1
EDITORIAL
75 CORPORATE GOVERNANCE
3 COMBINED MANAGEMENT REPORT
87 CONSOLIDATED FINANCIAL STATEMENTS
71 2019 FINANCIAL YEAR
163 FURTHER INFORMATION
Selected key figures
Revenue
Profit from operating activities (EBIT)
Return on sales 1
EBIT after asset charge (EAC)
Consolidated net profit for the period 2
Free cash flow
Net debt 3
Return on equity before taxes
Earnings per share 4
Dividend per share
Number of employees 6
1 EBIT / revenue.
2 After deduction of non-controlling interests.
3 Calculation
4 Basic earnings per share.
5 Proposal.
6 Headcount at the end of the year, including trainees.
Combined Management Report, page 45.
€m
€m
%
€m
€m
€m
€m
%
€
€
2018
61,550
3,162
5.1
716
2,075
1,059
12,303
19.3
1.69
1.15
2019
63,341
4,128
6.5
1,509
2,623
867
13,367
24.6
2.13
1.25 5
547,459
546,924
+/– %
2.9
30.6
–
>100
26.4
–18.1
8.6
–
26.0
–
– 0.1
Q 4 2018
Q 4 2019
16,926
1,134
6.7
509
813
16,956
1,258
7.4
595
858
1,307
1,163
–
–
0.66
–
–
–
–
0.70
–
–
+/– %
0.2
10.9
–
16.9
5.5
–11.0
–
–
6.1
–
–
Websites
Cross-references
Back to the previous page
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
With our Strategy 2025,
we shall continue to
grow in the years ahead,
even in a volatile
economic climate.
2019 was an important year for Deutsche Post DHL Group. We are in
better shape than ever and have a clear view of where we want to go
next. In terms of strategy, we are concentrating on what we do best: our
core business, where digitalisation will continue to play an important
role. By steadily modernising our IT infrastructure and using new tech-
nologies, we simplify day-to-day work for our employees, improve the
customer experience and increase our efficiency. This will enable us to
post continued growth in the years ahead.
Twelve months ago, I shared this thought with you in my interview: “2019
will be challenging but we can overcome the challenges and the measures
we’ve introduced are beginning to pay off.” In fact, we did succeed in getting
the mail and parcel business back on track by restructuring our divisions,
reassigning responsibility in management, boosting productivity and low-
ering indirect costs.
1
DR FRANK APPEL
Chief Executive Officer
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Looking back, I am proud to say that 2019 was a good year for our com-
pany in spite of all the business challenges we faced. All divisions at
Deutsche Post DHL Group continued to grow. We strengthened our earn-
ings power whilst also making significant investments in digitalisation and
the expansion of our networks in order to improve our service and ensure
profitable future growth.
In recent years, we have successfully positioned ourselves as the market
leader in global logistics. Deutsche Post DHL Group is the backbone of
world trade. Our global networks facilitate trade, connecting people and
improving their lives.
how strong the virus’s impact will be, both overall and on our business in
particular. We therefore announced on 28 February 2020 that our earnings
forecast for the current financial year excludes the effects of the virus and
that we would refocus StreetScooter on the operation of its existing fleet
of vehicles.
Our focus:
profitable growth in
our core business.
Our purpose:
connecting people,
improving lives.
We provide secure employment, a good working environment and career
prospects for around 550,000 employees. We make life easier for our cus-
tomers, creating added value and providing meaningful benefits to society.
For our shareholders, we are a good investment in a growing industry.
Our portfolio includes Europe’s leading mail and parcel delivery service
provider and international express, freight forwarding, e-commerce and
supply chain management services. This balanced and focussed portfolio,
the profitable core of our business, enables us to profit from rapidly grow-
ing international markets whilst cushioning us against the volatility of
global trade.
The crisis caused by the coronavirus highlights both the challenges and the
importance of a diversified portfolio. It is currently impossible to estimate
Focussing upon our profitable core business means being aware of our own
strengths and continuing to improve them. Deutsche Post DHL Group is in
better shape than ever. We shall build upon this strong foundation in order
to make the most of opportunities such as those arising from digitalisation
and e-commerce logistics.
DHL had an anniversary in 2019; this successful brand has now been in busi-
ness for fifty years and has had a major impact upon the logistics industry.
There will also be some important milestones in 2020. Deutsche Post AG
was founded 25 years ago with the privatisation of Deutsche Bundespost,
and Deutsche Post shares have been traded on stock exchanges since
November 2000 – a clear success story for us and for the investors who
have accompanied us on this long journey. We aim to add more chapters
to this story.
I firmly believe that our company is on the right course for profitable future
growth in our core business, even in a volatile economic climate, thanks to
our great flexibility, strong corporate culture and clear strategic direction.
2
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
COMBINED MANAGEMENT REPORT
3 – 70
Business model
Business units
4 GENERAL INFORMATION
4
6
11 Strategy
14 Management
16 Disclosures required by takeover law
17 Research and development
17 Remuneration Report
33 Annual Corporate Governance Statement
and non-financial report
Forecast / actual comparison
34 REPORT ON ECONOMIC POSITION
34 Overall assessment
34
35 Economic parameters
36 Significant events
36 Results of operations
Financial position
39
45 Net assets
46 Divisions
DEUTSCHE POST AG (HGB)
Deutsche Post AG as parent company
52
52
52 Opportunities and risks
53 Employees
53 Results of operations
53 Net assets and financial position
54 Expected developments
55 NON-FINANCIAL KEY
PERFORMANCE INDICATORS
55 Employees
56 Safety and health
57 Sustainability
58 Quality
60 Brands
61 EXPECTED DEVELOPMENTS
61 Overall assessment
Forecast period
61
61
Future economic parameters
62 Earnings forecast
62 Expected financial position
63 Additional management indicators
63 OPPORTUNITIES AND RISKS
63 Overall assessment
63 Opportunity and risk management
66 Categories of opportunities and risks
This report comprises the Group Management Report of Deutsche Post DHL Group and the Management Report
of Deutsche Post AG. The presentation mostly covers the Group; information pertaining solely to Deutsche Post AG
is identified as such.
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
GENERAL
INFORMATION
Business model
An international service portfolio
Deutsche Post AG is a listed corporation domiciled in
Bonn, Germany. Under its Deutsche Post and DHL brands,
Organisational structure as at 31 December 2019
Deutsche Post DHL Group provides an international service
portfolio consisting of letter and parcel dispatch, express
delivery, freight transport, supply chain management
and e-commerce solutions. The Group is organised into
five operating divisions: Post & Parcel Germany, Express,
Global Forwarding, Freight, Supply Chain and eCommerce
Solutions. The services offered are described in the section
on
Business units, page 6 ff. Each of the divisions is man-
aged by its own divisional headquarters and subdivided
into functions, business units and regions for reporting
purposes.
The internal services that support the entire Group
are consolidated in our Global Business Services unit.
Group management functions are centralised in Corporate
Functions.
Corporate Functions
CEO,
Global Business Services
Board member
Frank Appel
Finance
Board member
Melanie Kreis
Human Resources,
Corporate Incubations
Post & Parcel
Germany
Express
Divisions
Global
Forwarding,
Freight
Board member
Thomas Ogilvie
Board member
Tobias Meyer
Board member
John Pearson
Board member
Tim Scharwath
Functions
Corporate Accounting &
Controlling
Investor Relations
Corporate Finance
Corporate Audit & Security
Taxes
Divisional Finance Organisa-
tions
Legal Services
Functions
Corporate HR Germany &
Employee Relations
International
Corporate HR Standards &
Processes
HR for Global Functions
Divisional HR Organisations
Business unit
Corporate Incubations
Business units
Post
Parcel
Regions
Europe
Americas
Asia Pacific
MEA (Middle
East and Africa
Business units
Global
Forwarding
Freight
Functions
Board Services
Corporate Legal
Corporate Office
Corporate Development &
First Choice
Corporate Executives
Corporate Communications,
Sustainability & Brands
Corporate Public Policy & Reg-
ulation Management
Global Business Services
(Corporate Procurement,
Corporate Real Estate, IT
Services, Insurance & Risk
Management etc.)
Supply Chain
Board member
Oscar de Bok
Regions
EMEA
(Europe,
Middle East
and Africa)
Americas
Asia Pacific
eCommerce
Solutions
Board member
Ken Allen
Regions
Americas
Europe
Asia
Function
Customer
Solutions &
Innovation
4
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Organisational changes
On 1 January 2019, Ken Allen assumed responsibility for the
newly created eCommerce Solutions division. The Express
division has been led by John Pearson since 1 January 2019.
Since 1 April 2019, Tobias Meyer has been responsible
for the Post & Parcel Germany division, which was previ-
ously managed concurrently by CEO Frank Appel.
In June 2019, Tim Scharwath’s seat on the Board of Man-
agement and his contract were renewed until May 2025.
In September, the Supervisory Board extended Thomas
Ogilvie’s contract for five years until August 2025. Thomas
Ogilvie is the Labour Director and Board of Management
member responsible for Human Resources and Corporate
Incubations.
The Supply Chain board department has been run by
Oscar de Bok since 1 October 2019, following John Gilbert’s
resignation from the Board for personal reasons effective
as of 30 September 2019.
A presence that spans the globe
Deutsche Post DHL Group’s locations can be found in the
list of shareholdings, dpdhl.com / en / investors. The following
graphic provides an overview of market volumes in key re-
gions. Our market shares are detailed in the business units
section below.
Market volumes 1
Global
(2018)
57
M TEUs
Ocean freight3
217
€ BN
Contract logistics4
24
€ BN
International
express market
(2016)5
Germany
(2019)
24
M TONNES
Air freight2
(2018)
Air freight (m tonnes) 2
Ocean freight (m TEUs) 3
Contract logistics (€ bn) 4
International express market (€ bn) 5
Road transport (€ bn) 8
Middle East/Africa
1.5
5.8
7.4
–
–
Americas
5.4
9.2
64.1
8.2 (2016)
–
4.2
€ BN
Mail
communication6
Europe
6.6
8.4
72.5
7.1 (2016)
206
26.9
€ BN
Advertising
market7
Asia Pacific
11.0
33.9
73.2
8.0 (2016)
–
1 Regional volumes do not add up to global volumes due to rounding. 2 Data based solely upon export freight tonnes. Source: Seabury Consulting. 3 Twenty-foot equivalent units; estimated share of total market controlled by forwarders. Data based
solely upon export freight tonnes. Source: company estimates, Seabury Consulting. 4 According to company estimates. 5 Includes the Time Definite International express product. Country base: Americas, Europe, Asia Pacific, AE, SA, ZA (Global);
AR, BR, CA, CL, CO, MX, PA, US (Americas); AT, CZ, DE, ES, FR, IT, NL, PL, RO, RU, SE, TR, UK (Europe); AU, CN, HK, IN, JP, KR, SG, TW (Asia Pacific). Source: Market Intelligence, 2017, annual reports and desk research. 6 Only business communications.
Source: company estimates. 7 Includes all advertising media with external distribution costs. Source: company estimates. 8 Market volume covers 25 European countries, excluding bulk and specialties transport. Source: DHL Market Intelligence
Study 2019, based upon company calculations and content supplied by IHS Markit Group, copyright © IHS Global Inc., 2019. All rights reserved.
5
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Business units
POST & PARCEL GERMANY DIVISION
Nationwide transport and delivery network in Germany, 2019
Around
13,000
retail outlets
Around
110,000
post boxes
Around
10,500
Paketshops
82
mail centres
Around
2,300
sales points
Around
5.2million parcels
per working day
Around
113,500
letter and parcel
deliverers
Around
55million letters
per working day
Around
4,400
Packstations
36
parcel centres
The postal service for Germany
As Europe’s largest postal company, we deliver around
55 million letters every working day in Germany. Our prod-
ucts and services are targeted towards both private and
business customers and range from physical and hybrid
letters to special products for merchandise delivery, and
include additional services such as registered mail, cash
on delivery and insured items.
In the year under review, the German market for mail
communication for business customers was worth around
€4.2 billion (previous year: around €4.3 billion). Here we
look at the business customer market in which we compete,
including the companies that operate as service providers
in this market – i. e., both competitors offering end-to-end
services and consolidators providing partial services. Our
market share declined slightly to 62.2 % compared with the
prior year (63.4 %).
German mail communication market,
business customers, 2019
Market volume: around €4.2 billion
Deutsche Post
Competition
Source: company estimates.
62.2 %
37.8 %
Cross-channel customer dialogue
On request, our dialogue marketing unit offers end-to-end
solutions to advertisers – from address services and tools
for design and creation all the way to printing, delivery and
evaluation. This supports cross-channel, personalised and
automated customer dialogue so that digital and physical
items with inter-related content reach recipients according
to a co-ordinated timetable and without any coverage waste.
6
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
The advertising market in Germany reported a slight
drop of 0.1 % in 2019 to come in at €26.9 billion. Our share
of this highly fragmented market declined to 7.5 % (previous
year: 7.8 %).
German advertising market 1, 2019
Market volume: €26.9 billion
Competition
Deutsche Post
92.5 %
7.5 %
1 Includes all advertising media with external distribution costs; the placement
costs are shown as ratios.
Source: company estimates.
Dense parcel network further expanded
We maintain a dense network of parcel acceptance and
drop-off points in Germany, which we made even denser
in the reporting year. Our portfolio of recipient services
allows our customers to receive their parcels individually
and conveniently. They can decide at short notice whether
their parcels should be delivered to an alternative address,
a specific retail outlet or a Paketshop. We support business
customers in growing their online retail businesses and we
can cover the entire logistics chain through to returns man-
agement on request.
The German parcel market continues to be subject to
competition-driven structural changes. Thus, in addition
to the services offered by the established providers, new
players have also entered the market, at least some of
which provide the delivery of mail items as part of their
own e-commerce offering.
The overall larger market volume including these
deliveries can only be estimated; we expect our share of
this volume to be a good 40 % in 2019, roughly unchanged
from 2018.
freight sector. The largest buyer of remaining capacity is
the DHL Global Forwarding business unit.
EXPRESS DIVISION
A global express network
In the Express division, we transport urgent documents and
goods reliably and on time from door to door. Our global
network spans more than 220 countries and territories
in which some 105,000 employees provide services to
around 2.7 million customers.
Time-definite international shipments: our core business
The division’s main product is Time Definite International
(TDI). Our TDI services enable delivery at predefined
times, and our expertise in customs clearance keeps ship-
ments moving as a key factor in ensuring fast and reliable,
door-to-door service. We also provide industry-specific
services to complement our TDI product. For example,
our Medical Express transport solution, which is tailored
specifically to customers in the Life Sciences & Health-
care sector, offers various types of thermal packaging for
temperature- controlled, chilled and frozen contents.
Our virtual airline
Our global air freight network is operated by multiple air-
lines, some of which are wholly owned by the Group. The
combination of our own and purchased capacities allows
us to respond flexibly to fluctuating demand. The follow-
ing graphic illustrates how our available freight capacity is
organised and offered on the market. Most of the freight
capacity is used for TDI, our main product. If any of our
cargo space remains, we sell it to customers in the air
Available capacity
BSA
Block Space Agreement –
guaranteed air cargo
product.
Core
Express TDI core
product – capacity
based upon average
utilisation, adjusted
on a daily basis.
ACS
Air Capacity Sales,
total spare
capacity – average
capacity not uti-
lised by Block Space
or TDI Core
on a planned basis.
BSA
CORE
ACS
Modernising our intercontinental fleet
In 2018, we contracted with Boeing to purchase 14 new
777F aircraft as part of upgrading our intercontinental fleet.
The first four aeroplanes were delivered and added to our
network in 2019. The next six planes are planned for deliv-
ery during 2020.
7
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Trade boosts international express business
The international express business is benefiting from
cross-border e-commerce as well as the growing import-
ance of small and medium-sized enterprises in the e-com-
merce segment. We therefore focus upon a select mix of
customers and cost-efficient delivery to ensure profitable
growth.
Continuing to expand and modernise the European
network
In the Europe region, we are reinforcing our network by
steadily expanding our infrastructure and modernising our
fleet. In total five Airbus A330-200s were added to the fleet
in the past two years. In addition, Aerologic has been flying
for us since October 2019 with direct flights between Co-
logne / Bonn and Hong Kong. In November 2019, our newly
built logistics centre was officially inaugurated at Cologne
Bonn Airport. Additional projects are planned, including the
opening of the new or expanded hubs in Milan (Malpensa),
Istanbul and Paris.
Additional investments in Asia
We opened new locations in Sri Lanka, Indonesia, Malay-
sia, Vietnam, New Zealand, Australia, Taiwan, Japan and
Thailand. We also announced the expansion of our Incheon
gateway in South Korea last October. In addition, the third
Airbus we converted – an A330-300 – was put into oper-
ation. A new direct flight has been established to serve
rapidly growing regions in the Philippines. In China, we
entered into a strategic partnership with EHang, a drone
manufacturer. The idea is to jointly develop fully automated,
intelligent delivery solutions for China’s metropolitan areas.
Reliable partner in the MEA region
In the MEA (Middle East and Africa) region, the Middle East
continued to suffer from the sometimes unstable political
situation in 2019. We were nonetheless able to maintain
our operations whilst ensuring the safety of our employees.
GLOBAL FORWARDING, FREIGHT DIVISION
Expanding service in the Americas region
The air fleet was upgraded with the addition of three Boeing
767-300s, all converted from passenger to freight aircraft.
In the USA, we opened a new gateway in Chicago and mod-
ernised our gateway at JFK Airport in New York, amongst
other things. In Canada, we are investing in a new gate-
way in Hamilton. We plan to make this gateway one of our
biggest inbound locations worldwide. In Latin America, we
continued making infrastructure improvements in Brazil
and Mexico.
The air, ocean and overland freight forwarder
Our air, ocean and overland freight forwarding services
include standardised transport as well as multimodal and
sector-specific solutions, together with individualised in-
dustrial projects. Our business model is based upon bro-
kering transport services between customers and freight
carriers. The global presence of our network allows us to
offer efficient routing and multimodal transport. Compared
with the other divisions, our operating business model is
asset-light.
Leading the air freight market
According to the International Air Transport Association
(IATA), total freight tonne kilometres flown decreased by
4 % worldwide in the year under review. The biggest de-
clines were seen in the USA and China, the world’s largest
air freight markets. We remained the market leader in 2018
with around 2.2 million tonnes of export air freight trans-
ported, as shown in the following graphic.
Air freight market, 2018: top 5
Thousands of tonnes 1
DHL
Kuehne + Nagel
DB Schenker
Panalpina 2
DSV
2,150
1,743
1,304
1,039
689
1 Data based solely upon export freight tonnes.
2 Was taken over by DSV in 2019.
Source: annual reports, publications and company estimates.
Ocean freight market continues to consolidate
The ocean freight market continued to see slight growth in
2019 with consolidation continuing on the carrier side. Over-
capacity persisted in the container ship market – a trend
that is expected to be sustained in the coming years. With
around 3.2 million twenty-foot equivalent units transported,
8
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
we remained the second-largest provider of ocean freight
services in 2018, as shown in the following table.
European road transport market, 2018: top 5
Market volume: €206 billion 1
Ocean freight market, 2018: top 5
Thousands of TEUs 1
Kuehne + Nagel
DHL
DB Schenker
Panalpina 2
DSV
4,690
3,225
2,203
1,484
1,442
1 Twenty-foot equivalent units.
2 Was taken over by DSV in 2019.
Source: annual reports, publications and company estimates.
European road transport market posts moderate growth
In the European road transport market, growth slowed
down in the second half of 2019, driven mainly by a de-
clining growth in volume. In a fragmented and competitive
environment, DHL Freight remained the second-largest
provider in 2018 with a market share of 2.2 %.
DB Schenker
DHL
DSV
Dachser
Kuehne + Nagel
3.4 %
2.2 %
1.8 %
1.7 %
1.5 %
1 Total market for 25 European countries, excluding bulk goods and specialties
transports.
Source: DHL Market Intelligence Study 2019, based upon the company’s
calculations and content supplied by IHS Markit Group, copyright © IHS Global
Inc, 2019. All rights reserved.
SUPPLY CHAIN DIVISION
Customer-centric contract logistics solutions
As the world leader in the contract logistic market, we man-
age supply chains to reduce complexity for our customer.
This is our profitable core, which includes warehousing,
transport as well as value-added services such as Lead
Logistics Partner (LLP),
Glossary, page 166, Real Estate
Solutions, Service Logistics, packaging and e-fulfilment
along strategic industry verticals. We also develop innova-
tion and sustainable solutions.
Continuing to automate and digitalise the supply chain
In the interest of our customers, we ensure that our stand-
ard tools are seamlessly embedded into all of their pro-
cesses. Flexible automation technologies, such as wearable
devices and collaborative robotics, are being scaled across
our operations to take us to the next level in efficiency. We
are constantly striving to increase efficiency along the entire
supply chain through standardisation and the use of new
technologies. Whilst these efforts generally benefit all sec-
tors, we see the largest demand in the retail and consumer
sectors, which account for approximately half of the Sup-
ply Chain division’s revenue. The automation technologies
shown in the graphic on
page 10 are being introduced in
all regions in order to make us even more agile.
Leading position in contract logistics
The global contract logistics market is estimated at around
€217 billion. DHL remains the global market leader in con-
tract logistics with a market share of 6.1 % (2018) and op-
erations in more than 50 countries.
Contract logistics market, 2018: top 10
Market volume: €217.3 billion
DHL
XPO Logistics
Kuehne + Nagel
Hitachi Transport System
CEVA
UPS SCS
SNCF Geodis
DB Schenker
Ryder
DSV
6.1 %
2.4 %
2.2 %
1.6 %
1.5 %
1.3 %
1.2 %
1.2 %
0.9 %
0.8 %
Source: company estimates; Transport Intelligence. Market shares are on the
basis of divisional revenue.
9
Deutsche Post DHL Group – 2019 Annual Report
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MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Automation and digitalisation of the supply chain
ECOMMERCE SOLUTIONS DIVISION
Robotic arms
Robotics for inventory
management
Goods-to-person
robots
Building security
with drones
Indoor robotic
transport
Assisted picking
robots
Wearables
Track & trace via
MySupplyChain
International delivery for the e-commerce sector
Since financial year 2019, we have been pooling our inter-
national parcel delivery operations in our new eCommerce
Solutions division. The new division is geared towards pro-
viding high-quality solutions, particularly to customers in
the rapidly growing e-commerce sector. Core activities
include national last-mile parcel delivery in selected Eu-
ropean and Asian countries and the United States. We also
supply cross-border non-TDI services, especially to, from
and within Europe.
The business is managed by the regions in which we
operate.
eCommerce Solutions’ regions and services
Americas
Europe
Nationwide B2C delivery in the United States
and worldwide / cross-border shipping from
the United States and Canada
Nationwide 2C and 2B delivery in seven countries
and across Europe / cross-border services
Nationwide delivery by partners
Russia
India (Blue Dart) Nationwide courier services and integrated
Asia Pacific
express parcel distribution
Nationwide 2C delivery in Thailand, Malaysia,
Vietnam (cross-border shipping from China,
Australia, Singapore)
10
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
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2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Strategy
CORPORATE STRATEGY
Strategy 2025 – Delivering excellence in a digital world
Our Strategy 2025 provides a foundation for continuing our
profitable growth trajectory going forwards. The four trends
of globalisation, e-commerce, digitalisation and sustainabil-
ity will remain important drivers of growth for the logistics
sector and are reflected in our corporate strategy.
Aiming for lasting industry leadership
Our purpose is to connect people and improve their lives by
enabling trade and helping businesses to grow. In keeping
with our vision to be THE logistics company for the world,
Deutsche Post DHL Group strives to continue leading the
industry in an increasingly digitalised world. Our core
values of Respect and Results are just as much a part of
our strategy today as they have been in the past.
Becoming the Employer, Provider and Investment
of Choice
Our customer promise “Excellence. Simply delivered.” is
defined by our three bottom lines: becoming the Employer,
Provider and Investment of Choice. We consider having
motivated and skilled employees is the key to providing
excellent service quality and achieving profitable growth.
Our work benefits from our common DNA, which is a set
of behaviours, tools and initiatives that we put into prac-
tice every day. In the interest of ensuring a common basis
of understanding, we continually expand our Group-wide
“Certified” initiative, including modules for executives. We
use our annual Employee Opinion Survey to measure our
Employees, page 55. Our regu-
progress, as described in
lar customer satisfaction surveys allow us to measure our
Our Purpose
Connecting people,
improving lives
Our Vision
We are THE logistics company for the world
Our Values
Respect & Results
Our Mission
Excellence. Simply delivered.
Along the three bottom lines in a sustainable way
Enabled by Common DNA
Our Business Unit focus
Strengthening the profitable core
Supported by Group functions
Digitalisation
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performance against our quality aspiration and to iden-
tify areas for improvement; see
Quality, page 58 f. In all
of our business units, we focus upon delivering profitable
long-term growth. Our First Choice methodology remains
a key lever for triggering continuous improvement. Apart
from the three bottom lines, we have firmly integrated
sustainability and corporate responsibility into our strat-
Sustainability Report, dpdhl.com/
egy, as explained in our
2019sustainabilityreport.
