2007: Corporate Center / Other and Consolidation)

Consolidation

Total (continuing operations)

Discontinued operations

2,094

288

751

–

1,004

–229

3,908

–36

–

3,872

–

– 557

–

2,133

1,060

–393

– 966

– 871

Consolidated net profit/loss for the period

2,282

1,873

–1,979

Cash flow/investments / depreciation, amortisation
and impairment losses

Total cash flow from operating activities

Total cash flow from investing activities

Total cash flow from financing activities

Investments

Depreciation, amortisation and impairment losses

Assets and capital structure

Non-current assets

Current assets

Equity (excluding non-controlling interests)

Non-controlling interests

Current and non-current provisions

Current and non-current liabilities 1

Total assets

3,922

–2,697

– 865

4,066

1,771

5,151

–1,053

–1,787

2,343

2,196

1,939

– 441

–1,468

3,169

2,662

26,074

25,764

20,517

191,624

209,656

242,447

11,220

2,732

14,233

20,850

11,035

2,778

12,276

21,544

7,826

2,026

10,836

242,276

217,698

235,420

262,964

1,782

–3,235

54,474

11,226

2,179

–2,194

–

362

– 920

–

1,527

–2,581

46,201

1,634

1,302

–2,340

51,388

–

1,260

–2,436

52,829

–

1,203

–2,447

55,512

–

1,251

–2,445

55,085

–

1,391

–790

–

174

–216

–

1,120

1,107

497

–

383

231

–

916

–

440

362

–

1,048

1,110

–

514

419

–

1,226

1,133

–

483

441

–

1,976

–272

–

409

577

–

2,690

– 573

559

2,231

2,825

3,091

3,283

–328

231

–24

693

– 584

–2,710

1,676

1,444

1,620

22,022

12,716

8,176

9,677

16,788

34,738

–395

–1

1,835

–

–389

2,436

–

– 423

–3

2,665

–

– 421

–1

2,861

–

2,630

1,266

1,762

2,211

1,927

–1,651

1,276

1,296

24,493

13,270

10,511

185

9,427

17,640

37,763

2,371

–1,129

–1,547

1,880

1,274

21,225

17,183

11,009

190

9,008

18,201

38,408

–203

2,994

–1,697

–1,772

1,199

2,032

1,339

21,568

12,289

9,019

209

8,978

15,651

33,857

–110

1,494

1,341

21,366

14,112

9,857

191

8,460

16,970

35,478

222

Deutsche Post DHL 2013 Annual Report

Further Information

Multi-Year Review

2006
adjusted

2007
adjusted

2008
adjusted

2009

2010

2011

2012
adjusted

2013

Employees / staff costs
(from 2007: continuing operations)

Total number of employees
(headcount including trainees)

Full time equivalents

as at
31 Dec.

520,112

512,147

512,536

477,280

467,088

471,654

473,626

480,006

463,350

453,626

451,515

424,686

418,946

423,502

428,129

435,285

Average number of employees (headcount)

507,641

500,252

511,292

488,518

464,471

467,188

472,321

479,212

Staff costs

Staff cost ratio 2

Key figures revenue / income / assets
and capital structure

Return on sales 3

Return on equity (ROE) before taxes 4

Return on assets 5

Tax rate 6

Equity ratio 7

Net debt (+) / net liquidity (–) (Postbank at equity) 8

Net gearing (Postbank at equity) 9

Dynamic gearing (Postbank at equity) 10

Key stock data

(Diluted) earnings per share 11

Cash flow per share 11, 12

Dividend distribution

Payout ratio
(distribution to consolidated net profit)

Dividend per share

Dividend yield (based on year-end closing price)

(Diluted) price / earnings ratio 14

€m

years

€

€m

€

18,616

17,169

18,389

17,021

16,609

16,730

17,770

17,785

30.7

31.8

33.8

36.8

32.3

31.7

32.0

32.3

6.4

21.6

2.0

19.7

6.4

3,083

21.4

1.4

1.60

3.28

903

47.1

0.75

3.3

14.3

3.9

8.6

0.9

14.0

5.9

2,858

20.4

1.0

1.15

4.27

1,087

78.6

0.90

3.8

20.4

–1.8

– 9.0

– 0.4

–

3.7

0.5

3.0

0.2

5.4

23.8

3.6

29.8

5.1

6.9

28.3

2,466

–1,690

–1,382

23.7

0.7

–1.40

1.60

725

–

0.60

5.0

– 8.5

–25.7

–1.4

0.53

– 0.48

725

112.6

0.60

4.4

25.5

–14.8

– 0.7

2.10

1.59

786

30.9

0.65

5.1

6.0

4.6

15.2

6.4

23.7

29.2

– 938

– 9.1

– 0.4

0.96

1.96

846

72.7

0.70

5.9

12.4

4.8

23.6

7.4

20.2

27.3

1,952

17.5

– 9.6

1.30

– 0.17

846

51.6

0.70

4.2

12.8

5.2

26.7

8.3

14.0

28.3

1,481

12.8

0.5

1.66

2.48

967 13

46.2

0.80 13

3.0

16.0

Number of shares carrying dividend rights

millions

1,204.0

1,208.2

1,209.0

Year-end closing price

€

22.84

23.51

11.91

13.49

12.70

11.88

16.60

26.50

1 Excluding liabilities from financial services.

2 Staff costs / revenue.

3 EBIT / revenue.

4 Profit before income taxes / average equity (including non-

controlling interests).

5 EBIT / average total assets.

6 Income taxes / profit before income taxes.

7 Equity (including non-controlling interests) / total assets.

8 From 2006: excluding financial liabilities to minority shareholders of Williams Lea. From 2008:

Group Management Report, page 61.

9 Net debt/net debt

and equity (including non-controlling interests).
was used for the calculation.

10 Net debt / cash flow from operating activities.

11 The weighted average number of shares for the period

12 Cash flow from operating activities.

13 Proposal.

14 Year-end closing price / (diluted) earnings per share.

Deutsche Post DHL 2013 Annual Report

223

Contacts
Publication Service

Further Information

CONTACTS

PUBLICATION SERVICE

CONTACTS

INVESTOR RELATIONS

Tel.: + 49 (0) 228 182-6 36 36
Fax: + 49 (0) 228 182-6 31 99
E-mail: ir @ dpdhl.com

PRESS OFFICE

Tel.: + 49 (0) 228 182-99 44
Fax: + 49 (0) 228 182-98 80
E-mail: pressestelle @ dpdhl.com

PUBLICATION

Published on 12 March 2014.

ENGLISH TRANSLATION
Deutsche Post Corporate Language Services et al.

The English version of the 2013 Annual Report of Deutsche Post DHL
constitutes a translation of the original German version.
Only the German version is legally binding, insofar as this does not
conflict with legal provisions in other countries.

ORDERING

EXTERNAL

E-mail: ir @ dpdhl.com

dpdhl.com/en/investors

INTERNAL

GeT and DHL Webshop
Mat. no. 675-602-349

ONLINE VERSION

An online extract and a complete PDF file are available
on the internet.

annualreport2013.dpdhl.com

DEUTSCHE POST DHL IR APP

With the Deutsche Post DHL IR app you can receive investor
relations and financial media news directly on your iPad.