Strategically diversified logistics portfolio
Our divisions form the core of our Group. Since all of the
five divisions have distinct profiles and service offerings, our
Group strategy is structured along multi-divisional lines. We
focus upon the specific growth drivers that will strengthen
the profitable core of our business units, with the goal of
achieving industry-leading margins in all segments.
Digitalisation as a key lever
We see systematic digitalisation throughout the Group as
a key lever in driving forwards our business. That’s why
we’re investing in initiatives designed to enhance both the
customer experience and the employee experience as well
as to improve operational excellence. We are modernising
our IT systems and integrating new technologies with the
aim of steadily improving our performance, our processes
and our standards. Between now and 2025, spending on
digitalisation is expected to reach around €2 billion. This
is projected to contribute at least €1.5 billion annually to
earnings by 2025.
STRATEGIES OF THE DIVISIONS
Post & Parcel Germany division
We connect the people in Germany by transporting, sort-
ing and delivering their mail, whether letters, documents or
merchandise. This also includes digital transmissions such
as information on shipment status and digital messages.
Our customers rightly rely upon us to fulfil our cus-
tomer promise: we are reliable, we adhere to scheduled
delivery times and we make sure that the mail is not dam-
aged or lost. Post & Parcel Germany makes it easy to send
and receive mail. Our actions are environmentally, econom-
ically and socially sustainable, and we work to continuously
improve ourselves.
Our highly qualified employees and high level of ser-
vice quality help us to ensure a sustainable future for our
Group as well as the future of letter and parcel delivery
in Germany. With the “Certified” programme we create a
common basis. We teach our employees how the company
works, how we define and keep our customer promises and
which skills make a manager successful.
Express division
We concentrate upon shipments whose size and weight
make them an optimal match for our network, and in terms
of our pricing policy, we encourage global co-ordination
and discipline. At the same time, we continuously improve
our customer approach. Using global campaigns, we spe-
cifically target small and medium-sized businesses, which
can often benefit from increasing exports.
Our Certified International Specialist training pro-
gramme ensures that our employees have the requisite
knowledge of the international express business at their
disposal, develop mutual understanding and remain per-
manently motivated.
Our return on sales improves when growing volumes
lead to economies of scale in our network, innovation and
automation enhance productivity, and costs are strictly
managed. We are gradually streamlining the IT systems
architecture and are ensuring adherence to global stand-
ards, especially as regards facilities and operating resources.
The majority of our costs are attributable to our air and
ground network. Old aeroplanes are replaced with newer,
more efficient and thus more cost-effective aircraft. We sell
available cargo space to freight and forwarding companies,
improving our network utilisation and reducing costs in
the process. On the ground, processes are automated and
standardised.
Global Forwarding, Freight division
Our emphasis is upon customer orientation and indus-
try-leading, end-to-end quality. In the Global Forwarding
business unit, we are upgrading or replacing our IT systems
to integrate industry-proven solutions. Our focus is upon
improved shipment visibility, electronic document manage-
ment and a new transport management system. In add-
ition, we are working to develop myDHLi, a standardised
customer portal, in order to occupy a leading position in the
digital freight forwarding market and to create a state-of-
the-art customer experience.
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Our emphasis is on
customer orientation
and industry-leading,
end-to-end quality.
We are constantly adding new modules to our Certified
International Forwarder training programme. We are also
honing our talent management processes to promote
women in management positions, amongst other things.
In the Global Forwarding business unit, we want to
keep improving our EBIT-to-gross-profit margin (conver-
sion rate) to raise it to the level of our leading competitors
over the medium term. To this end, we are increasing the
profitability of contracts and aligning costs with business
development.
In the Freight business unit, our new FREIGHT 2025
strategy is continuing the path we have taken up to now. To
keep growing profitably, we continue to rely on employee
engagement, customer focus and digitalisation. Key foun-
dations remain our efficient network, high level of service
quality, improvements in IT systems and data transparency,
as well as sustainable logistics solutions. We are also devel-
oping forward-looking digital solutions such as Saloodo!,
our online road freight platform.
Supply Chain division
To enhance our market-leading position, we have standard-
ised our workflows and are steadily improving our operating
performance. A key element in this is our Operations Man-
agement System First Choice along with the outstanding
service and high quality that set us apart.
all sectors and customer segments. Our USPs are our
high-quality parcel delivery solutions, our reach and our
competitiveness.
The Parcel Connect product, which combines our ser-
vices with those of other postal services and private-sector
service providers, is experiencing strong growth. This vol-
ume growth allows us to invest further in expanding our
network and continually improve our quality.
Our goals are best achieved when motivated and well-
trained employees provide quality service that always fulfils
our customers’ expectations. Our Certified programmes are
tailored to local conditions in the markets in which we op-
erate. Common values, enthusiasm and a clear focus upon
quality are the foundation for all employees and executives.
We have begun introducing the Certified programmes and
will highly prioritise the roll-out in all countries in which
we do business.
We use the full breadth of our capabilities to create
value for our customers and thus establish a basis for
long-lasting, growing customer relationships. Our customer
experience management processes include structured
feedback loops to let us know what our customers need
and enable us to react more quickly to their expectations.
Our “Certified” programmes create motivated and
engaged experts who collaborate as diverse teams and
are helping to shape the future of logistics. Recruitment,
development and employee retention are some of our main
differentiators in the contract logistics market.
Our pioneering role in the complex contract logistics
market is supported by our position as a leader in digital
transformation and our broad use of innovative technol-
ogies. We are making collaborative robotics, data analytics
and process automation a standard part of our operational
workflows through our Accelerated Digitalization pro-
gramme. Our aspiration is to make the digital supply chain
a reality whilst expanding our line of sustainable solutions
and entering into new partnerships. We believe that this
will provide a basis for accelerated growth.
eCommerce Solutions division
Our goal is to leverage our Group footprint, resources and
services to build a platform for cross-border, non-time-crit-
ical solutions that can be connected to the most cost-effi-
cient networks for last-mile delivery. The focus in creating
the platform is upon generating profitable growth across
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Management
FINANCIAL PERFORMANCE INDICATORS
Impact on management remuneration
Deutsche Post DHL Group 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 prior-year data and the
forecast data to assist in making management decisions.
The year-to-year changes in the financial and non-financial
performance metrics portrayed here are also particularly
relevant for calculating management remuneration. The
Group’s financial performance indicators are intended to
preserve a balance between profitability, the efficient use
of resources and adequate liquidity. The performance of
these indicators in the year under review is described in
the
Report on economic position, page 34 ff.
Profit from operating activities: a measure of
earnings power
The profitability of the Group’s operating divisions is meas-
ured as profit from operating activities (EBIT). EBIT is calcu-
lated by on the basis of revenue and other operating income,
deducting materials expense and staff costs, depreciation,
amortisation and impairment losses, and other operating
expenses, and then adding net income from equity-method
investments. Interest and other finance costs / other financial
income are shown in net financial income / net finance costs.
EBIT after asset charge promotes efficient use of
resources
EBIT after asset charge (EAC) is another key performance
indicator used by the Group. EAC is calculated by subtract-
ing the asset charge, a cost of capital component, from
EBIT. Making the asset charge a part of business decisions
encourages the efficient use of resources and ensures that
our operating business is geared towards increasing value
sustainably whilst improving cash flow.
The asset charge is calculated on the basis of the
weighted average cost of capital, or WACC, which is defined
as the weighted average net cost of interest-bearing liabil-
ities 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.
That figure also represents the minimum target for projects
and investments within the Group. The WACC is generally
reviewed once annually on the basis of the current situation
on the financial markets. To ensure better comparability of
asset charge with previous figures, in 2019 the WACC used
here was maintained at a constant level compared with the
previous years.
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. The table “Calculations” shows
the composition of the net asset base.
Free cash flow facilitates liquidity management
Along with EBIT and EAC, cash flow is another key perfor-
mance metric used by Group management. The goal is to
maintain sufficient liquidity to cover all of the Group’s fi-
nancial obligations from debt repayment and dividends, in
addition to meeting payment commitments arising from
the Group’s operations and investments. Cash flow is cal-
culated using the cash flow statement.
Operating cash flow (OCF) includes all items that are
related directly to operating value creation. OCF is calcu-
lated by adjusting EBIT for changes in non-current assets
(depreciation, amortisation and (reversals of) impairment
losses, net income / loss from disposals), other non-cash in-
come and expense, dividends received, taxes paid, changes
in provisions and other non-current assets and liabilities.
Another key parameter impacting OCF is net working cap-
ital. Effective management of net working capital is an im-
portant way for the Group to improve cash flow in the short
to medium term.
Free cash flow (FCF) as a management-related per-
formance indicator is calculated on the basis of OCF by
adding / subtracting the cash flows from capital expend-
iture, leasing, acquisitions and divestitures as well as net
interest paid. Free cash flow is regarded as an indicator of
how much cash is available to the company at the end of a
reporting period for paying out dividends or repaying debt.
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FURTHER INFORMATION
Calculations
Revenue
Other operating income
Changes in inventories and work
performed and capitalised
Materials expense
Staff costs
Depreciation, amortisation and impairment losses
Other operating expenses
Net income from investments accounted
for using the equity method
EBIT
Profit from operating activities
EBIT
Asset charge
Net asset base
Weighted average cost of capital (WACC)
EAC
EBIT after asset charge
Operating assets
Intangible assets
Property, plant and equipment
Goodwill
Trade receivables ( included in net working capital) 1
Other non-current operating assets 2
Operating liabilities
Operating provisions (not including provisions for
pensions and similar obligations)
Trade payables ( included in net working capital) 1
Other non-current operating liabilities 2
Net asset base
EBIT
Depreciation, amortisation and impairment losses
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
Dividends received
Income taxes paid
Operating cash flow before changes
in working capital (net working capital)
Changes in net working capital
Net cash from / used in operating activities
(operating cash flow, OCF)
Cash inflow / outflow arising from change in property,
plant and equipment and intangible assets
Cash inflow / outflow arising from acquisitions /
divestitures
Cash outflow arising from repayments and interest on
lease liabilities
Net interest paid
FCF
Free cash flow
1 Includes EBIT-related current assets and liabilities. Not included are assets and liabilities related to taxes, financing and cash and cash equivalents, for example.
2 Includes EBIT-related other non-current assets and liabilities. Not included are assets and liabilities related to taxes or bonds, for example.
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FURTHER INFORMATION
NON-FINANCIAL PERFORMANCE INDICATORS
Disclosures required by takeover law
Annual worldwide Employee Opinion Survey
Our annual worldwide Employee Opinion Survey, whose re-
sults from this reporting period are presented in
Employees,
page 55, shows us how we are perceived as a Group from the
perspective of our employees and how they view the lead-
ership abilities of their supervisors. The Active Leadership
indicator was used in the calculation of executive bonuses
in the reporting period, as in previous years. From 2020 on-
wards we want to focus upon employee engagement, and
will use this total value for management purposes and in-
clude it in the bonus calculation for executives,
Expected
developments, page 63.
Reducing dependency upon fossil fuels
We aim to reduce our dependency on fossil fuels, improve
our CO2 efficiency and lower costs. We therefore use “green-
house gas efficiency” as a target in our GoGreen environ-
mental protection programme. Greenhouse gas efficiency is
measured using a carbon efficiency index (CEX) based upon
business unit-specific emission intensity figures, which are
indexed to a base year. We quantify the greenhouse gas
emissions upon which our CEX is based in accordance with
the Greenhouse Gas Protocol Standards and DIN EN 16258;
those attributable to our European air freight business are
calculated in accordance with the requirements of the
European Union Emissions Trading System (EU ETS). Pur-
suant to DIN EN 16258, all gases that are harmful to the en-
vironment must be disclosed in the form of CO2 equivalents
(CO2e). CO2e reflects the ratio of the respective emissions to
a matching indicator of Group performance. CEX is used as
a management indicator to quantify the Group’s non-finan-
cial performance. The figures obtained for the year under
review are provided in the section
Sustainability, page 57.
Disclosures required under sections 289 a (1) and 315 a (1)
of the Handelsgesetzbuch (HGB – German commercial
code) and explanatory report.
Composition of issued capital, voting rights and
transfer of shares
As at 31 December 2019, the company’s share capital
totalled €1,236,506,759 and was composed of the same
number of no-par value registered shares. Each share
carries the same rights and obligations stipulated by law
and / or in the company’s Articles of Association and entitles
the holder to one vote at the Annual General Meeting (AGM).
No individual shareholder or group of shareholders is en-
titled to special rights, particularly rights granting powers
of control.
The exercise of voting rights and the transfer of shares
are based upon statutory provisions and the company’s
Articles of Association, which place no restrictions on the
exercise of voting rights or transfer of shares.
Shareholdings exceeding 10 % of voting rights
KfW Bankengruppe (KfW), Frankfurt am Main, is our larg-
est shareholder, holding 20.53 % of the share capital. The
Federal Republic of Germany holds an indirect stake in
Deutsche Post AG via KfW.
Appointment and replacement of members of the
Board of Management
The members of the Board of Management are appointed
and replaced in accordance with the relevant statutory
provisions (cf. sections 84 and 85 of the Aktiengesetz
(AktG – German stock corporation act) and section 31 of
the Mitbestimmungsgesetz (MitbestG – German co-deter-
mination act)). Article 6 of the Articles of Association stipu-
lates that the Board of Management must have at least two
members. Beyond that, the number of board members is
determined by the Supervisory Board.
Amendments to the Articles of Association
In accordance with section 119 (1), number 6 and sec-
tion 179 (1), sentence 1 of the AktG, amendments to the Arti-
cles 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.
Board of Management authorisation, particularly
regarding issue and buy-back of shares
The Board of Management is authorised, subject to the con-
sent of the Supervisory Board, to issue up to 160,000,000
new, no-par value registered shares (Authorised Capital).
Details may be found in article 5 (2) of the Articles of As-
sociation. The Articles of Association may be viewed on
the company’s website,
dpdhl.com / en / investors, or in the
electronic company register. They may also be viewed in
the commercial register of the Bonn Local Court.
The Board of Management has furthermore been au-
thorised by resolution of the AGMs of 27 May 2014 (agenda
item 8), 28 April 2017 (agenda item 7) and 24 April 2018
(agenda items 6 and 7) to issue pre-emptive rights / Perfor-
mance Share Units (PSUs). The authorisation resolutions are
included in the notarised minutes of the AGM, which can be
viewed in the commercial register of the Bonn Local Court.
In order to service both current pre-emptive rights / PSUs
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FURTHER INFORMATION
and those yet to be issued, the AGM approved contingent
capital increases. Details may be found in article 5 of
the Articles of Association. As at 31 December 2019, the
pre-emptive rights / PSUs already issued conferred rights
to up to 30,633,575 Deutsche Post AG shares, assuming
the conditions are met. Under the authorisations granted,
up to 38,133,756 additional pre-emptive rights / PSUs may
be issued.
The AGM of 28 April 2017 authorised the company
to buy back shares on or before 27 April 2022 up to an
amount not to exceed 10 % of the share capital existing as
at the date of adoption of the resolution. Further details,
including the option of using the treasury shares acquired
on that basis or on the basis of a preceding authorisation,
may be found in the authorisation resolution adopted by
the AGM of 28 April 2017 (agenda item 8). In addition,
the AGM of 28 April 2017 authorised the Board of Man-
agement to buy back shares within the scope specified in
agenda item 8, including through the use of derivatives
(agenda item 9). Based upon that authorisation resolution,
the company repurchased 384,421 shares in the financial
year. As at 31 December 2019, the company held 983,694
treasury shares.
Significant agreements that are conditional upon a
change of control following a takeover bid and agree-
ments with members of the Board of Management or
employees providing for compensation in the event
of a change of control
Deutsche Post AG holds a syndicated credit facility with a
volume of €2 billion under an agreement entered into with
a consortium of banks. If a change of control within the
meaning of the agreement 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 any
outstanding loans and to request repayment. The terms
and conditions of the bonds issued under the Debt Issu-
ance Programme established in March 2012 and those of
the convertible bond issued in December 2017 also con-
tain change-of-control clauses. In the event of a change of
control within the meaning of those terms and conditions,
creditors are, under certain conditions, granted the right
to demand early redemption of the respective bonds. Fi-
nally, Deutsche Post AG has concluded a factoring agree-
ment providing for a maximum volume of €70 million in
connection with distribution partnerships. The factoring
agreement can be terminated without notice in the event
of a change of control as defined in the agreement.
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 to
the end of a given month, and to terminate their Board of
Management contract (right to early termination). If the
right to early termination is exercised or a Board of Man-
agement contract is terminated by mutual consent within
nine months of the change of control, the Board of Man-
agement member is entitled to payment to compensate
the remaining term of their Board of Management contract.
Such payment must be capped pursuant to the recommen-
dation in No. 4.2.3 of the German Corporate Governance
Code as amended on 7 February 2017, subject to the spec-
ifications outlined in the remuneration report. With regard
to the Annual Bonus Plan with Share Matching for execu-
tives, the holding period for the shares will become invalid
with immediate effect in the event of a change of control
of the company. The participating executives will receive
the total number of matching shares corresponding to their
investment in due course. In such a case, the employer will
be responsible for any tax disadvantages resulting from a
reduction of the holding period. Taxes normally incurred
after the holding period are exempt from this provision.
Research and development
As a service provider, Deutsche Post DHL Group does not
engage in research and development activities in the nar-
rower sense and therefore has no significant expenses to
report in this connection.
Remuneration Report
The remuneration report describes the principles of the re-
muneration systems for the members of the Board of Man-
agement and the Supervisory Board and provides informa-
tion about the remuneration granted to, and paid to, the
members of the Board of Management and the Supervisory
Board in financial year 2019. It has been prepared in accord-
ance with the recommendations of the German Corporate
Governance Code (the Code) and the requirements of the
Handelsgesetzbuch (HGB – German Commercial Code), the
German Accounting Standards and the International Finan-
cial Reporting Standards (IFRS s).
BOARD OF MANAGEMENT REMUNERATION
Principles of the remuneration system for
the Board of Management
The remuneration system for the Board of Management is
aligned with the company’s strategy and is geared towards
performance-based, sustainable, long-term corporate gov-
ernance. It serves as a core management tool for linking the
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FURTHER INFORMATION
interests of the Board of Management’s members with those
of the company and the shareholders, and provides import-
ant incentives for implementing the company’s strategy.
Overview of the remuneration system
The Board of Management’s remuneration primarily com-
prises the following components:
The company defines a combination of strategic tar-
gets and key operating performance indicators at company
and division level that takes into account our three bottom
lines – becoming the Employer, Provider and Investment
of Choice – as well as sustainability and corporate respon-
sibility, values we have firmly integrated into our strategy.
They are also used to calculate the variable components of
the Board of Management’s remuneration.
The Supervisory Board regularly examines the appro-
priateness of this remuneration. The criteria for this review
are the responsibilities, performance and experience of
each individual Board of Management member as well
as the company’s economic situation, performance and
future prospects, and the customary level of remuneration,
taking into consideration the peer group and the overall
remuneration structure in the company. In this process, the
Supervisory Board also considers the relation of the Board
of Management remuneration to the remuneration of the
senior management level and the workforce overall, includ-
ing its development over time. The companies included
in the DAX constitute the peer group used to determine
whether the remuneration is in line with market practice.
In evaluating the appropriateness of remuneration, the
Supervisory Board is assisted by an independent external
remuneration expert. The current remuneration system
was approved at the 2018 Annual General Meeting with
88.56 % of the votes cast.
Overview of the remuneration components
Remuneration
component
Base salary
Fringe benefits
Pension commitments
Annual bonus with
medium-term
component (deferral)
Long-term component
Summary
Fixed, contractually agreed remuneration paid monthly Attracts and retains Board of Management members
Purpose and connection to strategy
who can develop and successfully implement the
strategy based upon their experience and expertise
Secures an appropriate, non-variable income to
ensure that no undue risks are taken
Guarantees pension commitment in line with market
practice to provide protection for retirement and in
case of death and inability to work
Provides incentive for Board of Management members
to concentrate on successfully carrying out annual
business priorities
Deferred component subject to an additional
performance criterion reinforces the focus of Board
of Management remuneration upon the company’s
long-term performance and also aligns annual
business priorities with the company’s long-term
development
Provides incentive for the Board of Management
to achieve a sustained increase in enterprise value
Links the performance of Board of Management
remuneration directly to share price performance
and therefore to investor interests
Mainly the use of a company car and services of a driver,
allowances for health and long-term care insurance
Contribution-based pension commitment
Annual amount of 35 % of the base salary
Variable interest on the pension contribution account,
minimum annual rate of 2.25 %
As a rule, 75 % financial and 25 % non-financial
performance targets
Maximum amount (cap): 100 % of respective base salary
Target amount: 80 % of respective base salary
Payout:
50 % in following year (short-term component)
50 % after another two years (sustainability phase)
and only if an additional criterion is met
(medium-term component)
Granting of stock appreciation rights
Personal investment in the amount of 10 % of the base
salary required
Performance targets based upon share price:
Absolute increase in share price
Relative performance as against the
STOXX Europe 600
Maximum amount (cap): 4x grant amount (2.5x grant
amount for the chairman of the Board of Management)
Exercisability: according to achievement of performance
targets after four years
Payout: in the fifth or sixth year after granting,
depending on the respective exercise date
Maximum amount (cap)
total remuneration
Cap on remuneration granted and from 2022 cap on
Additional limit on Board of Management
remuneration paid (plus fringe benefits)
Chairman: €8 million
Regular Board of Management member: €5 million
remuneration
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Remuneration components and total target
remuneration
The remuneration of the Board of Management members
mostly comprises variable, performance-based compo-
nents whose amount is based upon the performance of
individual Board of Management members and the com-
pany’s performance. The Supervisory Board assigns targets
to all performance criteria for variable remuneration prior
to each financial year; the degree of target achievement is
then used to determine the amount actually paid out.
In determining the targets, as well as their lower and
upper thresholds, the Supervisory Board ensures that these
are appropriate and ambitious. If performance falls below
the lower thresholds, the variable remuneration is reduced
to zero. The variable remuneration is capped if the upper
thresholds are exceeded. This approach provides for a bal-
anced risk / opportunity profile in the remuneration system.
The sum of the fixed remuneration components, the
target amount for the annual bonus (including deferral)
and the SAR grant amount equals the total target remu-
neration:
Terms of variable remuneration in target remuneration
Grant year
Year 2
Year 3
Year 4
Year 5
Year 6
Annual bonus
Deferral
Long-Term Incentive Plan (LTIP)
LTIP exercise period
Total target remuneration
Base salary
Fixed monthly amount
Fringe benefits
Mainly the use of a company car, allowances
for health and long-term care insurance
Fixed
remuneration
Pension commitments
Contribution-based pension commitment:
annual amount (= 35 % of base salary)
One-year share:
50 % of target amount (= 40 % of base salary)
Annual bonus
Medium-term component (deferral)
50 % of target amount (= 40 % of base salary)
Variable target
remuneration
LTIP
Grant amount (= 100 % of base salary)
Total target
remuneration
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Structure of the total target remuneration
In accordance with the Code’s recommendation, the Su-
pervisory Board takes care to set up a multi-year structure
when determining variable remuneration, i.e., one where
the medium and long-term variable remuneration compo-
nents exceed the short-term components. This supports
the long-term development of the company. At the same
time, the short-term variable remuneration ensures a
sufficient focus upon the annual operating targets whose
achievement lays the foundation for future performance.
The following is an example of the structure of the total
target remuneration of Board of Management members,
assuming a base salary of €930,000:
Maximum total remuneration
In addition to the maximum amounts for individual remu-
neration components, the total payout amount is limited
by an overall cap. Firstly, the cap limits the payout amount
from remuneration granted in one year (cap on remunera-
tion granted). Secondly, from financial year 2022 onwards,
the cap will also apply to the remuneration paid in one year
(cap on remuneration paid). These caps amount to €5 mil-
lion for each regular member of the Board of Management
and €8 million for the Board of Management chairman (ex-
cluding fringe benefits in each case).
Example illustration of the included remuneration
components
Total target remuneration structure (example)
€2,982,000
Overall cap on remuneration
granted: Example 2019
Overall cap on remuneration
paid: Example 2022
Long-Term Incentive Plan
31 %
€930,000
Medium-term component (deferral)
12.5 %
€372,000
Annual bonus
12.5 %
€372,000
Fixed remuneration1
44 %
€1,308,000
1 The fixed remuneration consists of a base salary, pension contribution and
fringe benefits; fringe benefits are calculated based upon the average
amount in 2019.
Remuneration components
included
Long-Term Incentive Plan
2019 tranche
Deferral from 2019 annual
bonus
Proportion of 2019 annual
bonus for immediate payout
2019 base salary
2019 pension expense
(service cost)
Remuneration components
included
Long-Term Incentive Plan
2016 / 2017 / 2018 tranches 1
Deferral from 2020 annual
bonus
Proportion of 2022 annual
bonus for immediate payout
2022 base salary
2022 pension expense
(service cost)
Total remuneration range for a regular
Board of Management member
Maximum
total remuneration
ase salary
0 % of b
0 % – 4
0
0 %
o f b a s e s ala r y
0 % – 1 0
Maximum
amount
LTIP
Maximum
amount
Annual bonus
(including medium-
term component)
Base salary
Base salary
1 The time the tranches are paid depends on when they are exercised within
the two-year exercise period.
Pension expenses
and fringe benefits
Pension expenses
and fringe benefits
Minimum
Maximum
In the case of a 100 % SAR allocation. For the Chairman of the Board of
Management, the maximum amount from the LTIP is 250 % of base salary.
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FURTHER INFORMATION
DETAILED INFORMATION ON
REMUNERATION COMPONENTS
1. Fixed remuneration components
BASE SALARY
The base salary is paid in equal monthly instalments. Its pur-
pose is to ensure an adequate, non-variable income and to pre-
vent Board of Management members from taking undue risks.
FRINGE BENEFITS
The company grants Board of Management members
fringe benefits that are duly taxed as non-cash benefits.
They comprise mainly the use of a company car, subsidies
for health and long-term care insurance in accordance with
social security provisions, and benefits for assignments
outside the members’ home country.
PENSION COMMITMENTS
The members of the Board of Management have been
granted contribution-based pension commitments. There
is still a legacy final-salary-based direct pension commit-
ment for the chairman of the Board of Management.
Under the contribution-based pension plan, the com-
pany credits an annual amount of 35 % of the base salary to
a virtual pension account for each Board of Management
member. 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 bene-
fits are paid out in a lump sum in the amount of the value
accumulated in the pension account. The benefits fall due
no earlier than when the Board of Management member
reaches the age of 62 or in the case of invalidity whilst in
office or death. In the event of benefits falling due, the pen-
sion beneficiary may opt to receive an annuity payment in
lieu of a lump-sum payment.
When he was first appointed, the chairman of the
Board of Management was granted a final-salary-based
direct pension commitment then customary in the com-
pany, which provides for benefits in the case of permanent
invalidity, death or retirement. His pension commitment
provides for retirement benefits to be granted at the ear-
liest from the age of 55. He has not availed himself of this
provision. His pension is geared towards annuity payments.
He also has the option of choosing a lump sum instead. The
benefit amount depends on the pensionable income and
the pension level derived from the years of service. Pen-
sionable income consists of the base salary computed on
the basis of the average salary over the last twelve calen-
dar months of employment. The chairman of the Board of
Management attained the maximum pension level (50 %
of his final salary) after ten years of service. Subsequent
retirement benefits increase or decrease to reflect changes
in the consumer price index in Germany.
2. Variable remuneration components
By applying selected strategic performance criteria and
ambitious operating targets, the variable remuneration of
Board of Management members provides suitable incen-
tives for managing the company in line with the corporate
strategy and in the interests of the shareholders and other
stakeholders. The annual bonus focuses upon the compa-
ny’s operating targets, thereby laying the foundation for
future performance. Whilst the medium-term component
ensures stabilisation of the operating targets, the LTIP aims
to achieve a sustained increase in enterprise value and
therefore to link the interests of the Board of Management
and of shareholders.
ANNUAL BONUS INCLUDING MEDIUM-TERM COMPONENT
(DEFERRAL)
The performance criteria used to measure the performance
of Board of Management members for the annual bonus
usually comprise 75 % financial and 25 % non-financial
targets. Individual targets are also defined to reflect the
performance of individual Board of Management mem-
bers in their remuneration in addition to the collective per-
formance of the Board of Management as a whole. Each
performance criterion is geared towards ensuring that the
business targets of the Group and its divisions are met and
align with the strategic bottom lines. Details on the meas-
urement criteria applied and their weighting are provided
in “Performance criteria” table on
page 24.
The actual annual bonus amount may not exceed 100 %
of the base salary. The target amount has been set at 80 %
of the base salary. 50 % of the variable remuneration deter-
mined on the basis of target achievement is paid out follow-
ing the end of the financial year (short-term component).
The remaining 50 % is transferred to the medium-term
component (deferral). The medium-term component is not
paid out until expiration of a two-year sustainability phase
and is subject to the additional condition that EBIT after as-
set charge (EAC) – an indicator of sustainability – is reached
during this period. Exceeding this sustainability criterion
does not increase the deferred amount. If the criterion is
not met, the deferred amount is not paid out and simply
expires without replacement.
LONG-TERM COMPONENT (LONG-TERM INCENTIVE PLAN, LTIP)
Since financial year 2006, the company has granted
members of the Board of Management a long-term cash
remuneration component linked to the company’s share
price performance through the issue of stock appreciation
rights (SAR s). With a term of six years, the LTIP provides
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FURTHER INFORMATION
an incentive for focussing upon the company’s long-term
performance. Participation in the LTIP requires Board of
Management members to make a personal investment of
10 % of their annual base salary by the grant date of each
tranche, primarily in shares of the company.
A certain number of SAR s with a four-year lock-up
period are granted at the start of the term. Starting with
the 2020 tranche, their value is 100 % of the base salary.
The Board of Management members receive remuneration
from the granted SAR s no earlier than upon expiry of this
lock-up period. First, a determination is made as to whether
the pre-defined performance targets were met. The perfor-
mance targets are based upon the share price performance
in accordance with our strategic bottom line of being the
Investment of Choice.
Four sixths of the granted SAR s are earned if the fi-
nal closing price of Deutsche Post shares at the end of the
lock-up period exceeds the issue price by at least 10 %, 15 %,
20 % or 25 % (absolute share price targets). This approach
emphasises the importance of the company’s long-term
development and value growth, and gears the Board of
Management’s remuneration firmly towards the interests
of shareholders.
A further two sixths of the SAR s granted are linked to
the performance of Deutsche Post shares in relation to the
performance of the STOXX Europe 600 Index. They are
earned if the share price equals the index performance or
if it outperforms the index by more than 10 % (relative share
price targets). This highlights the performance of the com-
pany compared to that of the market.
SAR s can be exercised once or several times within an
exercise period of two years after expiration of the lock-up
period in compliance with insider trading regulations; SAR s
not exercised during this period expire.
Mechanism of stock appreciation rights
SAR performance
targets
Thresholds
Number of
exercisable SAR s
Performance
versus STOXX
Europe 600
Absolute
increase
in share price
+ 10 %
+ 0 %
+ 25 %
+ 20 %
+ 15 %
+ 10 %
1 /6
1 /6
1 /6
1 /6
1 /6
1 /6
Each SAR entitles the Board of Management member to
receive a cash settlement during the two-year exercise
period equal to the difference between the average clos-
ing price of Deutsche Post shares for the five trading days
preceding the exercise date and the issue price at the start
of the four-year lock-up period. The Board of Management
member therefore only receives payment if the share
price exceeds the issue price of the SAR s. In this way, the
LTIP creates an incentive for a period of up to six years to
boost the price of Deutsche Post shares. The payout from
the SAR s is limited to a maximum of four times the grant
amount (two-and-a-half times for the Board of Manage-
ment chairman). Moreover, the Supervisory Board can limit
the remuneration from the LTIP in the event of extraordi-
nary circumstances.
Non-exercisable SAR s expire without replacement.
However, SAR s already earned can be exercised up to the
end of the respective exercise period if a Board of Manage-
ment member steps down at the instigation of the company
prior to expiration of the agreed service period, or if the em-
ployment relationship ends after expiration of the agreed
service period without the company offering to renew the
member’s contract. The same applies in case of retirement
or early retirement.
3. Other contractual provisions
CONTRACT TERM
The contract term for Board of Management members gen-
erally runs for three years for initial appointments and five
years for re-appointments.
EARLY CONTRACT TERMINATION AND CHANGE OF CONTROL
In accordance with the recommendation of the Code as
amended 7 February 2017, Board of Management contracts
contain a provision stipulating that, in the event of early
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 sev-
erance payment cap is calculated exclusive of the value of
any rights allocated, or exercised, from LTIPs.
In the event of a change of control, any member of the
Board of Management is entitled to resign from office for
good cause within a period of six months following the
change in control, after giving three months’ notice to the
end of a given month, and to terminate their Board of Man-
agement contract (right to early termination).
The contractual provisions stipulate that a change in
control exists if a shareholder has acquired control within
the meaning of section 29 (2) of the Wertpapiererwerbs- und
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Deutsche Post DHL Group – 2019 Annual Report
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FURTHER INFORMATION
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 company
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 ex-
ercised or a Board of Management contract is terminated
by mutual consent within nine months of the change in
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 (see above for the calcula-
tion). 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 ap-
plies 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.
If the right to early termination is exercised to ter-
minate a Board of Management contract, the Board of
Management member can exercise the SAR s already
granted after expiration of the four-year lock-up period
and until the end of the respective exercise period, pro-
vided the exercise conditions set out in the applicable plan
terms have been met. After termination of the Board of
Management contract, the member is no longer entitled
to claim granting of any additional SAR s. In the event that
the company is delisted after a takeover, the company will
reach a suitable agreement with the Board of Management
members.
NON-COMPETE CLAUSE
Board of Management members are also subject to a
non-compete clause. During the one-year non-compete
period, former Board of Management members receive
100 % of their last contractually stipulated 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 is deducted from any pension
payments. If a Board of Management member receives a
severance payment for remuneration claims, no additional
compensation payment for the non-compete clause is paid
for this period. Prior to, or concurrent with, cessation of the
Board of Management 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.
CONTINUED PAYMENT OF REMUNERATION
If a Board of Management member is temporarily unable
to work due to illness, accident or another reason for which
the member is not responsible, remuneration will continue
to be paid for a period of twelve months, but no longer than
the end of the Board of Management contract. In the case
of permanent disability of a Board of Management member
during the term of the Board of Management contract, the
contract will expire at the end of the quarter in which the
permanent disability was determined.
If the Board of Management contract ends on account
of death or permanent disability, the base salary and max-
imum annual bonus, prorated in each case, will continue
to be paid for a period of six months following the end of
the month in which the Board of Management contract
ends, but no longer than the scheduled expiration date of
the contract. If the contract ends due to the death of the
Board of Management member, the payment is made to
the deceased’s beneficiaries as joint and several creditors.
CLAWBACK
According to the new Code recommendation G.11, variable
remuneration can be withheld or reclaimed (clawback) in
justified cases. The company complies with the recommen-
dation because the medium and long-term components of
variable remuneration can both be withheld.
50 % of the annual bonus resulting from target achieve-
ment is transferred into the medium-term component and
is subject to a two-year sustainability phase (deferral). This
medium-term component, even if earned, is clawed back
and expires without replacement if EAC, the sustainability
criterion, is not met during the sustainability phase.
The SAR s granted are clawed back and expire without
replacement, if and to the extent that, the absolute or rela-
tive performance targets are not met during the four-year
lock-up period. Moreover, SAR s are granted on the con-
dition that the Supervisory Board may limit the payment
amount in the event of extraordinary developments.
The statutory clawback rules are applied additionally
within the statutory limitation periods.
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FURTHER INFORMATION
SHARE OWNERSHIP
The targets for the LTIP are share-based, which ensures that
the remuneration of the Board of Management is strongly
and directly linked to, and aligned with, the interests of our
shareholders. Per SAR tranche, a Board of Management
member can receive at most two-and-a-half times (chair-
man of the Board of Management) or four times (regular
Board of Management member) the allocated amount from
each individual tranche, provided the overall cap is not met
first. Even considering a one-year horizon, this provides an
incentive for focussing upon share price that far exceeds
one annual base salary. This effect is multiplied over sev-
eral years. Moreover, participation in the LTIP requires Board
of Management members to make a personal investment
of 10 % of their annual base salary per tranche, primarily
in shares of the company. Agreeing more extensive share
ownership guidelines therefore does not appear necessary.
OTHER
Members of the Board of Management do not receive any
loans from the company.
Remuneration of the Group Board of Management
in financial year 2019
1. Base salary
The base salary of regular Board of Management members
generally amounts to €715,000 in the first contract year,
€860,000 from the third contract year and €930,000 from
the fourth contract year. After that, it is reviewed after an-
other three years have passed or when the contract is re-
newed. The “Remuneration granted in accordance with the
German Corporate Governance Code” table on
page 27 ff.
contains a breakdown of the individual Board of Manage-
ment members’ base salaries.
2. Target achievement for the annual bonus,
including deferral
The performance criteria used to calculate the amount of
the annual bonus and their weighting were the same as in
the previous year. The performance criteria outlined below
were used:
Performance criteria
Performance criterion
Weighting
Incentive effect / Strategy connection
Group EAC 1
55 % / 65 %
Key performance indicator for the company
Adds a cost of capital component to the calculation of EBIT to encourage
the efficient use of resources and ensures that the operating business is
geared towards increasing value sustainably whilst generating increasing
cash flow
Divisional EAC 1
0 % / 10 %
Measurement of individual performance in the respective Board department
Incentive for market-leading performance in every division
Free cash flow
10 %
Employee engagement
12.5 %
Individual targets, based upon
the Group’s strategy 2
12.5 %
Key performance indicator for the company
Measure of how much cash the company generates, taking into account
payment commitments arising from the Group’s operations as well as capital
expenditure and lease and interest payments
Indicator of how much cash is available to the company for paying dividends,
for repaying debt or for other purposes (e.g., funding pension obligations)
Becoming employer of choice
Quantifies the identification of employees with the company and their
motivation to contribute to the company’s success
Compared with external benchmarks, identifies strengths and indicates
action areas
Opportunity to determine annual focus areas in operations depending upon
current priorities and the degree of implementation of our strategy
E.g., implementation of the digital transformation initiatives necessary for
sustained business success, implementation of measures for increasing
customer satisfaction
1 EBIT after asset charge (EAC) including asset charge on goodwill and before goodwill impairment. 2 Since Ken Allen assumed responsibility for a new division
in 2019, no individual target was agreed. His divisional EAC target was increased accordingly on a percentage basis.
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FURTHER INFORMATION
The formula used to calculate the amount of the annual bonus was as follows:
Annual bonus calculation
Target achievement
each 0 % – 125 %
Weighting 2
Group EAC 1
55 % – 65 %
Divisional EAC 1
0 % – 10 %
Overall target achievement
0 % – 125 % respectively
Free cash flow
10 %
Employee engagement
12.5 %
Individual targets
12.5 %
Target amount
80 % of base salary
Payout
One-year share
Annual Bonus
50 %
50 %
Medium-term component
Deferral
1 Including asset charge on goodwill and before goodwill impairment. 2 Ken Allen: weighting of divisional EAC at 22.5%, individual targets at 0%.
Target achievement, annual bonus achievement, 2019
Performance criterion
Target
in € million
Actual
in € million
Group EAC 1
Divisional EAC 1
Post & Parcel Germany
Global Forwarding, Freight
Express
Supply Chain
eCommerce Solutions
Free cash flow
1,762
723
17
1,103
419
–171
733
1 Including asset charge on goodwill and before goodwill impairment.
Degree of target
achievement
in %
Degree of target
achievement
in % of maximum
amount
1,513
684
–3
1,038
451
–146
867
82.35
91.59
91.48
85.99
125.00
125.00
125.00
65.88
73.28
73.18
68.79
100.00
100.00
100.00
In measuring the degree of target achievement, three
thresholds were agreed upon with each Board of Manage-
ment member to calculate the amount of their individual
annual bonus: there is no payout until the lowest thresh-
old is reached; when this happens, 50 % of the maximum
amount for this target is paid. When the performance tar-
get is achieved, 80 % is paid, and when the upper thresh-
old is reached, 100 % of the maximum amount is paid. For
each target, the maximum amount possible is equal to the
weighting applied to one base salary (for example, for the
free cash flow performance criterion, the maximum payout
is 10 % of one base salary).
The performance targets for the Group EAC and Group
free cash flow correspond to the budgeted figures for the
financial year. The degree of individual target achievement
was between 62.5 % and 125 %. 112.50 % of the employee
target was achieved. Based upon these target achievement
percentages, the average annual bonus (including deferral)
was 75.71 % of one base salary. The annual bonus amount
paid out to each individual Board of Management member
is shown in the “Remuneration paid in accordance with the
German Corporate Governance Code” table.
The condition for payout of the share of the annual
bonus deferred in 2017 was that the EAC at the end of the
sustainability phase exceeds the EAC in the base year, or
that the EAC was positive overall during the sustainability
phase, i. e., that at least the asset charge (including asset
charge on goodwill) was earned. The latter was the case
during the sustainability phase. The individual payouts are
outlined in the “Remuneration paid in accordance with the
German Corporate Governance Code” table.
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FURTHER INFORMATION
3. SAR target achievement
The waiting period for the 2015 SAR tranche granted four
years previously ended on 31 August 2019. The absolute
performance of Deutsche Post shares was 11.70 %, which
represented achievement of one of four absolute share
price targets. The share’s performance relative to the STOXX
Europe 600 was 11.07 %. Both relative share price targets
were therefore met. In total, three of six share price targets
were met, making half of the SAR s granted in financial year
2015 exercisable. The Board of Management members can
exercise these SAR s until 31 August 2021.
On 1 September 2019, the members of the Board of
Management were again granted SAR s as the 2019 tranche.
The Supervisory Board agreed upon strategic targets with
the members of the Board of Management for a period
of twelve months prior to the grant date to determine
the grant value. The relevant target categories were the
performance of the share price compared with that of the
company’s competitors, strategic individual targets and a
digital transformation target for each member. The target
categories each carry a weighting of a third. For the share
price performance compared with the company’s compet-
itors, peer groups of two to three companies are selected
for the operating divisions of the Group. Additional imple-
mentation steps for the divisional strategy were agreed as
part of the digital transformation. The focus of the other
individual targets was upon customers and employees, in
particular.
The Board of Management members were granted
SAR s in the 2019 tranche that, on average, amounted
to 139 % of their base salary on the grant date. From the
2020 tranche onwards, SAR s will be uniformly granted to
all Board of Management members only in the amount of
100 % of each individual base salary on the grant date.
Target achievement for the targets applicable for
Long-Term Incentive Plan: number of SAR s granted
granting SAR s in 2019 was as follows:
Quantity
SAR target achievement
Share price performance
compared with the
company’s competitors
Strategic individual targets
Digital transformation
targets
Target
achieve-
ment
%
SAR
allocation
2019
tranche
Weighting
1 / 3
1 / 3
127
711,294
120 – 150
818,601
Frank Appel, Chairman
Ken Allen
SAR s
2018
tranche
SAR s
2019
tranche
329,538
656,568
196,596
336,210
Oscar de Bok (since 1 October 2019)
–
John Gilbert (until 30 September 2019)
216,384 1
–
–
Melanie Kreis
185,070
310,878
Tobias Meyer (since 1 April 2019)
–
239,010
Thomas Ogilvie
127,044
253,824
John Pearson (since 1 January 2019)
–
239,010
1 / 3
130 – 150
793,083
Tim Scharwath
137,208
287,478
2,322,978
1 Forfeited on departure.
The index started out at 371.81 points. The issue price was
€28.88. Payments from the 2019 tranche will be made no
earlier than 1 September 2023, assuming that the share
price targets are met at least in part. If no target is met, the
SAR s expire without replacement, which means that they
will never give rise to any payments. The value of the SAR s
granted to each Board of Management member in finan-
cial year 2019 is presented in the “Remuneration granted in
accordance with the German Corporate Governance Code“
table on
page 27 ff. See the “Long-Term Incentive Plan:
number of SAR s granted” table for the number of SAR s
granted.
4. Remuneration amount
Based upon the aforementioned determinations by the
Supervisory Board, the remuneration paid to members
of the Board of Management in financial year 2019 in ac-
cordance with the applicable accounting standards totalled
€13.62 million (previous year: €11.37 million). That amount
comprised €8.15 million in non-performance-related com-
ponents (previous year: €8.12 million) and €5.47 million
in paid-out annual bonuses (including the deferral from
2017) as performance-related components (previous year:
€3.25 million). An additional €2.88 million (previous year:
€0.58 million) of the annual bonus was transferred to the
medium-term component (deferral) and will be paid out
in 2022 subject to the condition that the required EAC, an
indicator of sustainability, is reached.
In financial year 2019, the Board of Management
members were granted a total of 2,322,978 SAR s, which
at the issue date were valued at €9.90 million (previous
year: €5.43 million).
The total remuneration paid to Board of Management
members is presented in the tables below. In addition to
the applicable accounting principles, the Code recommen-
dations were also taken into account.
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FURTHER INFORMATION
Remuneration granted in accordance with the German Corporate Governance Code
€
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
LTIP with four-year waiting period
Annual bonus: deferral with three-year waiting period
Total
Pension expense (service cost)
Total remuneration
Cap on the maximum payment amount
(excluding fringe benefits) from remuneration granted in 2019
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
LTIP with four-year waiting period
Annual bonus: deferral with three-year waiting period
Total
Pension expense (service cost)
Total remuneration
Cap on the maximum payment amount
(excluding fringe benefits) from remuneration granted in 2019
1 Forfeited on departure.
Frank Appel
Chairman
2018
2019
2,060,684
2,060,684
52,889
2,113,573
824,274
2,369,807
1,545,533
824,274
5,307,654
1,121,934
6,429,588
50,933
2,111,617
824,274
3,621,254
2,796,980
824,274
6,557,145
1,093,499
7,650,644
Min. 2019
2,060,684
50,933
2,111,617
0
0
0
0
Max. 2019
2,060,684
50,933
2,111,617
1,030,342
8,022,759
6,992,417
1,030,342
2,111,617
1,093,499
11,164,718
1,093,499
3,205,116
12,258,217
8,000,000
2018
1,005,795
102,716
1,108,511
402,318
1,324,353
922,035
402,318
2,835,182
345,640
3,180,822
Ken Allen
eCommerce Solutions
2019
1,005,795
100,672
1,106,467
402,318
1,834,573
1,432,255
402,318
3,343,358
348,733
3,692,091
Min. 2019
1,005,795
100,672
1,106,467
0
0
0
0
1,106,467
348,733
1,455,200
Max. 2019
1,005,795
100,672
1,106,467
502,898
6,231,906
5,729,008
502,898
7,841,271
348,733
8,190,004
5,000,000
Oscar de Bok
Supply Chain (since 1 October 2019)
John Gilbert
Supply Chain (until 30 September 2019)
2018
2019
Min. 2019
Max. 2019
–
–
–
–
–
–
–
–
–
–
178,750
13,499
192,249
71,500
71,500
–
71,500
335,249
–
335,249
178,750
13,499
192,249
0
0
–
0
192,249
–
192,249
178,750
13,499
192,249
89,375
89,375
–
89,375
370,999
–
370,999
n. a.
2018
930,000
264,539
1,194,539
372,000
1,224,553
852,553 1
372,000
2,791,092
310,989
3,102,081
2019
Min. 2019
Max. 2019
697,500
116,000
813,500
279,000
279,000
–
279,000
1,371,500
290,027
1,661,527
697,500
116,000
813,500
0
0
–
0
813,500
290,027
1,103,527
697,500
116,000
813,500
348,750
348,750
–
348,750
1,511,000
290,027
1,801,027
n. a.
27
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
LTIP with four-year waiting period
Annual bonus: deferral with three-year waiting period
Total
Pension expense (service cost)
Total remuneration
Cap on the maximum payment amount
(excluding fringe benefits) from remuneration granted in 2019
2018
930,000
17,003
947,003
372,000
1,239,978
867,978
372,000
2,558,981
317,375
2,876,356
Melanie Kreis
Finance
Tobias Meyer
Post & Parcel Germany (since 1 April 2019)
2019
Min. 2019
Max. 2019
2018
2019
Min. 2019
Max. 2019
930,000
20,674
950,674
372,000
1,696,340
1,324,340
372,000
3,019,014
309,440
3,328,454
930,000
20,674
950,674
0
0
0
0
950,674
309,440
1,260,114
930,000
20,674
950,674
465,000
5,762,280
5,297,280
465,000
7,177,954
309,440
7,487,394
5,000,000
–
–
–
–
–
–
–
–
–
–
536,250
20,045
556,295
214,500
1,232,683
1,018,183
214,500
2,003,478
–
2,003,478
536,250
20,045
556,295
0
0
0
0
556,295
–
556,295
536,250
20,045
556,295
268,125
4,340,765
4,072,640
268,125
5,165,185
–
5,165,185
5,000,000
Thomas Ogilvie
Human Resources and Corporate Incubations
John Pearson
Express (since 1 January 2019)
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
LTIP with four-year waiting period
Annual bonus: deferral with three-year waiting period
Total
Pension expense (service cost)
Total remuneration
Cap on the maximum payment amount
(excluding fringe benefits) from remuneration granted in 2019
2018
715,000
14,896
729,896
286,000
881,836
595,836
286,000
1,897,732
247,753
2,145,485
2019
Min. 2019
Max. 2019
2018
2019
Min. 2019
Max. 2019
763,333
14,079
777,412
305,333
1,386,623
1,081,290
305,333
2,469,368
242,938
2,712,306
763,333
14,079
777,412
0
0
0
0
777,412
242,938
1,020,350
763,333
14,079
777,412
381,667
4,706,779
4,325,112
381,667
5,865,858
242,938
6,108,796
5,000,000
–
–
–
–
–
–
–
–
–
–
715,000
86,469
801,469
286,000
1,304,183
1,018,183
286,000
2,391,652
246,341
2,637,993
715,000
86,469
801,469
0
0
0
0
801,469
246,341
1,047,810
715,000
86,469
801,469
357,500
4,430,140
4,072,640
357,500
5,589,109
246,341
5,835,450
5,000,000
28
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
LTIP with four-year waiting period
Annual bonus: deferral with three-year waiting period
Total
Pension expense (service cost)
Total remuneration
Cap on the maximum payment amount
(excluding fringe benefits) from remuneration granted in 2019
2018
715,000
53,390
768,390
286,000
929,506
643,506
286,000
1,983,896
247,556
2,231,452
Tim Scharwath
Global Forwarding, Freight
2019
799,583
40,620
840,203
319,833
1,544,489
1,224,656
319,833
2,704,525
244,868
2,949,393
Min. 2019
799,583
40,620
840,203
0
0
0
0
840,203
244,868
1,085,071
Max. 2019
799,583
40,620
840,203
399,792
5,298,352
4,898,560
399,792
6,538,347
244,868
6,783,215
5,000,000
Remuneration paid in accordance with the German Corporate Governance Code
€
Frank Appel
Chairman
Ken Allen
eCommerce Solutions
Oscar de Bok
Supply Chain (since 1 October 2019)
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2012 LTIP tranche
2013 LTIP tranche
Other
Total
Pension expense (service cost)
Total
2018
2,060,684
52,889
2,113,573
0 1
4,958,262
950,662
–
4,007,600
–
–
7,071,835
1,121,934
8,193,769
2019
2,060,684
50,933
2,111,617
754,520
5,768,086
–
952,351
–
4,815,735
–
8,634,223
1,093,499
9,727,722
2018
1,005,795
102,716
1,108,511
195,124
482,147
482,147
–
–
–
–
1,785,782
345,640
2,131,422
2019
1,005,795
100,672
1,106,467
402,217
1,361,956
–
487,945
–
874,011
–
2,870,640
348,733
3,219,373
2018
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
178,750
13,499
192,249
71,482
–
–
–
–
–
–
263,731
–
263,731
29
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2012 LTIP tranche
2013 LTIP tranche
Other
Total
Pension expense (service cost)
Total
Base salary
Fringe benefits
Total
Annual bonus: one-year share
Multi-year variable remuneration
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2012 LTIP tranche
2013 LTIP tranche
Other
Total
Pension expense (service cost)
Total
1 Waiver of annual bonus (including deferral) 2018. 2 Plus a compensation payment of €783,460 in 2018.
John Gilbert
Supply Chain (until 30 September 2019)
Melanie Kreis
Finance
Tobias Meyer
Post & Parcel Germany (since 1 April 2019)
2018
930,000
264,539
1,194,539
122,295
389,263
389,263
–
–
–
–
1,706,097
310,989
2,017,086
2019
697,500
116,000
813,500
278,930
434,806
–
434,806
–
–
–
1,527,236
290,027
1,817,263
2018
930,000
17,003
947,003
0 1
364,964
364,964
–
–
–
–
1,311,967
317,375
1,629,342
2019
930,000
20,674
950,674
335,963
405,892
–
405,892
–
–
–
1,692,529
309,440
2,001,969
2018
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
536,250
20,045
556,295
205,947
–
–
–
–
–
–
762,242
–
762,242
Thomas Ogilvie
Human Resources and Corporate Incubations
John Pearson
Express (since 1 January 2019)
Tim Scharwath
Global Forwarding, Freight
2018
715,000
14,896
729,896
96,275
–
–
–
–
–
–
826,171
247,753
1,073,924
2019
763,333
14,079
777,412
268,388
116,188
–
116,188
–
–
–
1,161,988
242,938
1,404,926
2018
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
715,000
86,469
801,469
262,977
–
–
–
–
–
–
2018
715,000
53,390 2
768,390
129,773
–
–
–
–
–
–
1,064,446
246,341
1,310,787
898,163
247,556
1,145,719
2019
799,583
40,620
840,203
301,043
196,780
–
196,780
–
–
–
1,338,026
244,868
1,582,894
30
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Remuneration in accordance with the HGB (DRS 17)
€
Base salary
Fringe benefits
Annual bonus: one-year share
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2018 LTIP tranche
2019 LTIP tranche
Total
Base salary
Fringe benefits
Annual bonus: one-year share
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2018 LTIP tranche
2019 LTIP tranche
Total
Base salary
Fringe benefits
Annual bonus: one-year share
Annual bonus: deferral from 2016
Annual bonus: deferral from 2017
2018 LTIP tranche
2019 LTIP tranche
Total
Frank Appel
Chairman
Ken Allen
eCommerce Solutions
Oscar de Bok
Supply Chain (since 1 October 2019)
2018
2,060,684
52,889
0 1
950,662
–
1,545,533
–
4,609,768
2019
2,060,684
50,933
754,520
–
952,351
–
2,796,980
6,615,468
2018
1,005,795
102,716
195,124
482,147
–
922,035
–
2,707,817
2019
1,005,795
100,672
402,217
–
487,945
–
1,432,255
3,428,884
2018
–
–
–
–
–
–
–
–
2019
178,750
13,499
71,482
–
–
–
–
263,731
John Gilbert
Supply Chain (until 30 September 2019)
Melanie Kreis
Finance
Tobias Meyer
Post & Parcel Germany (since 1 April 2019)
2018
930,000
264,539
122,295
389,263
–
852,553 2
–
2019
697,500
116,000
278,930
–
434,806
–
–
2018
930,000
17,003
0 1
364,964
–
867,978
–
2,558,650
1,527,236
2,179,945
2019
930,000
20,674
335,963
–
405,892
–
1,324,340
3,016,869
2018
–
–
–
–
–
–
–
–
2019
536,250
20,045
205,947
–
–
–
1,018,183
1,780,425
Thomas Ogilvie
Human Resources and Corporate Incubations
John Pearson
Express (since 1 January 2019)
Tim Scharwath
Global Forwarding, Freight
2018
715,000
14,896
96,275
–
–
595,836
–
1,422,007
2019
763,333
14,079
268,388
–
116,188
–
1,081,290
2,243,278
2018
–
–
–
–
–
–
–
–
2019
715,000
86,469
262,977
–
–
–
1,018,183
2,082,629
2018
715,000
53,390
129,773
–
–
643,506
–
2,325,129 3
2019
799,583
40,620
301,043
–
196,780
–
1,224,656
2,562,682
31
1 Waiver of annual bonus (including deferral) 2018. 2 Forfeited on departure. 3 Including a compensation payment of €783,460 in 2018.
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Contribution-based pension commitments: individual breakdown
€
Ken Allen
Oscar de Bok (since 1 October 2019)
John Gilbert (until 30 September 2019)
Melanie Kreis
Tobias Meyer (since 1 April 2019)
Thomas Ogilvie
John Pearson (since 1 January 2019)
Tim Scharwath
Total
Total contribution
for 2018
Total contribution
for 2019
Present value (DBO)
as at 31 Dec. 2018
Present value (DBO)
as at 31 Dec. 2019
352,028
–
325,500
325,500
–
250,250
–
250,250
1,503,528
352,028
62,563
244,125
325,500
187,688
250,250
250,250
250,250
1,922,654
3,364,734
–
1,330,176
1,719,088
–
392,850
–
404,952
7,211,800
3,888,461
517,661
1,854,189
2,294,996
745,611
758,257
267,327
711,698
11,038,200
Final-salary-based legacy pension commitments: individual breakdown
Frank Appel, Chairman
Total
Pension level
on 31 Dec. 2018
%
50
Pension level
on 31 Dec. 2019
%
50
Pension commitments
Maximum pension level
%
50
Present value (DBO)
as at 31 Dec. 2018
€
21,563,074
21,563,074
Present value (DBO)
as at 31 Dec. 2019
€
26,570,684
26,570,684
Benefits for former Board of Management members
Benefits paid to former members of the Board of Manage-
ment or their surviving dependants amounted to €6.3 mil-
lion in financial year 2019 (previous year: €9.6 million).
The defined benefit obligation (DBO) for current pensions
calculated under IFRS s was €100 million (previous year:
€94 million).
32
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
GENERAL INFORMATION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
REMUNERATION OF THE SUPERVISORY BOARD
tions 289b ff. and 315b f. of the HGB can be found in the
Remuneration for the members of the Supervisory Board
is governed by article 17 of the Articles of Association of
Deutsche Post AG, according to which they receive only
fixed annual remuneration in the amount of €70,000 (as
in the previous year).
The Supervisory Board chairman and the Supervisory
Board committee chairs receive an additional 100 % of the
remuneration, and the Supervisory Board deputy chair
and committee members receive an additional 50 %. This
does not apply to the Mediation or Nomination Commit-
tees. Those who only serve on the Supervisory Board or its
committees, or act as chair or deputy chair, for part of the
financial year are remunerated on a pro-rata basis.
As in the previous year, Supervisory Board members
receive an attendance allowance 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 2019 totalled €2.6 million (pre-
vious year: €2.7 million). The following table shows both
totals, broken down as the remuneration paid to each
Supervisory Board member.
Annual Corporate Governance
Statement and non-financial report
dpdhl.com / en / investors and on
The Annual Corporate Governance Statement can be found
at
page 82 ff. The summa-
rised, separate non-financial report for Deutsche Post AG
and the Group with the disclosures in accordance with sec-
Sustainability Report, dpdhl.com/2019sustainabilityreport.
Remuneration paid to Supervisory Board members
€
Board members
Dr Nikolaus von Bomhard (Chair, since 24 April 2018)
Andrea Kocsis (Deputy Chair)
Rolf Bauermeister
Dr Günther Bräunig (since 17 March 2018)
Dr Mario Daberkow (since 24 April 2018)
Ingrid Deltenre
Jörg von Dosky
Werner Gatzer
Gabriele Gülzau (since 24 April 2018)
Thomas Held (since 24 April 2018)
Dr Heinrich Hiesinger (since 15 May 2019)
Mario Jacubasch (since 24 April 2018)
Prof. Dr Henning Kagermann (until 15 May 2019)
Thomas Koczelnik
Anke Kufalt (until 24 April 2018)
Ulrike Lennartz-Pipenbacher
Simone Menne
Roland Oetker
Andreas Schädler (until 24 April 2018)
Sabine Schielmann (until 24 April 2018)
Prof. Dr Wulf von Schimmelmann (Chair) (until 24 April 2018)
Dr Ulrich Schröder (until 6 February 2018)
Dr Stefan Schulte
Stephan Teuscher 1
Stefanie Weckesser
Prof. Dr-Ing. Katja Windt
2018
2019
Fixed
component
Attendance
allowance
253,750
245,000
140,000
55,417
49,583
94,792
70,000
140,000
49,583
74,375
–
49,583
105,000
175,000
20,417
70,000
105,000
140,000
20,417
20,417
91,875
8,750
140,000
105,000
115,208
70,000
26,000
26,000
22,000
5,000
7,000
15,000
10,000
19,000
8,000
12,000
–
8,000
15,000
27,000
2,000
10,000
17,000
19,000
1,000
2,000
7,000
0
18,000
18,000
20,000
10,000
Fixed
component
Attendance
allowance
Total
279,750
271,000
162,000
60,417
56,583
315,000
245,000
140,000
91,875
70,000
109,792
105,000
80,000
70,000
17,000
16,000
12,000
6,000
4,000
8,000
4,000
Total
332,000
261,000
152,000
97,875
74,000
113,000
74,000
159,000
140,000
14,000
154,000
57,583
86,375
–
57,583
120,000
202,000
22,417
80,000
122,000
159,000
21,417
22,417
98,875
8,750
158,000
123,000
135,208
80,000
70,000
105,000
43,750
70,000
39,375
4,000
8,000
3,000
4,000
2,000
74,000
113,000
46,750
74,000
41,375
175,000
19,000
194,000
–
70,000
105,000
140,000
–
4,000
11,000
12,000
–
74,000
116,000
152,000
–
–
–
–
–
–
–
–
–
–
–
–
140,000
105,000
105,000
70,000
11,000
11,000
11,000
4,000
151,000
116,000
116,000
74,000
1 Stephan Teuscher receives €1,500 per year for his service on the Supervisory Board of DHL Hub Leipzig GmbH.
33
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
REPORT ON
ECONOMIC POSITION
Overall assessment
In financial year 2019, Deutsche Post DHL Group suc-
ceeded in increasing revenue in all divisions. Group EBIT
came to €4.1 billion, meaning that we reached the higher
profit target that we had defined during the course of 2019.
Earnings benefitted significantly from the effects of the re-
structuring activities in the Post & Parcel Germany division.
The Global Forwarding, Freight and Supply Chain divisions
also reported higher earnings thanks to profitability im-
provements. In the new eCommerce Solutions division,
earnings were negatively impacted by restructuring costs.
Express continued to see strong growth, and the measures
underway to revamp the division’s intercontinental fleet
will increase the Express division’s already high product-
ivity levels even further. Given the capital expenditure of
€3.6 billion, we are very satisfied with the performance of
free cash flow. All in all, the Board of Management assesses
the Group’s financial position as being very sound.
Forecast / actual comparison
Forecast / actual comparison
Targets for 2019
Results for 2019
Targets for 2020
EBIT
EBIT
EBIT 2
Group: €4.0 billion to €4.3 billion 1
Post & Parcel Germany division:
€1.1 billion to €1.3 billion 1
DHL divisions: €3.4 billion to
€3.5 billion
Corporate Functions: around
€–0.5 billion
Group: €4.1 billion
Post & Parcel Germany division:
€1.2 billion
DHL divisions: €3.4 billion
Corporate Functions: €–0.5 billion
Group: more than €5.0 billion.
Post & Parcel Germany division:
more than €1.6 billion.
DHL divisions: more than €3.7 billion.
Corporate Functions: around
€–0.35 billion.
EAC
EAC
EAC
EAC projected to increase in line with
EBIT.
EAC rose to €1.5 billion in line with
EBIT.
EAC projected to increase in line with
EBIT.
Cash flows
Cash flows
Cash flows 3
Free cash flow to exceed €0.5 billion
(including the renewal of the
intercontinental Express fleet).
Free cash flow reached €0.9 billion
(including the renewal of the
intercontinental Express fleet).
Free cash flow of around €1.4 billion
(including around €500 million for
the renewal of the intercontinental
Express fleet).
Capital expenditure (capex)
Capital expenditure (capex)
Capital expenditure (capex) 4
Investment spending (excluding
leases): around €3.7 billion (including
the debt-financed renewal of the
Express intercontinental fleet).
Investment spending (excluding
leases): €3.6 billion ( including the
debt-financed renewal of the Express
intercontinental fleet).
Investment spending (excluding
leases): approx. €2.6 billion (plus
around €500 million for the renewal
of the intercontinental Express fleet).
Dividend distribution
Dividend distribution
Dividend distribution
Dividend payout of 40 % to 60 % of
net profit.
To be proposed: dividend payout of
59 % of net profit.
Dividend payout of 40 % to 60 % of
net profit.
Employee Opinion Survey
Employee Opinion Survey
Employee Opinion Survey
Increase our Active Leadership KPI
by one percentage point.
Active Leadership KPI increased
by two percentage points to 78 %.
Employee Engagement KPI of 78 %.
Greenhouse gas efficiency
Greenhouse gas efficiency
Greenhouse gas efficiency
CEX projected to increase by one
index point.
CEX up by two index points to 35.
CEX will increase by another index
point.
1 Forecast raised during the year. 2 Before effects from the coronavirus and expenses in connection with the realignment of StreetScooter. 3 Before effects from
the coronavirus. 4 Including effects from the coronavirus and the StreetScooter realignment.
34
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Economic parameters
Global economy loses significant momentum
The world economy lost significant momentum in 2019. In
the industrial countries, average GDP growth declined to
1.7 %. Growth in the emerging markets also faltered, drop-
ping to 4.2 %. Total global economic output grew by 2.6 %, a
significant slowdown compared with the prior year (3.2 %).
Global trading volumes registered a slight increase com-
pared with 2018. However, the increase was as low as had
been seen since the years of 2008 and 2009 (IHS Markit:
1.9 %; IMF: 1.1 %; OECD: 1.2 %).
Asia again proved to be the growth driver for the global
economy in 2019. However, even here GDP growth sof-
tened to just 4.4 %. One reason for the slowdown was the
continued decline in growth in China. After reaching 6.8 %
in 2018, the Chinese economy expanded by only 6.2 % in
the reporting period. The main factor in the growth decline
was the trade conflict with the United States. In Japan, the
pace of growth suffered somewhat from the value added
tax increase in October. The Japanese economy nonetheless
reported expansion of 1.1 % in 2019 compared with 0.3 % in
the previous year.
In the United States, GDP growth softened slightly in
2019 to settle at a solid 2.3 % (previous year: 2.9 %). Positive
factors such as consumer spending and residential invest-
ment were offset by negative factors such as the effects of
the trade dispute with China. In terms of volumes, U. S. ex-
ports actually declined, whereas imports were up yet again.
The eurozone economy lost momentum in 2019, with
the effects being felt most strongly in the EU countries with
the highest export levels. Eurozone demand also slowed
towards the end of the year as the uncertain business en-
vironment prompted companies to scale back or postpone
investments. The decrease in foreign trade was the main
factor in the decline in GDP growth to 1.2 % in the eurozone
(previous year: 1.9 %).
After getting off to a good start at the beginning of
2019, the German economy stagnated as the year pro-
gressed. Consumer spending continued to be propped
up by heightened consumer confidence, very low unem-
ployment levels and above-average wage and pension in-
creases. The average number of employed persons rose to
45.3 million (previous year: 44.8 million), and government
spending increased significantly once again in 2019. Gross
fixed capital formation likewise proved robust, despite
corporate concerns regarding Brexit and a rise in global
protectionist tendencies. All of these factors resulted in a
deceleration in GDP growth in Germany, from 1.5 % in 2018
to 0.5 % in 2019.
Drop in average price of oil for the year
In 2019, the price of oil was impacted by weak global de-
mand in combination with increased crude oil production in
the United States. Risk events such as the September attack
on Saudi oil processing facilities in Abqaiq led to short-term
price hikes. However, the average annual price per barrel of
Brent crude declined from US$71 in 2018 to US$64 in 2019.
Euro remains weak against the dollar
The deteriorating economic outlook led the European
Central Bank (ECB) to initiate another change of course
in monetary policy. The ECB decided to resume net asset
purchases at a monthly pace of €20 billion effective as of
1 November. The main refinancing operations rate was
left at 0.00 %, and the deposit facility rate was lowered to
–0.50 %. The US Federal Reserve likewise announced a turn-
around in monetary policy in 2019. In light of the highly un-
certain outlook, the Fed lowered the target rate by a total of
three-quarters of a percentage point to 1.75 % in three steps.
The euro remained weak against the dollar in 2019. The
nominal effective exchange rate for the euro is nonetheless
well above the long-term average for a basket of currencies,
due in particular to the euro’s appreciation against sterling
and the Chinese renminbi.
Government bond yields trending downwards
The first half of 2019 saw a sharp increase in risk premiums
on eurozone bond markets, due in part to the political situ-
ation in Italy and the uncertainty surrounding Brexit. Yields
on ten-year German government bonds slipped into nega-
tive terrain for the first time ever to end the year at –0.15 %
(previous year: 0.25 %). Yields on ten-year US government
bonds also fell in 2019 but remained well into positive ter-
ritory. Ten-year US government bonds were yielding 1.92 %
at the end of the year (previous year: 2.68 %).
Stock markets soared in 2019 despite the difficult
business climate, which was especially problematic for
European companies. Growth was driven primarily by
expectations of an economic upturn and an end to Brexit-
based uncertainty as well as the general liquidity situation
on the markets. The weaker outlook had already been
priced into corporate earnings forecasts for the most
part. The German DAX ended the year at 13,249 points, a
year-on-year increase of 25.5 %. The EURO STOXX 50 was
up 24.8 %, and the STOXX Sustainability Index registered
growth of 26.2 %. In the United States, the S & P 500 ended
the year up 28.9 %.
35
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Trade volumes: average annual growth rate, 2018 to 2019
%
Export
Asia Pacific
Europe
Latin America
MEA (Middle East and Africa)
North America
Import
Asia Pacific
Europe
Latin America
MEA
(Middle East and Africa)
North America
–1.9
0.1
6.7
–2.8
– 4.6
0.5
–1.7
3.6
8.3
–1.5
–2.8
–2.1
–1.0
6.0
0.7
2.9
– 0.3
8.3
12.7
5.6
– 4.1
2.1
5.2
7.1
– 5.5
Source: Seabury Consulting, as at 3 February 2020; based upon all relevant ocean and air freight trading volumes in tonnes, excluding liquids and bulk goods.
Excluding shipments within the European Union free trade zone.
Trade growth stagnates
The global trade movements of relevance to us – air and
ocean freight sent in containers, excluding liquids and bulk
goods – declined by 0.4 % in the year under review (previ-
ous year: +4.3 %). Air freight volumes declined by 4.6 %, due
to the trade conflict and weakening world trade, whereas
ocean freight volumes were down by 0.4 %. The volume
declines were particularly prevalent in North America and
Asia.
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 infor-
mation regarding this issue and legal risks is contained in
note 44 to the consolidated financial statements.
Significant events
In February, we completed the sale of our Supply Chain
operations in China, Hong Kong and Macao, resulting in a
net payment of €653 million and a deconsolidation gain of
€439 million.
Since the third quarter, we have extended the group of
(German- based) employees to whom we offer the option of
taking a lump-sum payment in lieu of receiving a lifetime
pension under our occupational pension plan. In the fourth
quarter, we expanded the eligible group of employees
even further. This resulted in total income of €258 million
from the remeasurement of pension obligations, most of
which we used to offset costs incurred to restructure the
Post & Parcel Germany division.
We spent a net amount of €481 million on restructur-
ing measures as part of a profit improvement initiative in
financial year 2019.
Consolidated revenue also increases due to
currency effects
In financial year 2019, consolidated revenue rose by
€1,791 million to €63,341 million, for reasons including
positive currency effects of €746 million. The proportion of
revenue generated abroad increased from 69.5 % to 69.9 %.
Revenue for the fourth quarter of 2019 was up by €30 mil-
lion to €16,956 million. It was also given a boost by currency
effects of €199 million. The prior-year quarter still included
revenue from the Supply Chain business in China.
Income of €439 million from the sale of the Supply
Chain business in China was the main factor driving up
other operating income considerably to €2,351 million.
Results of operations
Portfolio largely unchanged
Beyond the sale of the Supply Chain business in China,
our portfolio did not change significantly in the year un-
der review.
Revenue, 2019
€ m
63,341
2018
61,550
Change
+ 2.9 %
36
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Selected indicators for results of operations
Revenue
Profit from operating activities (EBIT)
Return on sales 1
EBIT after asset charge (EAC)
Consolidated net profit for the period 2
Earnings per share 3
Dividend per share
€ m
€ m
%
€ m
€ m
€
€
2018
61,550
3,162
5.1
716
2,075
1.69
1.15
2019
63,341
4,128
6.5
1,509
2,623
2.13
1.25 4
Q 4 2018
16,926
1,134
6.7
509
813
0.66
–
Q 4 2019
16,956
1,258
7.4
595
858
0.70
–
1 EBIT / revenue. 2 After deduction of non-controlling interests. 3 Basic earnings per share. 4 Proposal.
Increase in staff costs
Currency effects in particular increased materials expense
by €397 million to €32,070 million. At €21,610 million, staff
costs were up €785 million over the previous year’s figure,
due primarily to an increased headcount and the collective
wage increase in Germany beginning on 1 October 2018.
The previous year’s figure included an expense of €400 mil-
lion for the early retirement programme in what is now the
Post & Parcel Germany division. In the reporting period, this
figure was €123 million. Depreciation, amortisation and
impairment losses rose from €3,292 million to €3,684 mil-
lion, due in part to investments, which markedly increased
leased property, plant and equipment. The purchase of
aircraft as part of modernisation of our Express intercon-
tinental fleet also contributed to this rise. Other operating
expenses declined by €166 million to €4,431 million. In the
reporting period, this item included restructuring expenses
in the Post & Parcel Germany, Supply Chain and eCommerce
Solutions divisions, whilst in the previous year there was a
negative effect from customer contracts.
Consolidated EBIT up 30.6 %
In the year under review, consolidated EBIT stood at
€4,128 million, €966 million over the previous year’s level
(€3,162 million). At €1,258 million, EBIT in the fourth quar-
ter exceeded the comparable prior-year figure by 10.9 %.
Primarily negative effects from the measurement of stock
appreciation rights (SAR s) at fair value and higher interest
expense on lease liabilities caused net finance costs to in-
crease from €–576 million to €–654 million. Profit before
income taxes rose by €888 million to €3,474 million. In-
come taxes increased by €336 million to €698 million.
EBIT, 2019
€ m
4,128
2018
3,162
Change
+ 30.6 %
37
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Changes in revenue, other operating income and operating expenses, 2019
Total dividend and dividend per no-par value share
€ m
+ / – %
Revenue
Other operating income
Materials expense
63,341
2,351
32,070
Staff costs
21,610
3.8
2.9 Currency effects increase figure by €746 million
22.8 Includes income of €439 million from the sale of the Supply Chain business in China
1.3
Currency effects increase figure by €510 million
Higher transport costs
Rise in headcount
Currency effects increase figure by €220 million
The prior-year figure included expenses of €400 million for the early retirement
programme in the Post & Parcel Germany division; this figure was €123 million in the
reporting period.
The prior-year figure included income from the remeasurement of pension obligations
totalling €108 million; this figure was €258 million in the reporting period
3,684
11.9
Collective wage increase in Germany as at 1 October 2018
Investment-related increase in leased property, plant and equipment
Depreciation,
amortisation and
impairment losses
€ m
968
0.80
1,030
1,027
0.85
0.85
1,409
1,419
1.15
1.15
1,270
1.05
1,546
1.25
13
14
15
16
17
18
19 1
Dividend per no-par value share (€)
Other operating expenses
4,431
–3.6
Prior-year figure included a negative effect from customer contracts
Include restructuring expenses of €150 million in the Post & Parcel Germany, Supply Chain
1 Proposal.
and eCommerce Solutions divisions
Personal insurance expenses in the amount of €195 million were reclassified to staff costs.
Significant improvement in consolidated net profit
Consolidated net profit showed a sharp improvement in
2019, rising from €2,224 million to €2,776 million. Of this
amount, €2,623 million is attributable to Deutsche Post AG
shareholders and €153 million to non-controlling interest
shareholders. Basic earnings per share increased from
€1.69 to €2.13 and diluted earnings per share from €1.66
to €2.09.
Proposed dividend: €1.25 per share
Our finance strategy calls for paying out 40 % to 60 % of
net profits as dividends as a general rule. The Board of
Management and the Supervisory Board will therefore
propose a dividend of €1.25 per share for financial year
2019 to shareholders at the Annual General Meeting on
13 May 2020 (previous year: €1.15). The payout ratio in re-
lation to consolidated net profit attributable to the share-
holders of Deutsche Post AG amounts to 59 %. The dividend
yield based on the year-end closing price for our shares is
3.7 %. The dividend will be distributed on 18 May 2020 and
is tax-free in part for shareholders resident in Germany. It
does not entitle recipients to a tax refund or a tax credit.
EBIT after asset charge (EAC) grows significantly
EAC improved in 2019, rising from €716 million to
€1,509 million. Whilst EBIT was up considerably, the im-
puted asset charge rose only moderately.
EBIT after asset charge (EAC)
€ m
EBIT
Asset charge
EAC
2018
3,162
2019
4,128
–2,446
–2,619
716
1,509
+ / – %
30.6
–7.1
>100
38
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
The net asset base increased by around €1.9 billion to
€30,484 million as at the reporting date. Intangible assets
and property, plant and equipment increased in particu-
lar, mainly on account of the acquisition of freight aircraft
and investments in warehouses, sorting facilities and the
vehicle fleet.
Financial position
Selected cash flow indicators
€ m
Cash and cash equivalents as at 31 December
Operating provisions were up year-on-year, whereas
Change in cash and cash equivalents
other non-current assets and liabilities decreased.
Net asset base (consolidated) 1
€ m
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Intangible assets and property,
plant and equipment
Net working capital
Operating provisions
(excluding provisions for
pensions and similar
obligations)
Other non-current assets
and liabilities
Net asset base
31 Dec.
2018
31 Dec.
2019
+ / – %
31,254
33,285
– 919
– 818
6.5
11.0
–1,865
–2,036
– 9.2
124
53
– 57.3
28,594
30,484
6.6
1 Assets and liabilities as described in the segment reporting,
note 9 to the consolidated financial statements.
Financial management is a centralised function
in the Group
The Group’s financial management activities include man-
aging liquidity along with hedging against fluctuations in
interest rates, currencies and commodity prices, arranging
Group financing, issuing guarantees and letters of comfort
and liaising with rating agencies. Responsibility for these
activities rests with Corporate Finance at Group headquar-
ters in Bonn, which is supported by three Regional Treas-
ury Centres in Bonn ( Germany), Weston (Florida, USA) and
Singapore. The regional centres act as interfaces between
Group headquarters and the operating companies, advise
the companies on 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 in addition to preserving the
Group’s financial stability and flexibility over the long term.
In order to maintain its unrestricted access to the capital
markets, the Group continues to aim for a credit rating ap-
propriate to the sector.
2018
3,017
–20
5,796
–2,777
–3,039
2019
2,862
–203
6,049
–2,140
– 4,112
Q 4 2018
Q 4 2019
3,017
809
2,652
–1,481
–362
2,862
654
2,663
–1,095
– 914
Maintaining financial flexibility and low cost of capital
The Group’s finance strategy builds upon the principles and
aims of financial management. In addition to the interests
of shareholders, the strategy also takes creditor 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 having a target
rating of “BBB+”, which is managed via a dynamic per-
formance metric known as funds from operations to debt
(FFO to debt). Our strategy additionally includes a sustained
dividend policy and clear priorities regarding the use of
excess liquidity, which is to be used to distribute special
dividends or to buy back shares.
39
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Finance strategy
Credit rating
Maintain “BBB+” and “Baa1” ratings.
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
Pay out special dividends or implement share buyback programme.
Debt portfolio
Syndicated credit facility taken out as liquidity reserve.
Debt Issuance Programme established for issuing bonds.
Bonds issued to cover long-term capital requirements.
Investors
Reliable and consistent information from
the company.
Predictability of expected returns.
Group
Preserve financial and strategic flexibility.
Assure low cost of capital.
FFO to debt
€ m
Operating cash flow before changes
in working capital
Interest received
Interest paid
Adjustment for pensions
2018
2019
6,079
6,045
52
526
309
82
608
190
Funds from operations, FFO
5,914
5,709
Reported financial liabilities
16,462
16,974
Financial liabilities at fair value
through profit or loss 1
Adjustment for pensions
Surplus cash and near-cash
investments 1
Debt
FFO to debt (%)
38
4,110
23
4,872
2,683
1,916
17,851
19,907
33.1
28.7
1 Reported cash and cash equivalents and investment funds callable at sight,
less cash needed for operations.
Funds from operations (FFO) represents operating cash
flow before changes in working capital plus interest re-
ceived less interest paid and adjusted for pensions, as
shown in the FFO to debt calculation. In addition to finan-
cial liabilities and surplus cash and near-cash investments,
the figure for debt also includes pension liabilities funded
by provisions.
The FFO to debt performance metric saw a year-on-
year decrease in the year under review because funds from
operations declined and debt grew.
Funds from operations fell by €205 million to
€5,709 million. Interest received was up, primarily due to
interest income from currency hedging transactions. The
amount of interest paid increased as more interest was paid
on leases and bonds as well as in connection with additional
tax payments. The adjustment for pensions decreased,
chiefly due to lower pension payments from plan assets.
Debt rose by €2,056 million year-on-year to €19,907 mil-
lion. Reported financial liabilities increased because of
higher lease liabilities and amounts due to banks. Conversely,
promissory note loans were repaid early in the amount of
€265 million in 2019. The adjustment for pensions rose,
since pension obligations increased faster than plan assets.
Surplus cash and near-cash investments dropped despite
free cash flow of €867 million, mainly due to dividends
distributed.
Cash and liquidity managed centrally
The cash and liquidity of our globally operating subsidiar-
ies 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 coun-
tries where this practice is ruled out for legal reasons, inter-
nal and external borrowing and investment are managed
centrally by Corporate Treasury. In this context, we observe
a balanced banking policy in order to remain independent
40
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
No change in the Group’s credit rating
The ratings of “BBB+” issued by Fitch Ratings (Fitch) and
“A3” issued by Moody’s Investors Service (Moody’s) remain
in effect for our credit quality. The stable outlook from both
rating agencies also still applies. We remain well positioned
in the transport and logistics sector with these ratings. The
following table shows the ratings as at the reporting date
and the underlying factors. The complete and current ana-
lyses by the rating agencies and the rating categories can
be found at
dpdhl.com / en / investors.
No change in the
Group’s credit rating
of BBB+ and A3
year, and does not contain any covenants concerning the
Group’s financial indicators. Thanks to our solid liquidity
situation, 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 maintain long-term relationships with
the financial institutions we entrust with our business. In
addition to credit lines, we meet our borrowing require-
ments through other independent sources of financing,
such as bonds, promissory note loans and leases. Most
debt is taken out centrally in order to leverage economies
of scale and specialisation benefits and hence minimise
borrowing costs.
Promissory note loans in the amount of €0.3 billion
were repaid early in the year under review. Further infor-
mation on bonds is contained in
note 38 to the consolidated
financial statements.
Sureties, letters of comfort and guarantees
Deutsche Post AG provides security for the loan agree-
ments, leases and supplier contracts entered into by Group
companies, associates and joint ventures by issuing sure-
ties, letters of comfort or guarantees as needed. This prac-
tice allows better conditions to be negotiated locally. The
sureties are provided and monitored centrally.
of individual banks. Our subsidiaries’ intra-group revenue
is also pooled and managed by our in-house bank (in-
ter-company clearing) in order to avoid paying external
bank charges and margins. Payment transactions are exe-
cuted in accordance with uniform guidelines using stand-
ardised processes and IT systems. Many Group companies
pool their external payment transactions in the intra-group
Payment Factory, which executes payments on behalf of
the respective companies via Deutsche Post AG’s central
bank accounts.
Limiting market risk
The Group uses both primary and derivative financial in-
struments 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 com-
modity 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.
Flexible and stable financing
The Group covers its long-term financing requirements by
means of equity and debt. This ensures our financial stabil-
ity and also provides adequate flexibility. Our most import-
ant source of funds is net cash from operating activities.
We also have a syndicated credit facility in a total vol-
ume of €2 billion that guarantees us favourable market
conditions and acts as a secure, long-term liquidity reserve.
The facility was extended in the year under review and now
runs until 2024. It includes one more renewal option of one
41
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Agency ratings
Fitch Ratings
Long-term: BBB+
Short-term: F2
Outlook: stable
Rating factors
Moody’s Investors Service
Long-term: A3
Short-term: P–2
Outlook: stable
Rating factors
Balanced business risk profile.
Growth in internet-led parcel volumes.
Strong position in global time-definite express services with continued growth and margin
improvement.
Solid credit metrics and good liquidity.
Scale and solid business profile, enhanced by global leadership position in Express
and Logistics and large-scale mail business in Germany.
Rating bolstered by indirect interest of 21% held by the federal government and the
importance of the company’s services to the German economy.
Solid credit metrics.
Rating factors
Rating factors
Structural mail volume declines in the Post & Parcel Germany division and challenges in
managing the cost structure in the division.
Exposure to global market volatility and competitiveness through the DHL divisions.
Challenges in domestic mail business resulting from structural decline in traditional
mail business.
Exposure to highly competitive mature markets and volatile market conditions in the
logistics business.
Growing investments putting downward pressure on cash generation.
Liquidity and sources of funds
As at the reporting date, the Group had cash and cash equiv-
alents in the amount of €2.9 billion (previous year: €3.0 bil-
lion) at its disposal. The centrally available cash is either
invested on the money and capital markets in the short
term or deposited in existing bank accounts. These central,
short-term financial investments had a volume of €1.5 bil-
lion as at the reporting date (previous year: €2.3 billion).
The following table gives a breakdown of the financial
liabilities reported in the balance sheet. Additional infor-
mation is provided in
note 38 to the consolidated financial
statements.
Financial liabilities
€ m
Lease liabilities
Bonds
Amounts due to banks
Promissory note loans
Financial liabilities measured at fair value
through profit or loss
Other financial liabilities
2018
9,859
5,472
264
499
38
330
2019
10,301
5,467
468
235
23
480
16,462
16,974
Capital expenditure for assets acquired up sharply
Investments in property, plant and equipment and intan-
gible assets acquired (excluding goodwill) amounted to
€3,617 million in the year under review (previous year:
€2,648 million). A breakdown of capex into asset classes
and regions is presented in
notes 9, 21 and 22 to the consoli-
dated financial statements.
42
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Capex and depreciation, amortisation and impairment losses, full year
Post & Parcel
Germany
adjusted 1
2018
620
1
621
2019
469
29
498
Express
2019
2,080
940
2018
1,190
739
1,929
3,020
Global
Forwarding,
Freight
Supply Chain
eCommerce
Solutions
adjusted 1
Corporate
Functions
Consolidation 2
2018
2019
2018
2019
2018
2019
2018
2019
110
158
268
114
159
273
282
805
323
701
1,087
1,024
166
175
341
132
126
258
290
518
808
502
772
1,274
303
343
1,152
1,314
238
254
826
897
151
213
623
663
2.05
1.45
1.67
2.30
1.13
1.07
1.32
1.14
2.26
1.21
1.30
1.92
2018
–10
1
– 9
–1
–
2019
–3
0
–3
0
–
Group
2019
3,617
2,727
6,344
2018
2,648
2,397
5,045
3,292
3,684
1.53
1.72
Capex (€ m) relating to assets acquired
Capex (€ m) relating to leased assets
Total (€ m)
Depreciation, amortisation and
impairment losses (€ m)
Ratio of total capex to depreciation,
amortisation and impairment losses
Note 9 to the consolidated financial statements.
1
2 Including rounding.
Capex and depreciation, amortisation and impairment losses, Q 4
Capex (€ m) relating to assets acquired
Capex (€ m) relating to leased assets
Total (€ m)
Depreciation, amortisation and
impairment losses (€ m)
Ratio of total capex to depreciation,
amortisation and impairment losses
Note 9 to the consolidated financial statements.
1
2 Including rounding.
Post & Parcel
Germany
adjusted 1
2018
193
0
193
2019
184
2
186
Global
Forwarding,
Freight
Express
Supply Chain
eCommerce
Solutions
adjusted 1
Corporate
Functions
Consolidation 2
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2019
2018
511
102
613
557
216
773
35
37
72
65
41
54
95
65
82
216
298
92
280
372
52
81
133
217
217
42
52
42
94
54
111
143
254
120
150
270
164
169
79
116
312
345
2.44
1.60
1.96
2.24
1.11
1.46
1.37
1.71
3.17
1.74
1.55
1.60
2018
–39
2
–37
–1
–
–1
0
–1
0
–
Group
2019
1,045
744
945
581
1,526
1,789
878
966
1.74
1.85
43
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
In the Post & Parcel Germany division, the largest capex
portion was attributable to the expansion of our network.
Investments in the Express division related to buildings
and technical equipment. Capital spending also focussed
upon continuous maintenance and renewal of our aircraft
fleet, including further advance payments for the renewal
of the Express intercontinental aircraft fleet.
In the Global Forwarding, Freight division, we invested
in warehouses, office buildings and IT.
In the Supply Chain division, the majority of funds were
invested to support new business in all regions, mostly in
the Americas and EMEA regions.
In the eCommerce Solutions division, most of the in-
vestments were attributable to a new terminal in the Neth-
erlands and investments in India and the United States.
At Corporate Functions, the higher capital spending
during the reporting period was made increasingly in the
vehicle fleet, in IT equipment and in expanded production
of StreetScooter electric vehicles.
Higher operating cash flow
Net cash from operating activities increased by €253 million
to €6,049 million in financial year 2019. Based upon EBIT,
which at €4,128 million was well over the prior year-figure
(€3,162 million), all non-cash income and expense items
were adjusted. The payments resulting from the sale of
the Supply Chain business in China are shown in net cash
from / used in investing activities. Depreciation, amortisa-
tion and impairment losses were up from €3,292 million
to €3,684 million due to investment activity. The change in
provisions was from €282 million to €–506 million, mainly
due to the early retirement programme in the former Post -
eCommerce - Parcel division. Income tax payments rose
by €264 million to €843 million. Net cash from operating
activities before changes in working capital decreased
slightly, by €34 million to €6,045 million. The change in
working capital resulted in a net cash inflow of €4 million.
By contrast, a net cash outflow of €283 million was gener-
ated in the previous year, chiefly because we used cash to
build up inventories that were decreased again in the year
under review.
Net cash used in investing activities declined mark-
edly from €2,777 million to €2,140 million. The key factor
Calculation of free cash flow
€ m
Net cash from operating activities
Sale of property, plant and equipment and intangible assets
Acquisition of property, plant and equipment and intangible assets
Cash outflow from change in property, plant and equipment
and intangible assets
Disposals of subsidiaries and other business units
Disposals of investments accounted for using the equity method
and other investments
Acquisition of subsidiaries and other business units
Acquisition of investments accounted for using the equity method
and other investments
Cash outflow / inflow from acquisitions / divestitures
Proceeds from lease receivables
Repayment of lease liabilities
Interest on lease liabilities
Cash outflow from leases
Interest received
Interest paid
Net interest paid
Free cash flow
here was net proceeds from the sale of the Supply Chain
business in China amounting to €653 million. In addition,
the sale of money market funds increased proceeds from
current financial assets by €800 million. Investments in
property, plant and equipment and intangible assets rose
by €963 million to €3,612 million; €1.1 billion was paid to
modernise the Express intercontinental aircraft fleet.
2018
5,796
151
–2,649
2019
6,049
138
–3,612
–2,498
–3,474
14
23
– 58
–39
– 60
17
–1,722
–376
–2,081
52
–150
– 98
1,059
702
0
–14
– 8
680
32
–1,894
– 416
–2,278
82
–192
–110
867
Q 4 2018
2,652
Q 4 2019
2,663
105
– 851
–746
9
23
0
– 6
26
4
– 465
– 99
– 560
13
–78
– 65
34
– 933
– 899
24
0
0
0
24
13
– 476
–106
– 569
23
–79
– 56
1,307
1,163
44
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
gations are covered by EBIT. At 7.8, it was up on the previous
year’s level (6.7). Net gearing was 48.2 % as at 31 Decem-
ber 2019.
Net debt
€ m
Non-current financial liabilities
Current financial liabilities
Financial liabilities 1
Cash and cash equivalents
Current financial assets
Positive fair value of non-current
financial derivatives 2
Financial assets
Net debt
31 Dec.
2018
31 Dec.
2019
13,838
13,708
2,425
2,916
16,263
16,624
3,017
943
2,862
394
0
1
3,960
3,257
12,303
13,367
1 Less operating financial liabilities.
2 Recognised in non-current financial assets in the balance sheet.
Free cash flow deteriorated from €1,059 million to €867 mil-
lion. Apart from the effects mentioned above, greater cash
funds were required for leases.
At €4,112 million, net cash used in financing activities
was €1,073 million significantly higher than in the prior-year
period (€3,039 million). In the previous year, we issued a
€750 million bond and placed promissory note loans of
€500 million. In the reporting year we repaid an amount of
€265 million early, whilst also taking out loans of €349 million.
Cash and cash equivalents fell from €3,017 million as
at 31 December 2018 to €2,862 million.
Net assets
Selected indicators for net assets
Equity ratio
Net debt
Net interest cover
Net gearing
31 Dec.
2018
31 Dec.
2019
27.5
27.6
12,303
13,367
6.7
47.0
7.8
48.2
%
€ m
%
Consolidated total assets up
The Group’s total assets amounted to €52,169 million as
at 31 December 2019, €1,699 million higher than at 31 De-
cember 2018 (€50,470 million).
Intangible assets increased from €11,850 million to
€11,987 million because additions and positive currency
effects exceeded amortisation and impairment losses
and disposals. Property, plant and equipment rose from
€19,202 million to €21,303 million, primarily on account
of the €1.1 billion already capitalised for the renewal of
the Express intercontinental aircraft fleet, amongst other
things for advance payments. Other non-current assets in-
creased slightly by €42 million to €395 million. Our net sale
of money market funds sharply reduced current financial
assets from €943 million to €394 million. Trade receivables
rose by €314 million to €8,561 million. Other current assets
increased by €229 million to €2,598 million on the back of a
large number of minor factors. Assets held for sale declined
considerably by €417 million to €9 million after the sale of
the Supply Chain business in China.
At €14,117 million, equity attributable to Deutsche
Post AG shareholders was higher than at 31 Decem -
ber 2018 (€13,590 million). Consolidated net profit for the
period and currency effects increased this figure, whilst
actuarial losses from pension obligations and the dividend
distribution decreased it. Lower interest rates resulted in
an increase in provisions for pensions and other obligations
by €754 million to €5,102 million. Financial liabilities rose
from €16,462 million to €16,974 million, primarily as a re-
sult of an increase of €442 million in lease liabilities due to
investments. Trade payables decreased from €7,422 mil-
lion to €7,225 million. Other current liabilities increased
significantly by €481 million to €4,913 million, due primar-
ily to an increase in employee-related liabilities. After the
disposal of the Supply Chain business in China, liabilities
associated with assets held for sale declined to €14 million.
Net debt increases to €13,367 million
Our net debt rose from €12,303 million as at 31 Decem-
ber 2018 to €13,367 million as at 31 December 2019 also
due to higher lease liabilities. At 27.6 %, the equity ratio was
slightly higher than at 31 December 2018 (27.5 %). Net in-
terest cover indicates the extent to which net interest obli-
45
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Balance sheet structure of the Group as at 31 December
€ m
Intangible assets
ASSETS
50,470
52,169
23 %
23 %
Equity
EQUITY AND LIABILITIES
50,470
52,169
27 %
28 %
Revenue surpasses prior-year level
Thanks to the good performance of our parcel business,
division revenue rose 2.5 % to €15,484 million in the re-
porting period (previous year: €15,108 million). Its reve-
nue for the fourth quarter was up 2.4 % compared with the
prior-year period.
Property, plant and equipment
38 %
41 %
Non-current provisions and liabilities
40 %
40 %
Trade receivables
Other assets
16 %
23 %
16 %
20 %
Current provisions and liabilities
33 %
32 %
2018
2019
2018
2019
Divisions
POST & PARCEL GERMANY DIVISION
Key figures, Post & Parcel Germany
€ m
Revenue
of which Post
Parcel
Other / Consolidation
Profit from operating activities (EBIT)
Return on sales (%) 2
Operating cash flow
Note 9 to the consolidated financial statements.
1
2 EBIT / revenue.
2018
adjusted 1
2019
+ / – %
Q 4 2018
adjusted 1
Q 4 2019
+ / – %
15,108
15,484
9,760
5,556
–208
683
4.5
1,106
9,640
6,073
–229
1,230
7.9
1,137
2.5
–1.2
9.3
–10.1
80.1
–
2.8
4,189
2,626
1,627
– 64
372
8.9
544
4,290
2,600
1,753
– 63
522
12.2
657
2.4
–1.0
7.7
1.6
40.3
–
20.8
Moderate revenue decline in the Post business unit
In the Post business unit, revenue was €9,640 million in the
year under review and thus 1.2 % below the prior-year level
of €9,760 million. Volumes declined by 2.5 %. Fourth-quar-
ter revenue declined 1.0 % to €2,600 million.
As expected, Mail Communication volumes remained in
decline due to progressive electronic substitution. However,
the postage rate increase that took effect on 1 July 2019
meant that revenue for the year as a whole only registered
a moderate decline.
In the Dialogue Marketing business, activities are shift-
ing increasingly to online media. Although we have taken
steps to increase sales to e-commerce businesses, the
measures implemented were unable to fully compensate
for the declines in revenue and volumes.
E-commerce brings further growth in the Parcel
business unit
Revenue in our Parcel business unit was €6,073 million in
the reporting period, an increase of 9.3 % on the prior-year
figure. Growth in the fourth quarter amounted to 7.7 %. Sus-
tained growth in e-commerce was responsible for the rise
in volumes of 5.9 % to 1,567 million items in the reporting
period and 3.9 % to 449 million items in the fourth quarter.
The fact that revenue growth outpaced volume growth is
attributable to price increases.
46
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Post & Parcel Germany: revenue
€ m
Post
of which Mail Communication
Dialogue Marketing
Other / Consolidation Post
Parcel
1
Note 9 to the consolidated financial statements.
Post & Parcel Germany: volumes
Mail items (millions)
Post
of which Mail Communication
Dialogue Marketing
Parcel
1
Note 9 to the consolidated financial statements.
2018
adjusted 1
9,760
6,329
2,205
1,226
5,556
2019
+ / – %
9,640
6,278
2,130
1,232
6,073
–1.2
– 0.8
–3.4
0.5
9.3
Q 4 2018
adjusted 1
2,626
1,703
602
321
Q 4 2019
+ / – %
2,600
1,692
572
336
–1.0
– 0.6
– 5.0
4.7
7.7
1,627
1,753
2018
adjusted 1
2019
+ / – %
17,820
17,367
7,709
8,417
1,479
7,450
8,197
1,567
–2.5
–3.4
–2.6
5.9
Q 4 2018
adjusted 1
4,761
2,068
2,235
432
Q 4 2019
+ / – %
4,633
1,944
2,224
449
–2.7
– 6.0
– 0.5
3.9
Significant EBIT improvement compared to prior year
with one-time effects
EBIT in the division improved significantly in 2019, ris-
ing from €683 million in the prior year to €1,230 million.
Earnings for the previous year had been heavily impacted
by non-recurring expenses for the early retirement pro-
gramme for civil servants and by restructuring measures
amounting to €502 million. However, the prior-year figure
also included a positive non-recurring effect of €108 mil-
lion from the remeasurement of pension obligations. In the
reporting period, income of €234 million resulted from the
remeasurement of pension obligations, offset by additional
restructuring costs in the same amount. Return on sales for
the reporting period rose from 4.5 % to 7.9 %. The Post & Par-
cel Germany division generated EBIT of €522 million in the
fourth quarter of 2019 (previous year: €372 million). The
prior-year figure included restructuring expenses totalling
€59 million. The fourth quarter of 2019 additionally saw net
income of €144 million from the remeasurement of pension
obligations, although this was offset by additional restruc-
turing costs in the same amount. Operating cash flow rose
to €1,137 million in the reporting period, due mainly to the
good operating performance of working capital.
47
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
EXPRESS DIVISION
Key figures, Express
€ m
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
1 EBIT / revenue.
Express: revenue by product
€ m per day 1
Time Definite International (TDI)
Time Definite Domestic (TDD)
2018
2019
+ / – %
Q 4 2018
Q 4 2019
+ / – %
16,147
17,101
7,245
3,296
5,740
1,142
7,650
3,599
6,097
1,229
5.9
5.6
9.2
6.2
7.6
–1,276
–1,474
–15.5
1,957
12.1
3,073
2,039
11.9
3,291
4.2
–
7.1
4,423
1,972
913
1,585
300
–347
570
12.9
905
4,643
2,096
985
1,659
320
– 417
611
13.2
970
5.0
6.3
7.9
4.7
6.7
–20.2
7.2
–
7.2
2018
48.8
4.4
2019
51.0
4.8
+ / – %
Q 4 2018
Q 4 2019
+ / – %
4.5
9.1
53.2
4.9
55.1
5.2
3.6
6.1
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.
Express: volumes by product
Thousands of items per day
Time Definite International (TDI)
Time Definite Domestic (TDD)
2018
955
492
2019
1,009
531
+ / – %
Q 4 2018
Q 4 2019
+ / – %
5.7
7.9
1,044
546
1,100
588
5.4
7.7
International business shows stable growth
Revenue in the division improved by 5.9 % to €17,101 mil-
lion in the reporting year (previous year: €16,147 million).
This figure includes foreign currency gains of €281 million;
excluding these gains, the revenue increase was 4.2 %. The
revenue figure also reflects the fact that fuel surcharges
were higher in all regions compared with the previous year.
Excluding currency effects and fuel surcharges, revenue
was up by 3.5 %.
In the Time Definite International (TDI) product line,
revenues per day increased by 4.5 % and per-day shipment
volumes by 5.7 % in the reporting period. Fourth-quarter
revenues per day were up by 3.6 % and per-day shipment
volumes by 5.4 %.
In the Time Definite Domestic (TDD) product line, rev-
enues per day increased by 9.1 % and per-day shipment
volumes by 7.9 % in the reporting period. Fourth-quarter
growth amounted to 6.1 % for revenues per day and 7.7 %
for per-day volumes.
Sustained momentum in Europe region
Revenue in the Europe region increased by 5.6 % in the year
under review to €7,650 million (previous year: €7,245 mil-
lion). That figure includes foreign currency gains of €5 million.
Excluding currency effects, revenue increased by 5.5 %. In the
TDI product line, revenues per day rose by 4.8 % and per-day
TDI shipment volumes by 7.8 % in the reporting period. Inter-
national revenues per day for the fourth quarter were up by
4.6 % and per-day shipment volumes by 7.9 %.
Strong fourth-quarter volume growth in the
Americas region
Revenue in the Americas region increased by 9.2 % in the year
under review to €3,599 million (previous year: €3,296 mil-
lion). The revenue figure includes foreign currency gains
48
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
of €95 million. Revenue growth excluding currency effects
was 6.3 %. In the TDI product line, revenues per day were up
4.5 % in 2019 and per-day shipment volumes improved by
5.4 %. In the fourth quarter, revenues per day increased by
3.9 % and per-day shipment volumes were up a strong 8.7 %.
Business in the Asia Pacific region remains stable
Revenue in the Asia Pacific region increased by 6.2 % in
the year under review to €6,097 million (previous year:
€5,740 million). That figure includes foreign currency
gains of €140 million. Excluding currency effects, revenue
increased by 3.8 %. In the TDI product line, revenues per day
improved by 4.1 % and per-day volumes by 3.7 %. Growth in
the fourth quarter amounted to 2.3 % for revenues per day
and 2.4 % for per-day volumes.
Revenue increases in the MEA region
Revenue in the MEA region (Middle East and Africa) im-
proved by 7.6 % in the year under review to €1,229 million
(previous year: €1,142 million). The revenue figure includes
foreign currency gains of €35 million. Revenue growth ex-
cluding currency effects was 4.6 %. In the TDI product line,
revenues per day were up by 5.5 % and per-day volumes by
2.9 %. In the fourth quarter of 2019, international revenues
per day were up by 4.6 % and per-day shipment volumes
declined by 4.1 %.
Earnings improve at accelerated pace
Division EBIT was up 4.2 % in financial year 2019 to
€2,039 million (previous year: €1,957 million). Return on
sales was 11.9 % (previous year: 12.1 %). EBIT growth accel-
erated in the fourth quarter of 2019 with a rise to 7.2 % and
return on sales increased from 12.9 % to 13.2 %. Operating
cash flow amounted to €3,291 million in the year under re-
view (previous year: €3,073 million).
GLOBAL FORWARDING, FREIGHT DIVISION
Key figures, Global Forwarding, Freight
€ m
Revenue
of which Global Forwarding 1
Freight 1
Consolidation / Other
Profit from operating activities (EBIT)
Return on sales (%) 2
Operating cash flow
1 Prior-year figures adjusted due to reclassifications.
2 EBIT / revenue.
Global Forwarding: revenue
€ m
Air freight
Ocean freight
Other 1
Total 1
1 Prior-year figures adjusted due to reclassifications.
Global Forwarding: volumes
Thousands
Air freight
of which exports
Ocean freight
1 Twenty-foot equivalent units.
2018
14,978
10,668
4,453
–143
442
3.0
523
2019
15,128
10,680
4,565
–117
521
3.4
801
+ / – %
Q 4 2018
Q 4 2019
+ / – %
1.0
0.1
2.5
18.2
17.9
–
53.2
4,002
2,884
1,155
–37
161
4.0
286
3,854
2,724
1,160
–30
173
4.5
386
–3.7
– 5.5
0.4
18.9
7.5
–
35.0
2018
4,924
3,503
2,241
2019
4,772
3,604
2,304
10,668
10,680
+ / – %
Q 4 2018
Q 4 2019
+ / – %
–3.1
1,372
1,265
2.9
2.8
0.1
929
583
871
588
2,884
2,724
–7.8
– 6.2
0.9
– 5.5
tonnes
tonnes
TEU 1
2018
3,806
2,150
3,225
2019
3,626
2,051
3,207
+ / – %
Q 4 2018
Q 4 2019
+ / – %
– 4.7
– 4.6
– 0.6
1,000
571
824
969
552
795
–3.1
–3.3
–3.5
49
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Gross profit up on prior year
Revenue in the division increased by 1.0 % in the year under
review to €15,128 million (previous year: €14,978 million).
Excluding foreign currency gains of €125 million, revenue
remained at the prior year level. Fourth-quarter revenue
declined by 3.7 % to €3,854 million.
In the Global Forwarding business unit, revenue was
€10,680 million in the year under review and thus on a level
with the prior-year period (€10,668 million). Adjusted for
currency gains of €146 million, revenue declined by 1.3 %.
Gross profit was up 1.5 % to €2,524 million (previous year:
€2,487 million). Gross profit is defined as revenue from
transport or other services less directly attributable costs,
which include transport costs for air and ocean freight,
road and rail transport, expenses for commissions, insur-
ance and customs clearance, and other revenue-related
expenses.
Improved air freight margins and solid project business
Air freight volumes decreased by 4.7 % in the reporting year,
due mainly to declining market volumes on key trade lanes.
As a consequence, air freight revenues also declined, post-
ing a decrease of 3.1 %. Despite the volume decline, gross
profit from air freight increased slightly by 0.7 % thanks to
better margins. Air freight revenues for the fourth quarter
declined by 7.8 %. Air freight volumes were down 3.1 % in
the fourth quarter, and gross profit fell 6.7 %.
Ocean freight volumes for the year under review were
down 0.6 % year-on-year. Ocean freight revenues rose by
2.9 %, whilst gross profit declined by 3.0 %. In the fourth
quarter, ocean freight revenues decreased by 6.2 %. Gross
profit also fell below the prior-year level in the fourth quar-
ter, with a decrease of 5.2 % amidst volume declines of 3.5 %.
Our industrial project business (reported in the “Global
Forwarding: revenue” table as part of Other in the Global
Forwarding business unit) performed significantly better
than in the previous year. The share of revenue related to
industrial project business, which is reported under Other,
increased from 30.0 % in the prior year to 34.3 % in the year
under review. Gross profit for industrial projects improved
by 33.6 %.
Revenue increase in European overland transport
business
In the Freight business unit, revenue rose by 2.5 % to
€4,565 million in the year under review (previous year:
€4,453 million) despite negative currency effects of
€21 million. The 8.4 % volume growth was driven mainly
by B2C business in Sweden and less-than-truckload busi-
ness in the Czech Republic and Poland. The business unit’s
gross profit rose by 3.0 % to €1,150 million (previous year:
€1,117 million).
EBIT up sharply
Divisional EBIT increased significantly by 17.9 % in 2019,
rising from €442 million to €521 million. The increase was
due mainly to improvements in project business and cost
measures. Return on sales rose from 3.0 % to 3.4 %. EBIT for
the fourth quarter of 2019 improved from €161 million to
€173 million and return on sales rose to 4.5 %. Operating
cash flow amounted to €801 million in the year under re-
view (previous year: €523 million).
50
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC P OSITION
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
SUPPLY CHAIN DIVISION
Key figures, Supply Chain
€ m
Revenue
of which EMEA ( Europe, Middle East and Africa)
Americas
Asia Pacific
Consolidation / Other
Profit from operating activities (EBIT)
Return on sales (%) 1
Operating cash flow
1 EBIT / revenue.
Increased revenue despite sale of China business
Revenue in the division was up by 0.6 % to €13,436 million in
the reporting period (previous year: €13,350 million), due in
particular to the good business performance in the Americas
region. Currency gains additionally contributed €268 million
to revenue growth. This positive effect was offset by port-
folio changes, mainly comprising the sale of our Supply
Chain business in China in the first quarter. Excluding these
effects, revenue growth came to 1.5 % in the reporting period.
Fourth-quarter revenue decreased by 4.6 % to €3,571 million
(previous year: €3,743 million) The year-on-year decline was
due to higher income recognised in the prior year from the
sale of real estate.
In the Americas and Asia Pacific regions, volumes
grew in nearly all sectors after adjusting for the sale of
the Supply Chain business in China. In the EMEA region,
the Engineering & Manufacturing sector registered the
highest revenue growth.
Supply Chain: revenue by sector and region, 2019
Total revenue: €13,436 million
2018
2019
+ / – %
Q 4 2018
Q 4 2019
+ / – %
of which Retail
13,350
13,436
6,871
4,385
2,147
– 53
520
3.9
6,708
4,759
1,992
–23
912
6.8
1,322
1,330
0.6
–2.4
8.5
–7.2
56.6
75.4
–
0.6
3,743
1,824
1,352
578
–11
184
4.9
936
3,571
1,750
1,324
502
– 5
177
5.0
809
– 4.6
– 4.1
–2.1
–13.1
54.5
–3.8
–
–13.6
Consumer
Auto-mobility
Technology
Life Sciences & Healthcare
Engineering & Manufacturing
Others
of which Europe / Middle East / Africa / Consolidation
Americas
Asia Pacific
28 %
24 %
16 %
14 %
10 %
6 %
2 %
50 %
35 %
15 %
New business worth €1,212 million secured
In 2019, the division concluded additional contracts worth
€1,212 million in annualised revenue with both new and
existing customers. The Retail and Consumer sectors ac-
counted for the majority of the new business acquired, of
which 23% is attributable to e-fulfilment. The annualised
contract renewal rate remained at a consistently high level.
in 2019 thanks to growth in nearly all regions. Return on
sales was 6.8 % (previous year: 3.9 %). Operating cash flow
amounted to €1,330 million in the year under review (pre-
vious year: €1,322 million). EBIT for the fourth quarter of
2019 amounted to €177 million (previous year: €184 mil-
lion). Return on sales for the fourth quarter was 5.0 % (pre-
vious year: 4.9 %).
Solid business performance leads to earnings growth
EBIT in the division was €912 million in the year under re-
view (previous year: €520 million). Earnings were impacted
positively by net proceeds of €426 million from the sale of
the Chinese business in the first quarter. The rise in EBIT
was offset by non-recurring expenses of €151 million in
the reporting period. In the previous year, EBIT had been
impacted by non-recurring expenses of €50 million from
customer contracts and €42 million from pension obliga-
tions. Excluding these one-off effects, EBIT was up 4.1 %
51
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
REPORT ON ECONOMIC POSITION
DEUTSCHE POST AG (HGB)
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
ECOMMERCE SOLUTIONS DIVISION
Key figures, eCommerce Solutions
€ m
Revenue
of which Americas
Europe
Asia
Other / Consolidation
Profit / loss from operating activities (EBIT)
Return on sales (%) 1
Operating cash flow
1 EBIT / revenue.
Revenue increases despite portfolio streamlining
The eCommerce Solutions division generated revenue of
€4,045 million in the reporting period, a rise of 5.5 % on the
prior-year figure of €3,834 million. All regions contributed
to the increase, which was achieved despite the limited
portfolio streamlining measures taken. Revenue in the
Americas region rose by 8.4 % to €1.153 million (previous
year: €1.064 million). In the Europe region, revenue grew
by 4.1 % to €2,307 million (previous year: €2,216 million).
In the Asia region, revenue exceeded the prior-year fig-
ure by 4.6 % to reach €586 million in the reporting period.
Excluding foreign currency gains of €77 million, the to-
tal year-on-year revenue increase came to 3.5 % in the
reporting period. In the fourth quarter of 2019, division
revenue was up by 2.1 % to €1,087 million (previous year:
€1,065 million).
2018
3,834
1,064
2,216
560
– 6
–27
– 0.7
159
2019
4,045
1,153
2,307
586
–1
– 51
–1.3
161
+ / – %
Q 4 2018
Q 4 2019
+ / – %
5.5
8.4
4.1
4.6
83.3
– 88.9
–
1.3
1,065
1,087
304
608
155
–2
– 6
– 0.6
105
319
611
159
–2
–11
–1.0
33
2.1
4.9
0.5
2.6
0.0
– 83.3
–
– 68.6
EBIT declines due to restructuring expenses
Division EBIT declined to €–51 million in the reporting
period (previous year: €–27 million), due primarily to re-
structuring expenses in a net amount of €80 million. The
expenses were incurred for portfolio optimisation, over-
head reductions and loss allowances, amongst other things.
Return on sales therefore remained negative at –1.3 % (pre-
vious year: –0.7 %). Operating cash flow was up slightly on
the prior-period to reach €161 million. EBIT for the fourth
quarter of 2019 was €–11 million (previous year: €–6 mil-
lion). Return on sales amounted to –1.0 % in the fourth quar-
ter (previous year: –0.6 %).
DEUTSCHE POST AG
(HGB)
Deutsche Post AG as parent company
In addition to the reporting on the Group, the performance
of Deutsche Post AG is outlined below.
As the parent company of Deutsche Post DHL Group,
Deutsche Post AG prepares its annual financial statements
in accordance with the principles of the Handelsgesetzbuch
(HGB – German Commercial Code) and the Aktiengesetz
(AktG – German Stock Corporation Act). The HGB financial
statements are relevant for calculating the dividend.
There are no separate performance indicators relevant
for management purposes that are applicable to the parent
company Deutsche Post AG as a legal entity. For this reason,
the explanations presented for Deutsche Post DHL Group
are also applicable to Deutsche Post AG. In financial year
2019, 46 DHL Delivery regional companies were merged
with Deutsche Post AG, thus transferring parcel delivery
activities back to Deutsche Post AG.
Opportunities and risks
Since Deutsche Post AG is interconnected, to a large degree,
with the companies of Deutsche Post DHL Group through
arrangements including financing and guarantee commit-
ments and direct and indirect investments in its investees,
Deutsche Post AG’s opportunities and risks align closely
with those of the Group,
Opportunities and risks, page 63 ff.
The Post & Parcel Germany division essentially consti-
tutes Deutsche Post AG’s core business. The Group’s DHL
52
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
DEUTSCHE POST AG (HGB)
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
divisions have an indirect influence on Deutsche Post AG
through net investment income.
Income statement for Deutsche Post AG (HGB)
1 January to 31 December
Employees
The number of full-time equivalents at Deutsche Post AG
at the reporting date was 156,989 (previous year: 145,628).
The key driver of this increase were the merger of the DHL
Delivery regional companies with Deutsche Post AG and
the subsequent absorption of their employees in 2019.
Results of operations
Revenue grew by a total of €604 million (4.2 %) year-on-
year, which was mainly due to higher revenue in the Par-
cel business unit. In the Post business unit, revenue was
€9,010 million in the reporting year, 1.6 % below the pri-
or-year figure of €9,160 million. €5,173 million (previous
year: €5,153 million) of this revenue was attributable to Mail
Communication, €2,013 million (previous year: €2,087 mil-
lion) to Dialogue Marketing and €1,824 million (previous
year: €1,920 million) to other services. The postage increase
effective as of 1 July 2019 influenced the development of
Mail Communication. Revenue in our Parcel business unit
was €4,913 million in the reporting period, an increase of
16.6 % on the prior-year figure of €4,213 million. Factors
here were an increase in volumes as well as the merger of
the DHL Delivery regional companies with Deutsche Post AG.
€ m
Revenue
Other own work capitalised
Other operating income
Materials expense
Staff costs
Amortisation of intangible assets and
depreciation of property, plant and
equipment
Other operating expenses
Financial result
Taxes on income
2018
2019
14,353
14,957
47
562
32
625
14,962
15,614
– 4,897
– 8,046
– 4,949
– 8,374
–274
–310
–1,631
–1,861
–14,848
–15,494
1,000
2,215
–155
– 85
Result after tax / Net profit for the period
959
2,250
Retained profits brought forwards from
previous year
Net retained profit
4,694
4,234
5,653
6,484
The increase in other operating expenses by €230 mil-
lion stemmed mainly from higher service level agreements
(€61 million) and higher currency translation expenses
(€52 million).
The financial result in the amount of €2,215 million
(previous year: €1,000 million) comprises net investment
income of €2,581 million and net interest expense of
€–366 million. The change in the financial result is mainly
due to the €746 million increase in income from profit
transfer agreements attributable to Deutsche Post Beteili-
gungen Holding GmbH and the improvement in net interest
expense by €413 million, which was due largely to higher
income from cover assets.
After deducting taxes on income of €85 million (pre-
vious year: €155 million), net profit for the period totalled
€2,250 million (previous year: €959 million). Including
retained profits brought forwards, net retained profit for
the period amounted to €6,484 million (previous year:
€5,653 million).
Net assets and financial position
Other operating income increased by €63 million, or 11.2 %,
year-on-year.
The materials expense item rose by €52 million, mainly
on account of an increase in the cost of purchased services
for transport services for letters and parcels. Staff costs
increased by €328 million year-on-year. This was due to
the merger of the DHL Delivery regional companies with
Deutsche Post AG retroactively to 1 January 2019 and the
subsequent absorption of their employees.
Depreciation rose by €36 million, attributable chiefly
to technical equipment and machinery.
Total assets up
Total assets rose to €38,315 million at the balance sheet
date (previous year: €36,864 million).
Non-current assets increased from €18,839 million
to €19,169 million, with investments in property, plant and
equipment totalling €384 million (previous year €479 mil-
lion) and relating primarily to land and buildings (€100 mil-
lion); other equipment, operating and office equipment
(€94 million) as well as advance payments and assets under
development (€134 million). In addition to investments in
mail and parcel centres and conveyor and sorting systems,
53
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
DEUTSCHE POST AG (HGB)
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Expected developments
Deutsche Post AG is included fully in the Group’s interna-
tional strategy and associated performance forecast. The
Expected developments, page 61 ff., section also includes
the expected developments for the parent company. The
Post & Parcel Germany Division reflects Deutsche Post AG’s
core business in material respects. The DHL divisions have
an indirect influence on Deutsche Post AG through net
investment income from profit transfer agreements. As
a result, the subsidiaries’ future operating results also in-
fluence the future results of Deutsche Post AG. The HGB
financial statements are relevant for calculating the div-
idend. For financial year 2020, we anticipate a result for
Deutsche Post AG that will enable a dividend payment com-
patible with our financial strategy.
other capital expenditure related to the electric vehicle
fleet. Due to higher loans to affiliated companies, non-cur-
rent financial assets rose by €250 million.
Balance sheet Deutsche Post AG (HGB)
as at 31 December
€ m
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Non-current financial assets
Current assets
Inventories
Receivables and other assets
Securities
Cash and cash equivalents
Prepaid expenses
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Subscribed capital
Treasury shares
Issued capital
(Contingent capital: €158 million)
Capital reserves
Revenue reserves
Net retained profit
Provisions
Liabilities
Deferred income
2018
2019
201
3,106
15,532
18,839
178
3,209
15,782
19,169
64
66
15,307
17,471
807
1,601
8
1,315
17,779
18,860
246
286
36,864
38,315
1,237
– 4
1,233
4,612
4,395
5,653
15,893
5,138
15,776
57
1,237
–1
1,236
4,618
4,457
6,484
16,795
4,889
16,568
63
TOTAL EQUITY AND LIABILITIES
36,864
38,315
Current assets grew by €1,081 million, which was
largely due to an increase in receivables from affiliated
companies of €1,847 million and a decrease in securities of
€799 million.
Equity was up €15,893 million in the previous year to
€16,795 million. The distribution to shareholders totalling
€1,419 million from the prior-year profit was more than
offset by the net profit for 2019 of €2,250 million. The in-
crease in the capital reserves by €6 million and revenue
reserves by €62 million is attributable to the commitment
and settlement of shares for executive remuneration plans.
In total, the equity ratio increased slightly from 43.1 % in the
previous year to 43.8 % in the reporting period.
Provisions decreased by €249 million year-on-year.
Provisions for pensions and similar obligations increased
by €100 million. In contrast, provisions for taxes (€202 mil-
lion) and other provisions (€147 million) were lower.
Liabilities increased by €792 million to €16,568 mil-
lion. The increase in liabilities to affiliated companies in the
amount of €657 million stood in contrast to lower amounts
due to banks (€200 million). The increase in other liabilities
of €272 million resulted mainly from the implementation
of early retirement programmes.
Decrease in cash funds
Deutsche Post AG’s cash funds declined by €286 million to
€1,315 million in financial year 2019.
Debt
Deutsche Post AG’s debt (provisions and liabilities) rose by
€543 million to €21,457 million compared with the previ-
ous year. The increase is chiefly due to higher liabilities to af-
filiated companies (€657 million) in financial year 2019 and
results from Group cash management (in-house banking).
54
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
NON-FINANCIAL
KEY PERFORMANCE
INDICATORS
Employees, customers and investors look increasingly to
sustainability aspects such as climate change and envir-
onmental protection, social responsibility and corporate
governance when deciding in favour of Deutsche Post DHL
Group. The key performance indicators in these areas are
presented below. Additional information is provided in the
Sustainability Report, dpdhl.com/2019sustainabilityreport,
which also includes the separate non-financial report.
Employees
Facing changes in the professional world
Digital transformation in the professional world is chang-
ing job descriptions as well as creating new fields of activ-
ity. We ensure that our employees are optimally prepared
for new opportunities and changing requirements in their
working environment and involve them in the process of
change. This places particular demands on our managers,
who follow defined leadership principles to give them the
necessary foundation for creating a motivating working en-
vironment that fosters open communication and in which
employees feel valued.
Selected results from the Employee Opinion Survey
Our annual Group-wide Employee Opinion Survey com-
prises 41 questions grouped into ten key performance in-
dicators and one index. In the year under review, the results
achieved were the same as or better than in the previous
year in each survey category. The results also surpassed
external benchmarks in nearly all cases. Our “Active Lead-
ership” KPI exceeded the target for 2019 with a score of
78 %,
Forecast / actual comparison, page 34. The participation
rate of 77 % again clearly demonstrated the survey’s high
level of acceptance.
Selected results from the Employee Opinion Survey
%
Response rate
Positive rating for Active Leadership KPI
Positive rating for Employee Engagement
KPI
2018
2019
76
76
76
77
78
77
Number of employees stays stable
As at 31 December 2019, we employed 499,250 full-time
equivalents, or approximately the same as in the previous
year. The headcount was 546,924 at the end of the year.
Female employees made up 34.4 % of our global workforce,
with 22.2 % of all upper and mid-level management posi-
tions being held by women in 2019 (previous year: 22.1 %).
The opportunity for part-time employment was taken
by 17 % of all employees (previous year: 18 %). 9.0 % of em-
ployees left the Group at their own request over the course
of 2019 (previous year: 9.2 %).
In the Post & Parcel Germany division, the number of
employees declined in the reporting year due, in particular,
to special effects such as the early retirement programme
and productivity improvements, despite continued strong
growth in parcel volumes and the creation of a number
of new positions. In the Express division, the number of
employees increased compared with the previous year
due to higher shipment volumes. Thus most of the new
hires were in operations. The headcount in the Global For-
warding, Freight division was nearly unchanged from the
previous year. In the Supply Chain division, the number
of employees grew because of additional business with
both new and existing clients, despite the sale of our sup-
ply chain business in China. In the eCommerce Solutions
division, the headcount decreased in all regions, mainly
due to portfolio streamlining.
The number of employees rose in the Americas and the
Other regions. Germany is still the region with the largest
number of employees.
We offer our employees in Germany and certain neigh-
bouring countries the opportunity to enrol in dual-study
apprenticeship programmes consisting of in-house training
combined with programmes at state vocational schools. In
2019, we offered approximately 2,000 positions in these
apprenticeship and study programmes.
Our current planning foresees a slight increase in the
number of employees in financial year 2020.
Employees in 2019
Year-end headcount, including trainees.
546,924
2018
547,459
Change
– 0.1 %
55
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Number of employees
2018
2019
+ / – %
Full-time equivalents
At year-end 1
499,018
499,250
of which Post & Parcel Germany 2
160,354
158,713
Express
95,717
98,203
0.0
–1.0
2.6
Global Forwarding,
Freight
42,783
42,712
– 0.2
Supply Chain
155,954
156,836
0.6
eCommerce Solutions 2
Corporate Functions
31,883
12,327
30,335
– 4.9
12,451
1.0
of which Germany
187,103
185,795
– 0.7
Europe
(excluding Germany)
Americas
Asia Pacific
Other regions
118,745
117,748
– 0.8
90,648
83,561
18,961
94,696
80,135
20,876
4.5
– 4.1
10.1
2.0
Average for the year 3
489,571
499,461
Headcount
At year-end 3
547,459
546,924
– 0.1
Average for the year
534,370
544,282
1.9
of which hourly workers and
salaried employees
Civil servants
Trainees
499,943
512,325
28,718
26,296
5,709
5,661
2.5
– 8.4
– 0.8
1 Excluding trainees. 2 Prior-period amounts adjusted due to new segment
note 9 to the consolidated financial statements. 3 Including
structure,
trainees.
Performance-based and market-based pay
At €21,610 million, staff costs exceeded the prior-year fig-
ure of €20,825 million. Details can be found in
note 14 to
the consolidated financial statements.
We foster employee loyalty and motivation by offer-
ing performance-based pay in line with market standards,
supplemented by contributions to defined benefit and de-
fined contribution pension plans, amongst other benefits.
The collective agreement concluded in 2018 gave
those Deutsche Post AG employees who are covered by the
agreement the opportunity to choose between a pay rise
and additional time off (for the first time in October 2018
and again in October 2019). As at 31 December 2019, 16.9 %
of our covered employees had selected the option to take
more time off, giving them up to 13 additional days off per
year.
Further details on remuneration components can
Sustainability Report, dpdhl.com/2019
be found in our
sustainability report.
Responding to demographic change
We have concluded a Generations Pact with the trade un-
ions in response to demographic change in Germany and
for the purpose of ensuring an ageing-friendly workplace.
Effective as of 1 March 2019, the conditions for partial re-
tirement as set forth in the Pact were improved significantly.
The Generations Pact enables employees to reduce their
working hours from the age of 55 onward. A total of 28,444
of our non-civil servant employees maintain a working time
account in line with this proven model and 4,929 are al-
ready in partial retirement. Since 2016, we have also been
offering comparable arrangements for civil servants, 4,172
of whom have established a lifetime working account and
1,322 of whom have entered partial retirement.
An early retirement programme initiated in the pre-
vious year and aimed chiefly at civil servants in overhead
areas in the Post & Parcel Germany division was contin-
ued during the year under review. The main requirement
for taking part in the engaged retirement programme is
that the civil servant be working in an area with a surplus
of personnel and that there is no option for employment
elsewhere in the company or in federal administrative or-
ganisations. Moreover, there may be no operational or busi-
ness-related objections to placement in the programme.
The civil servant must also commit to performing volunteer
work within the first three years of commencing retirement.
Safety and health
Strengthening a safety-first culture
In the area of safety and health, our focus lies on system-
atic prevention. That’s why one of the goals of our Strategy
2025 is to reinforce a safety-first culture throughout the
Group. The requirements for a safety-first culture are de-
scribed in detail in our Occupational Health & Safety Policy
Statement.
Workplace accidents
Accident rate (number of accidents per
200,000 hours worked)
Working days lost per accident
Number of fatalities due to workplace
accidents
of which as a result of traffic accidents
2018
2019
4.3
15.8
8
3
4.2
16.5
3
1
Most accidents occur in connection with pick-up and deliv-
ery. In the year under review, the Group’s accident rate fell
slightly. We report on our occupational safety initiatives and
targets and present the accident data for the divisions and
Sustainability Report, dpdhl.com/
regions in more detail in our
2019sustainabilityreport.
56
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Bolstering health
We foster our employees’ awareness of a healthy lifestyle
through health-related projects and local initiatives. Dur-
ing the reporting period, stress management and dealing
with mental health issues were again topics of focus. Our
Group-wide employee benefits programme also enables
employees outside of Germany to enjoy primary or supple-
mentary health insurance benefits. The Group’s worldwide
illness rate was 5.3 % in 2019, or approximately the same as
in the prior year. We report in detail on the illness rates in
Sustainability Report, dpdhl.
our divisions and regions in our
com/2019sustainabilityreport.
Sustainability
Commitment to shared values
We conduct our business in accordance with applicable laws,
ethical principles and ecological standards, and international
guidelines. Through ongoing dialogue with our stakeholders,
we ensure that their expectations as regards social and en-
vironmental issues are accounted for appropriately and that
our business is aligned systematically with those interests.
We use our expertise as a mail and logistics services
group for the benefit of society and the environment. For
example, we provide logistical support following natural
disasters, prepare airports for such scenarios, help to im-
prove career opportunities for young people and support
our employees’ local projects.
Our initiatives to increase CO2 efficiency and our envir-
onmentally friendly product range enable us to uphold our
responsibility for the environment whilst strengthening our
own market position. In the year under review, we focussed
on further increasing the share of electric vehicles in our
fleet in Germany and in our non-German fleet.
CO2e emissions, 2019
Total: 28.95 million tonnes 1
21 %
Ground
transport
65 %Air transport
12 %
Ocean transport
2 %
Buildings
1 Scope 1 to 3 (previous year, adjusted: 29.46 million tonnes)
Efficiency target exceeded
We use a carbon efficiency index (CEX) to measure and
manage our greenhouse gas efficiency,
Management,
page 16. In 2019, our direct (Scope 1) and indirect (Scope 2)
greenhouse gas emissions amounted to 6.59 million
tonnes of CO2e (previous year: 6.57 million tonnes of
CO2e). The indirect greenhouse gas emissions (Scope 3) of
our transport subcontractors came to 22.36 million tonnes
of CO2e (previous year, adjusted: 22.89 million tonnes
of CO2e).
Amongst other things, we have set ourselves the en-
vironmental target of improving our CEX score by 50 %
with respect to the 2007 base year by 2025. In 2019, we
succeeded in improving CEX by two index points to 35 %,
Forecast / actual comparison, page 34. This development was
achieved primarily through improvements in the Global
Forwarding, Freight division’s ocean freight business and
road transport, and the Supply Chain division’s road trans-
port. Using green electricity at the sites of the Express and
Supply Chain divisions also contributed to the result. De-
tailed information on our carbon efficiency trend and on
our environmental activities and targets is included in our
Sustainability Report, dpdhl.com / 2019sustainabilityreport.
Energy consumption in company fleet and
company buildings
Million kWh
Consumption by fleet
Air transport (jet fuel)
Road transport (petrol, biodiesel,
diesel, bio-ethanol, LPG)
Road transport (biogas, CNG, LNG)
Consumption for buildings and facilities
(including electric vehicles)
2018
2019
18,598
19,032
4,592
53
4,442
45
3,194
3,139
57
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Quality
Delivering mail and parcels quickly and reliably
According to surveys conducted by Quotas, a quality re-
search institute, around 92 % of all domestic letters posted
in Germany during daily opening hours at our retail outlets
or before final collection were delivered to their recipients
the very next day in 2019. Around 99 % reached their recip-
ients within two days. This puts us well above the legally
required levels of 80 % (D+1) and 95 % (D+2). The Quotas
measurement system is audited and certified each year by
TÜV. For international letters, transit times are calculated by
the International Post Corporation. We are part of a group of
leading postal enterprises working to improve transit times
across postal networks.
Around
92 % D + 1
of all domestic letters within Germany
are delivered the very next day.
In the parcel business, around 83 % of all items reached
their recipients the next working day in the year under re-
view. This figure reflects parcels collected from business
customers that were delivered on the following day. Our
internal system for measuring parcel transit times has been
certified by TÜV since 2008.
In the interest of enhancing customer service given
the steady rise in parcel numbers, we invest continuously
in improving the performance of our parcel network to
ensure the continued reliability of our delivery services.
For ex ample, we successfully commissioned our 36th
parcel centre on the grounds of the former Opel factory in
Bochum during the reporting period. Once the parcel cen-
tre reaches full operating capacity, it will be able to process
up to 50,000 parcels per hour. Another new parcel centre
is being built in Ludwigsfelde on the outskirts of Berlin and
go into operation in 2021.
Our approximately 26,000 sales points were open for
an average of 55 hours per week in the year under review
(previous year: 54 hours). The annual survey conducted by
Kundenmonitor Deutschland, the largest consumer survey
in Germany, showed a high acceptance level for our exclu-
sively partner-operated retail outlets: 94.5 % of customers
were satisfied with our quality and service (previous year:
94.3 %). In addition, impartial mystery shoppers from Kantar
TNS (formerly TNS Infratest) tested the postal outlets in re-
tail stores approximately 24,000 times over the year. The
result showed that 94.2 % of customers were served within
three minutes (previous year: 93.5 %).
94.5 %
satisfied customers according to
Kundenmonitor Deutschland.
Our environmental performance is another key quality
indicator for us, as described in our
Sustainability Report,
dpdhl.com/2019sustainabilityreport. In terms of electromobil-
ity – an area of strategic importance for us – we put around
2,500 e-vehicles and nearly 1,500 of the e-bikes into op-
eration in the reporting period.
Around
2,500
e-vehicles
put into operation 2019.
Express business: service quality and an insanely
customer centric culture
As a global network operator working with standardised
processes, we are constantly optimising our services to
enable us to keep our commitments to customers. We
therefore keep an eye on our customers’ ever-chang-
ing requirements, for example through our Insanely
Customer Centric Culture programme and as part of
implementing the Net Promoter approach. Our manag-
ers speak personally to customers in order to translate
customer criticism into continuous improvements. The
MyDHL+ portal and the Small Business Solutions sec-
tion on our website are especially useful for small and
medium-sized business customers, providing them with
comprehensive shipping information and enabling them
to ship their goods with ease.
Our European Key Account Support service provides
our international customers in Europe with a central point
of contact. Upon request, shipment information can even
be updated directly in their systems.
At our quality control centres, we track shipments
across the globe and adjust our processes dynamically as
needed. All premium products are tracked by default until
they are delivered.
Our On Demand Delivery service has been available
in more than 110 countries and 46 languages since the
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Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
reporting period. We also expanded our Paketbox network
to around 13,000 Service Point Lockers worldwide.
We conduct regular reviews of operational safety,
compliance with standards and service quality at our fa-
cilities in co-operation with government authorities. Ap-
proximately 360 locations, more than 100 of which are
in Asia, have been certified by the security organisation
Transported Asset Protection Association (TAPA). This
makes us a leader in this area. Since 2010, we have been
certified according to the ISO 9001:2008 global standard.
In 2018, we succeeded in achieving certification accord-
ing to the current ISO 9001:2015 standard. In addition, we
have maintained our certification in specific regions and
countries in the areas of environmental protection and
Sustainability
energy management, as described in our
Report, dpdhl.com/ 2019sustainabilityreport.
Approximately
360
locations certified by the Transported Asset
Protection Association (TAPA).
Systematic customer feedback in the
forwarding business
We continuously improve our performance in the Global
Forwarding business unit based upon customer feedback,
which we record systematically in the form of a Net Pro-
moter approach. Some 40 continuous improvement pro-
jects and more than 1,700 problem-solving workshops
were implemented in the reporting period. Customers
benefitted from notable improvements in workflows, punc-
tuality, reporting and invoicing as a result. We also monitor
operating performance on an ongoing basis and make any
necessary adjustments through regularly occurring initia-
tives such as performance dialogues.
In the Freight business unit, we again sought feedback
from our customers in more than thirty countries in 2019.
Based upon the information received, we defined more
than 200 initiatives aimed at steadily improving our prod-
ucts and services. Our freight quotation tool and our online
customer portal have made us more available to customers.
We also made additional improvements to end-to-end ser-
vice quality throughout our network.
Quality leader in contract logistics
We continuously build upon our position as a quality leader
in contract logistics. Our Operations Management System
First Choice assists us in this by ensuring that we either
meet or exceed our customers’ quality expectations. As part
of our operations excellence programme, a service quality
KPI routinely measures how well our locations meet de-
fined operating standards.
The survey methodology we use to continuously meas-
ure customer loyalty and satisfaction is based upon the Net
Promoter approach. The programme was rolled out glob-
ally and encompasses a significant part of our business.
In the year under review, the scores measured improved
substantially. In fact, the follow-up survey conducted with
each individual customer proved to have a huge impact on
satisfaction and loyalty.
In addition, we increasingly offer our customers sus-
tainable solutions. One example of this is warehouse man-
agement on a renewable energy basis.
We continuously build
upon our position as a
quality leader
in contract logistics.
eCommerce Solutions division: satisfied customers
and high level of delivery reliability
For us, customer satisfaction in the B2B and B2C sectors is
the most important indicator of success in the markets in
which we operate. In 2019, we succeeded in significantly
increasing delivery reliability in most of the countries in
which we have operations, such as the United States and
India, and the Asia Pacific region. We were also able to pro-
vide and further boost the quality levels we promise our
major customers in Europe. Our customer satisfaction rate
for cross-border services in this region is 95 %.
In the United States, our commitment to quality and
reliability won us new, high-end clients. We are certain that,
even in a challenging economic environment, our high level
of delivery reliability (over 97 % in the reporting period) will
continue to provide excellent opportunities for growth in
the future.
Despite challenging geographical features and a
sometimes difficult infrastructure situation, we were able
to improve delivery reliability in India by around 10 %. Our
overall delivery reliability in the Asia-Pacific region was
96 % to 98 % in 2019.
We work continuously to maintain our quality at a very
high level and to achieve outstanding customer satisfaction
ratings. In this way, we are fulfilling our aspiration of being
the quality leader in all of our markets.
59
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Brands
Brand architecture
Group
Divisions
Post & Parcel Germany
Express
Global Forwarding,
Freight
Supply Chain
eCommerce Solutions
Brands
Value of Group brands remains stable
According to independent studies, the value of the
Deutsche Post and DHL brands has remained relatively
stable for years.
The DHL brand was valued at US$16.6 billion in the
reporting year by the market research institute Kantar
Millward Brown (previous year: US$20.6 billion). This is
approximately the same as the average level for the past
five years. The annual Interbrand rankings put the DHL
brand at around US$6 billion, up from around US$5.9 billion
in the prior year.
For the Deutsche Post brand, the consulting company
Brand Finance calculated a value of €4.5 billion in 2019
(previous year: €3.6 billion). The Deutsche Post brand thus
moved up to 20th place amongst the strongest German
brands. The DHL brand was valued at €9.6 billion, putting
it at No. 12 on the list.
50 years of DHL
The year 2019 was an anniversary for DHL, in which we
could already look back upon half a century of successful
DHL brand history. The commemorative activities included
participating in Bryan Adams’ 2019 “Shine A Light” world
tour as the official logistics partner.
Marketing expenditures, 2019
Volume: around €371 million
Product development and communication
Other
Public & customer relations
Corporate wear
Digital brand management
Our new Brand Hub went live in 2019. The digital brand de-
sign platform enables efficient brand management across
all regions, and the standardised interface helps employees
save time and create on-brand designs. In response to our
customers’ wishes, we have adapted our brand design to
the digital environment and given higher priority to emo-
tional branding aspects.
50.4 %
28.5 %
14.8 %
6.3 %
60
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
EXPECTED DEVELOPMENTS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
EXPECTED
DEVELOPMENTS
Overall assessment
We expect consolidated EBIT to reach more than €5.0 billion
in financial year 2020. The Post & Parcel Germany div ision
is expected to contribute more than €1.6 billion to Group
EBIT. For the DHL divisions, we expect total EBIT to come to
more than €3.7 billion. Corporate Functions is anticipated
to contribute approximately €–0.35 billion to earnings. As
from 28 February 2020 our earnings forecast excludes any
effect induced by the as yet not fully quantifiable impact of
the corona virus on the Group and upon expenses arising
from the decision to convert StreetScooter into an operator
of the existing fleet. In line with the projected growth in
EBIT, we expect that EAC will also increase in 2020. Free
cash flow is expected to amount to around €1.4 billion,
including the StreetScooter realignment and a payment of
around €500 million for the renewal of the intercontinental
Express fleet.
Forecast period
The information contained in the report on expected devel-
opments generally refers to financial year 2020.
Future economic parameters
Global economy feeling the effects of the coronavirus
The performance of the global economy this year will be
heavily impacted by the effects of the coronavirus.
In its economic forecast dated 2 March 2020, the
Organisation for Economic Co-operation and Development
(OECD) expects global expansion to amount to only 2.4 %
in a best-case scenario. A broader spread of the disease
in the Asia Pacific region and the industrialised countries
would have an even more pronounced effect on the global
economy, according to the OECD.
German parcel market expected to see sustained growth
The German market for paper-based mail communication
will continue to register moderate declines as digital com-
munication increases.
German advertising market volumes are likely to re-
main stable in 2020. Advertising budgets will continue to
shift towards online media. The trend towards automated
dialogue marketing campaigns is set to remain unchanged.
In the international mail business, increases in mer-
chandise shipments are expected to largely compensate for
declining volumes of small-format documents.
The German parcel market will continue to grow.
Highly cyclical international express market
Experience shows that growth in the international express
market, particularly in the B2B segment, is highly depend-
ent upon the economic situation. We believe that the stead-
ily growing cross-border e-commerce sector will continue
to drive growth in the international express market in 2020.
Air and ocean freight business dependent upon
normalisation of freight flows
Growth rates, particularly in the core air and ocean freight
business, are greatly dependent upon when and how rap-
idly the international transport of goods returns to normal.
We are anticipating lower volume growth in most
European road transport markets in 2020. Prices are likely
to increase moderately.
Contract logistics market continues to grow
The trend towards outsourcing warehousing and distribu-
tion is set to continue, as is demand for value-added logistics
services. The growing demand for e-fulfilment solutions is
expected to persist, with our customers being confronted
with high order volatility throughout the year.
Projections indicate that the market for contract logis-
tics will continue to experience steady growth of around 4 %
over the next five years.
Good growth prospects for eCommerce Solutions
Our eCommerce Solutions division is heavily dependent
on local economic trends. We are confident our product
portfolio and our focus upon quality and customer-centric
solutions will lead to good growth rates overall, including
in 2020.
61
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
EXPECTED DEVELOPMENTS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Earnings forecast
Since the Chinese government introduced measures to con-
tain the coronavirus, we have been consistently monitoring
the volume development in our networks. In recent weeks,
trade volumes have weakened, not only on the inbound
and outbound China trade lanes but also in other regions
in Asia and Europe; constraints on industrial production are
expected to increase also outside of China.
The Group had seen a very good start into 2020 in Jan-
uary and was prepared for the usual effects around Chinese
New Year in February when the measures of the Chinese
government were introduced. Since then the business de-
velopment in the Post & Parcel Germany, Supply Chain and
eCommerce Solutions divisions has only been impacted
marginally by the corona crisis. In contrast, we currently
see more significant effects for the Global Forwarding
business unit and the Express division, where the business
is particularly affected with regards to cross-border trade
flows into and out of China. Group-wide the negative im-
pacts of the corona crisis on Group EBIT amount to around
€60 million to €70 million for February, compared with the
initial internal planning.
Implications for Deutsche Post DHL Group’s results for
full year 2020 will ultimately depend upon a series of fac-
tors, which in the phase of recovering production volumes
could also have an offsetting positive effect. It currently
cannot be concretely assessed, over which time horizon, in
which divisions and to what extent, there will be negative
effects, and how far these can be balanced by offsetting
positive effects.
In case of a longer duration or a worsening of the cur-
rent situation over several months, the negative effects for
the Group are likely to outweigh the positives. The actual
impact on earnings can only be determined after the situ-
ation has normalised.
Also against the background of the global economic
uncertainties the Group decided to not further actively
pursue the current exploratory talks regarding partnership
options for the StreetScooter activities.
The conversion of StreetScooter into an operator of the
current fleet is expected to result in a one-off expense of
€300 million to €400 million outside of the company’s core
business for the current financial year. The impact on cash
flow, however, will be limited.
The Board of Management is expecting consolidated
EBIT to reach more than €5.0 billion in financial year
2020. The Post & Parcel Germany division is expected to
contribute more than €1.6 billion to Group EBIT. For the
DHL div isions, we expect total EBIT to come to more than
€3.7 billion. Corporate Functions is anticipated to contribute
approximately €–0.35 billion to earnings. As from 28 Feb-
ruary 2020, our earnings forecast excludes any effect
induced by the as yet not fully quantifiable impact of the
coronavirus and upon the aforementioned expenses arising
from the StreetScooter decision.
Our finance strategy continues to call for a dividend
payout of 40 % to 60 % of net profit as a general rule. As part
of that strategy, we have the option of adjusting reported
net income for non-recurring items in the interests of div-
idend continuity where appropriate. We have also made
the corresponding adjustment for financial year 2019 and
intend to propose a dividend payout of €1.25 per share
(previous year: €1.15 per share) to the shareholders at the
Annual General Meeting to be held on 13 May 2020. The
payout ratio in relation to adjusted net profit is thus 59.4 %.
Expected financial position
No change in the Group’s credit rating
In light of the earnings forecast for 2020, we expect our
“FFO to debt” performance indicator to remain stable on
the whole and do not expect the rating agencies to change
our credit rating from the present level.
Liquidity to remain solid
We anticipate a reduction in our cash position in the first half
of 2020 as a result of the annual pension-related prepayment
due to the Bundesanstalt für Post und Telekommunikation
(German federal post and telecommunications agency)
as well as the dividend payment for financial year 2019 in
May 2020. In addition, the payments not covered by bor-
rowed funds to renew the intercontinental Express aircraft
fleet will reduce liquidity. Our operating liquidity situation
will improve again towards the end of the year due to the
customary upturn in business in the second half of the year.
Capital expenditure of around €2.6 billion expected
In 2020, we plan to increase capital expenditure (excluding
leases) to around €2.6 billion in support of our strategic
objectives and further growth. The focus of capital expend-
iture will be similar to that of previous years. In addition,
around €500 million will be spent on the renewal of the
intercontinental Express fleet. This figure includes the as
yet unquantifiable effects of the coronavirus and the rea-
lignment of StreetScooter.
62
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
EXPECTED DEVELOPMENTS
OPPORTUNITIES AND RISKS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Additional management indicators
Increase in EAC and free cash flow
In line with the projected growth in EBIT, we expect that EAC
will also increase in 2020. EAC for the divisions is affected
by the same factors that are described in the outlook for
EBIT. However, our ongoing investing activities could result
in EAC growth falling slightly short of EBIT growth. Free
cash flow is expected to amount to around €1.4 billion, in-
cluding a payment of around €500 million for the renewal of
the intercontinental Express fleet. This figure also excludes
the as yet unquantifiable effects of the corona virus but does
reflect the realignment of StreetScooter.
Focus shifts towards employee engagement
Part of developing our Strategy 2025 involves evaluating
our concepts, in the context of which we determined that it
is no longer expedient to focus upon just one aspect of the
employee survey as a performance indicator. Instead, from
2020 onwards we will introduce employee engagement as
a performance indictor and include it in calculating execu-
tive bonuses. Our goal is to reach a level of 80 % approval
across the Group by 2025. In 2020, the approval rate is ex-
pected to be 78 %.
Further improving greenhouse gas efficiency
We expect the Group to continue improving its carbon foot-
print. Our CEX score is projected to increase by one index
point during financial year 2020.
OPPORTUNITIES
AND RISKS
Overall assessment
Identifying and swiftly capitalising upon opportunities and
counteracting risks are important objectives for our Group.
We already account for the anticipated impact of potential
events and developments in our business planning. Oppor-
tunities and risks are defined as potential deviations from
projected earnings. The current business planning has not
identified any significant changes in the Group’s overall op-
portunity and risk situation compared with last year’s risk
report. No new risks with a potentially critical impact upon
the Group’s result have been identified according to current
assessments. Based upon 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 fore-
cast 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
stable to positive outlook projected for the Group is more-
over reflected in our
credit rating, page 41 f.
Opportunity and risk management
Uniform reporting standards for opportunity and risk
management
As an internationally operating logistics company, we are
facing numerous changes. Our aim is to identify the re-
sulting 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 op-
portunity and risk management 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.
The simulation is a stochastic model that takes the
probability of occurrence of the underlying risks and op-
portunities into consideration and is based upon the law of
large numbers. One million randomly selected scenarios –
one for each opportunity and risk – are combined on the
basis of the distribution functions for each individual op-
portunity and risk. The resulting totals are shown in a graph
of frequency of occurrence. The following graph shows an
example of such a simulation:
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Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
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OPPORTUNITIES AND RISKS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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
Example 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
Most common value in one million simulation steps (“mode”)
“Worse than expected”
“Better than expected”
The most important steps in our opportunity and risk man-
agement process are:
1
Identify and assess: Managers in all divisions and
regions evaluate the opportunity and risk situation
on a quarterly basis and document the actions taken.
They use scenarios to assess best, expected and worst
cases. Each identified risk is assigned to one or more
managers who assess and monitor the risk, specify
possible procedures 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 collect
the results, evaluate them and review them for plaus-
ibility. If individual financial effects overlap, this is
noted in our database and taken into account in the
compilation process. After being approved by the de-
partment head, all results are passed on to the next
level in the hierarchy. The last step is complete when
Corporate Controlling reports to the Group 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 the key organisational levels.
We use two methods for this. In the first method, we
calculate a possible spectrum of results for the div-
isions and combine the respective scenarios. The totals
for “worst case” and “best case” indicate the total spec-
trum of results for the respective division. Within these
extremes, the total “expected cases” shows current ex-
pectations. 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 ana-
lyse and report on opportunities and risks. The reports
created by Corporate Controlling provide the Board
of Management with an additional, regular source of
information for managing the Group as a whole.
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: With respect to key opportunities and risks,
early-warning indicators have been defined that are
monitored constantly by the risk owners. 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
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2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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.
Accounting-related internal control and risk
management system
(Disclosures required under sections 289(4) and 315(4) of
the Handelsgesetzbuch (HGB – German Commercial Code)
and explanatory report)
Deutsche Post DHL Group has implemented an ac-
counting-related internal control system (ICS) as part of its
risk management system. The ICS aims to ensure the com-
pliance of (Group) accounting and financial reporting with
generally accepted principles. Specifically, it is intended to
ensure that all transactions are recorded promptly, accu-
rately and in a uniform manner on the basis of the applica-
ble norms, accounting standards and internal Group regu-
lations. Accounting errors are to be avoided in principle and
significant measurement errors detected promptly.
The ICS was designed to follow the internationally
recognised COSO framework for internal control systems
(COSO: Committee of Sponsoring Organizations of the
Treadway Commission). It is continuously updated and is a
mandatory and integral part of the accounting and financial
reporting process of the companies included in the Group.
The approach of the accounting-related ICS in summary:
• The internal control system takes a risk-based approach
that is defined in a Group guideline and takes both quan-
titative and qualitative aspects into account.
• Risks that could lead to material misstatements in the fi-
nancial reports are identified and minimum requirements
are formulated on the basis of such risks.
• Both preventive and detective control mechanisms are
used to ensure that the minimum requirements are met
along with all division-specific and local requirements.
• To maintain the system’s effectiveness and implement
continuous improvements, the ICS is subjected to on going
reviews using the “four eyes” principle of dual control.
• The Supervisory Board is provided with regular reports
on the results of the review of ICS effectiveness.
In addition to the ICS components already described, add-
itional organisational and technical procedures have been
implemented for all companies in the Group. Centrally
standardised accounting guidelines govern the reconcili-
ation of the single-entity financial statements and ensure
that international financial reporting standards (EU IFRS s)
are applied in a uniform manner throughout the Group. In
addition, German GAAP accounting policies have been es-
tablished for Deutsche Post AG and the other Group com-
panies subject to HGB reporting requirements. A standard
chart of accounts is required to be applied by all Group
companies. 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 service centre in order to centralise and standard-
ise them. The IFRS financial statements of the individual
Group companies are recorded in a standard, SAP-based
system and then processed at a central location where one-
step consolidation is performed. Other quality assurance
components include automatic plausibility reviews and sys-
tem validations of the accounting data. In addition, regular,
manual checks are carried out centrally at the Corporate
Center by Corporate Accounting & Controlling, Taxes and
Corporate Finance. If necessary, we call in outside experts.
Finally, the Group’s standardised process of preparing
financial statements by using a centrally administered
financial statements calendar guarantees a structured and
efficient accounting process.
Over and above the ICS and risk management, Corpor-
ate Internal Audit is an essential component of the Group’s
control and monitoring system. Using risk-based auditing
procedures, Corporate Internal Audit regularly examines
the processes related to financial reporting and reports its
results to the Board of Management.
It should, however, always be taken into consideration
that no ICS, regardless of how well designed, can offer ab-
solute certainty that all material accounting misstatements
will be avoided or detected.
Reporting and assessing opportunities and risks
In the following, we have reported mainly on those risks
and opportunities which, from a current standpoint, could
have a significant impact upon the Group during the fore-
cast period beyond the impact already accounted for in the
business plan. All risks and opportunities have been as-
sessed in terms of their probability of occurrence and their
impact. The assessment is used to classify opportunities
and risks as either low, medium or high. Medium and high
risks and opportunities are considered “significant”, and are
shown as black or grey in the table below. The following
assessment scale is used:
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Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
OPPORTUNITIES AND RISKS
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Classification of risks and opportunities
Probability of occurrence (%)
Planned Group EBIT
Risks
Opportunities
> 50
> 15
to
≤ 50
≤ 15
< – 500
– 500 to – 151
– 150 to 0
0 to 150
151 to 500
> 500
Effects (€ m)
Significance for the Group: Low Medium High
The opportunities and risks described here are not neces-
sarily the only ones the Group faces or is exposed to. Our
business activities could also be influenced by additional
factors of which we are currently unaware or which we do
not yet consider to be material.
Opportunities and risks are identified and assessed de-
centrally at Deutsche Post DHL Group. Reporting on possi-
ble deviations from projections, including latent opportu-
nities and risks, occurs primarily at the country or regional
level. In view of the degree of detail provided in the internal
reports, we have combined the decentrally reported op-
portunities and risks into the categories shown below for
the purposes of this report. It should be noted that the fig-
ures provided in the underlying individual reports exhibit
a significant correlation with the performance of the world
economy and global economic output. Unless otherwise
specified, a low relevance is attached to the individual op-
portunities and risks within the respective categories and
in the forecast period under observation (2020). The op-
portunities and risks generally apply to all divisions, unless
indicated otherwise.
Categories of opportunities and risks
Opportunities and risks arising from political,
regulatory or legal conditions
A number of risks arise primarily from the fact that the Group
provides some of its services in regulated markets. Many of
the postal services rendered by Deutsche Post AG and its
subsidiaries (particularly the Post & Parcel Germany divi-
sion) are subject to sector-specific regulation by the Bun-
desnetzagentur (German federal network agency)
Glossary,
page 166 pursuant to the Postgesetz (PostG – German Postal
Act)
Glossary, page 166. The Bundesnetzagentur approves or
reviews prices, formulates the terms of downstream access
and has special supervisory powers to combat market abuse.
Revenue and earnings risk can arise in particular from the
price cap procedure used to determine the rates for individ-
ual pieces of letter mail. The current rates approved in the
price cap procedure are in effect until 31 December 2021.
The German federal government intends to amend
the German Postal Act and its ordinances with the aim of
ensuring quality good postal services, ensuring competi-
tion develops positively and reducing unnecessary reg-
ulation. On 1 August 2019, the German Federal Ministry of
Economics and Energy published key points in this regard.
The initiation of a legislative procedure for a new Postal
Act is expected in the course of 2020. Depending upon the
structure of the new regulatory framework, opportunities
and risks may arise for the company’s regulated areas.
Any significant risks arising from ongoing legal pro-
ceedings are described in
note 44 to the consolidated finan-
cial statements. However, we do not see these proceedings as
posing a risk of significant deviations from the projections
for the 2020 forecast period.
The flow of goods and services is becoming more and
more international, which entails a certain level of risk. As
a globally operating logistics company, Deutsche Post DHL
Group is subject to the import, export and transit regula-
tions of more than 220 countries and territories whose
foreign trade and customs laws must also be complied
with. Not only has there been a steady increase in recent
years in the number and complexity of such laws and reg-
ulations (including their extraterritorial application), but vi-
olations are also being pursued more aggressively by the
competent authorities, with stricter penalties imposed. In
response to this risk, we have implemented a Group-wide
compliance programme. In addition to undertaking the le-
gally prescribed check of senders, recipients, suppliers and
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Deutsche Post DHL Group – 2019 Annual Report
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FURTHER INFORMATION
employees against current embargo lists, the programme
ensures, for example, that the legally required review of
shipments is carried out for the purpose of enforcing appli-
cable export restrictions as well as country sanctions and
embargos. Deutsche Post DHL Group co-operates with the
authorities responsible, both in working to prevent viola-
tions as well as in assisting in the investigation of violations
to avoid and limit potential sanctions.
Macroeconomic and industry-specific opportunities
and risks
Macroeconomic and sector-specific conditions are a key
factor in determining the success of our business. We
therefore pay close attention to economic trends within
the regions in which we operate. We are currently focussing
upon the potential impact of US trade policies, the possible
consequences of the United Kingdom’s withdrawal from
the EU and possible effects of the coronavirus. Alongside
other aspects, Brexit poses a risk to the Group’s net assets,
financial position and results of operations owing to poten-
tial changes in exchange rates, the economy, air traffic rights
and customs duties as well as the impact on our customers
both within and outside of the UK. The topic-specific work-
ing groups we have established in this context have helped
us to prepare as thoroughly as possible for the effects of
Brexit. The possible effects of the coronavirus are discussed
in the report on expected developments.
A variety of external factors offer us numerous oppor-
tunities; indeed we believe that markets will grow all over
the world. As the global economy grows, the logistics in-
dustry will continue to expand. Although the trade dispute
between the USA and China has weakened world trade, our
DHL divisions are benefitting from rising demand for com-
plex logistics solutions, amongst other things, thanks to our
position as the global market leader. Our strong position in
all the regions in which we operate allows us to compen-
sate for declines in certain trade lanes based on growth in
others. Whether and to what extent the logistics market will
grow depends on a number of factors.
The trend towards outsourcing business processes con-
tinues. Supply chains are becoming more complex and more
international, but are also more prone to disruption. Cus-
tomers are therefore calling for 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.
New opportunities
thanks to the
booming online
marketplace.
The booming online marketplace represents another op-
portunity for us as it is creating demand for transporting
documents and goods. The B2C market,
Glossary, page 166,
is experiencing strong growth, particularly due to the con-
tinued upward trend in digital retail trade. This has created
high growth potential for the domestic and international
parcel business, which we intend to tap into by expanding
our parcel network.
We are nonetheless unable to rule out the possibility of
an economic downturn in specific regions or a stagnation or
decrease in transport quantities. However, we assume that
this would not reduce demand in all business units. Indeed,
the opposite effect could arise in the parcel business, for
example because consumers might buy online more fre-
quently for reasons of cost. Companies might also be forced
to outsource transport services in order to lower costs. Cy-
clical risks can affect our divisions differently depending on
their magnitude and point in time, which could mitigate the
total effect. Overall, we consider these to be medium-level
risks. Moreover, we have taken measures in recent years to
make costs more flexible and to allow us to respond quickly
to changes in market demand.
Deutsche Post and DHL are in competition with other
providers and new competitors entering the market. 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 the high quality we offer, along with the cost sav-
ings we have generated in recent years, we believe that we
shall be able to remain competitive and keep any negative
effects at a low level.
Financial opportunities and risks
As a global operator, we are inevitably exposed to financial
opportunities and risks. These mainly involve opportunities
or risks arising from fluctuating exchange rates, interest
rates and commodity prices and the Group’s capital re-
quirements. We attempt to reduce the volatility of our fi-
nancial performance due to financial risk by implementing
both operational and financial management measures.
With respect to currencies, opportunities and risks re-
sult from scheduled foreign currency transactions as well
as those budgeted for the future. Any significant currency
risks arising from budgeted transactions are quantified as
67
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
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FINANCIAL STATEMENTS
FURTHER INFORMATION
a net position over a rolling 24-month period. Highly cor-
related currencies are consolidated in blocks. At the Group
level, the most important net surpluses are budgeted for
the “US dollar block” as well as for the pound sterling, the
Japanese yen and the Korean won. The Czech koruna is the
only currency with a considerable net deficit. As at the re-
porting date, there were no significant currency hedges for
scheduled foreign currency transactions.
Any general depreciation of the euro presents an op-
portunity as regards the Group’s earnings position. Based
upon current macroeconomic estimates, we consider the
likelihood of such an opportunity arising to be low. The
main risk to the Group’s earnings position would be a gen-
eral appreciation of the euro. The significance of this risk is
deemed low when considering the individual risks arising
from changes in the respective currencies.
The aggregate opportunity arising from all of these
currency effects is currently deemed to be of low relevance
for the Group.
As a logistics group, our biggest commodity price
risks result from changes in fuel prices (kerosene, diesel
and marine diesel). In the DHL divisions, most of these risks
are passed on to customers via operating measures (fuel
surcharges).
The key control parameters for liquidity management are
the centrally available liquidity reserves. Deutsche Post DHL
Group had central liquidity reserves of €3.5 billion as at the
reporting date, consisting of central financial investments
amounting to €1.5 billion plus a syndicated credit line of
€2 billion. The Group’s liquidity is therefore secured over
the short and medium terms. Moreover, the Group enjoys
open access to the capital markets on account of its good
ratings within the industry and is well positioned to ensure
that long-term capital requirements are fulfilled.
The Group’s net debt amounted to €13.4 billion at the
end of 2019. The share of financial liabilities with short-
term interest rate lock-ins in the total financial liabilities of
€17.0 billion was approximately 19 %.
Further information on the Group’s financial position
and finance strategy as well as on the management of fi-
nancial risks can be found in the report on the economic
position and in
note 42 to the consolidated financial state-
ments. Detailed information on risks and risk mitigation in
relation to the Group’s defined benefit retirement plans can
be found in
note 36 to the consolidated financial statements.
Opportunities and risks arising from
corporate strategy
Over the past few years, the Group has ensured that its
business activities are well positioned in the world’s fast-
est-growing regions and markets. We are also constantly
working to create efficient structures in all areas to enable
us to flexibly adapt capacities and costs to demand – a
condition for lasting, profitable business success. With re-
spect to our strategic orientation, we are focussing upon
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. Digitali-
sation plays a key role in this. Our digital transformation
involves the integration of new technologies into a cor-
porate culture that uses the changing environment to its
advantage. Opportunities arise, for example, from new
infrastructure networking possibilities and from digital
business models. Our earnings projections regularly take
account of development opportunities arising from our
strategic orientation.
In the observation period specified, risks arising from
the current corporate strategy, which covers a long-term
period, are considered to be of low relevance for the Group.
The divisions face the following special situations, however:
In the German mail and parcel business, we are re-
sponding to the challenges posed by the structural shift
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 ex-
pect our parcel business to continue growing in the coming
years and are therefore expanding our parcel network. We
are also expanding our range of electronic communications
services, securing our standing as the quality leader and,
where possible, making our transport and delivery costs
more flexible. We follow developments in the market very
closely and take them into account in our earnings projec-
tions. For the specified forecast period, we do not see these
developments as having significant potential to impact the
Post & Parcel Germany division negatively.
In the Express division, our future success depends
above all upon general factors such as trends in the com-
petitive environment, costs and quantities transported. We
plan to keep growing our international business and expect
a further increase in shipment volumes. Based upon 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
strategic opportunities or risks for the Express division that
go significantly beyond those reported in the section en-
titled “Opportunities and risks arising from macroeconomic
and industry-specific conditions”.
In the Global Forwarding, Freight division, we purchase
transport services from airlines, shipping companies and
freight carriers rather than providing them ourselves. We
normally expect to be able to save money by outsourc-
ing transport services, as this presents an opportunity to
68
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
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FURTHER INFORMATION
generate higher margins. In the worst-case scenario, we
bear the risk of not being able to pass on all price increases
to our customers. The extent of our opportunities and risks
essentially depends on trends in the supply, demand and
pricing of transport services as well as the duration of
our contracts. Comprehensive knowledge in the area of
brokering transport services helps us to capitalise on op-
portunities and minimise risk. We do not see any strategic
opportunities and risks for the Global Forwarding, Freight
division that significantly exceed those described in the
“Macroeconomic and industry-specific opportunities and
risks” section.
In the Supply Chain division, our success is highly de-
pendent on our customers’ business performance. Since
we offer customers a widely diversified range of products
in different sectors all over the world, we are able to diver-
sify our risk portfolio and thus counteract the incumbent
risks. Our future success moreover depends on our ability
to continuously improve our existing business, seamlessly
integrate new business and grow in our most important
markets and customer segments. We do not see any strate-
gic opportunities or risks for the Supply Chain division that
extend significantly beyond those reported in the section
entitled “Opportunities and risks arising from macroeco-
nomic and industry-specific conditions”.
The eCommerce Solutions division is responsible for
all of the Group’s international parcel delivery services
and predominantly serves customers in the fast-growing
e-commerce sector. Our goal is to leverage our international
resources and services to build a cross-border solutions
platform that can be connected to the most cost-efficient
networks for last-mile delivery. We want to grow profitably
in all sectors and customer segments. In 2019, much of our
spending went on restructuring costs. We took measures
to counteract the fundamental risk of rising cost pressure
and to improve network efficiency and cost flexibility. Oth-
erwise, we do not see any strategic opportunities or risks
relating to the eCommerce Solutions division that extend
significantly beyond those reported in the section entitled
“Opportunities and risks arising from macroeconomic and
industry- specific conditions”.
We currently do not see any specific corporate strategy
opportunities or risks of material significance.
Opportunities and risks arising from internal processes
A large number of internal processes must be aligned so
that we can render our services. These include – in add-
ition to our fundamental operating processes – supporting
functions such as sales and purchasing as well as the cor-
responding management processes. The extent to which
we succeed in aligning our internal processes to meet
customer needs whilst simultaneously lowering costs cor-
relates with potential positive deviations from the current
projections. We are steadily improving internal processes
with the help of our First Choice initiatives. The initiatives
help us to improve customer satisfaction whilst reducing
costs. Our earnings projections already incorporate the ex-
pected cost savings.
Our core competencies
are our focus.
Logistics services are generally provided in bulk and re-
quire a complex operational infrastructure with high qual-
ity 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 the tendering,
sorting, transport, warehousing or delivery of shipments
could seriously compromise our competitive position. To
enable us to identify possible disruptions in our workflows
and take the necessary countermeasures at an early stage,
we have introduced a global security management system
and developed a global IT platform known as Resilience360
that depicts and integrates our global supply chains and lo-
cations. Near real-time information on incidents relevant
to security flows into the system, which in cases of disrup-
tion also serves as a central communications platform. This
offers a competitive advantage that has already met with
a high degree of interest from both security agencies and
customers.
Opportunities and risks arising from
information technology
The security of our information systems is particularly
important to us. The goal is to ensure continuous IT sys-
tem operation and prevent unauthorised access to our
systems and databases. To meet these requirements, we
have defined guidelines, standards and procedures based
upon ISO 27002, the international standard for informa-
tion security management. In addition, IT risk is monitored
and assessed on an ongoing basis by Group Risk Manage-
ment, IT Audit, Data Protection and Corporate Security. For
our business processes to run smoothly at all times, the
essential IT systems must be continuously available. We
have therefore designed our systems to protect against
complete system failure.
We limit access to our systems and data such that
employees can only access the data they need to perform
69
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
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FURTHER INFORMATION
Opportunities and risks arising from human resources
It is essential for us to have qualified and motivated em-
ployees in order to achieve long-term success. However,
demographic change could lead to a decrease in the pool
of available talent in various markets. We respond to this
risk with measures designed to motivate our employees as
well as promote their development.
We use strategic resource management to address the
risks arising from an ageing population and the capacity
shortages that may result from changing demographic
and social structures. The experience gained is used to
continuously improve strategic resource management as
an analysis and planning instrument. The Generations Pact
page 56 agreed upon with trade unions in Germany also
helps take advantage of the career experience of employ-
ees for as long as possible whilst, at the same time, offering
young people long-term career perspectives.
Possible increases in both chronic and acute diseases
pose another risk to sustaining our business operations. We
address this risk with health management programmes,
measures tailored to local requirements and cross-divi-
sional co-operation.
their duties. All systems and data are backed up on a regular
basis, and critical data are replicated across data centres.
In addition to outsourced data centres, we operate central
data centres in the Czech Republic, Malaysia and the United
States. Our systems are thus geographically separate and
can be replicated locally.
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 pro-
cedure for managing software upgrades – to control risks
that could arise from outdated software or from software
upgrades.
We also take continuous action to minimise risk, such
as global monitoring of all of our networks and IT systems
by our Cyber Defence Centre along with regular informa-
tion security incident simulations. These are limited to our
regular employee training.
Based upon the measures described above, we esti-
mate the probability of experiencing a significant IT incident
with serious consequences as very low.
The European Union’s General Data Protection Regu-
lation (GDPR) prescribes a series of measures for pro-
tecting personal data as well as immediate and extensive
responses to and reporting of data losses (unauthorised
access by third parties). Any violations are punishable by
fines imposed by the data protection supervisory author-
ities. We have established implementation programmes in
all divisions and implemented the GDPR’s requirements in
the best possible way.
The content of any websites that may be referred to in the combined management report does not form part of the combined management report.
70
Deutsche Post DHL Group – 2019 Annual Report 2019 FINANCIAL YEAR
Group EBIT came to €4.1 billion,
meaning that we reached
the 2019 profit target.
In line with our Strategy 2025, we intend to keep growing
profitably in our core business in the years to come: we will
strengthen our core business, make targeted investments
and pick up the pace of digital transformation in all divisions.
MELANIE KREIS
Chief Financial Officer
Revenue growth, 2019
(Group)
+2.9 %
Organic revenue growth
(Group, by quarter)
+2.8 %
+3.1 %
+3.9 %
– 0.2 %
Q1
Q2
Q3
Q4
Group revenue, 2019
Revenue growth, 2019
€63,341
MILLION
Our fundamental growth drivers
are intact.
Parcel
business unit
Express
division
+9.3 %
+5.9 %
Momentum was especially strong
in our international express business
and our German parcel business
due to the sustained boom in e-commerce.
Revenue, 2019
(by division)
Post & Parcel
Germany
Express
Global Forwarding,
Freight
€15,484
MILLION
+2.5 %
€17,101
MILLION
+5.9 %
€15,128
MILLION
+1.0 %
Supply Chain
eCommerce
Solutions
€13,436
MILLION
+0.6 %
€4,045
MILLION
+5.5 %
We succeeded in raising revenue
in all divisions.
Global economy
The world economy lost
significant momentum
in 2019.
Our broad-based positioning makes us less
susceptible to volatility.
Revenue growth, 2019
Return on sales, 2019
6.5 %
Group EBIT, 2019
€4,128
MILLION
T hanks to disciplined revenue and cost management,
we improved our operating performance
in all divisions.
Free cash flow, 2019
€0.9
BILLION
Given the capital expenditure
of €3.6 billion, we are very satisfied
with the performance of
free cash flow.
EBIT after asset charge (EAC), 2019
€1,509
MILLION
We will reach
our E BIT target of at least
€5.3 billion in 2022.
Earnings per share, 2019
€2.13
Capex, 2019
(Group, excluding leasing)
€3.6
BILLION
To achieve further growth,
we will need to invest.
Capital expenditure, 2020 to 2022
(Group, cumulative target, excluding leasing)
Renewing our intercontinental fleet
€8.5 – 9.5
BILLION
Investments bring revenue growth,
which means higher earnings and higher free cash flow.
This will make us even more attractive
to investors.
In 2019, we added the
first four 777F aeroplanes
to our fleet.
In the Express division, we are therefore raising
our already high productivity level
and reducing our carbon footprint.
Capex, 2019
(by division, excluding leasing)
Post & Parcel
Germany
€469
MILLION
Express
€2,080
MILLION
Global Forwarding,
Freight
€114
MILLION
Supply Chain
€323
MILLION
eCommerce
Solutions
€132
MILLION
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
CORPORATE GOVERNANCE
75 – 86
76 REPORT OF THE SUPERVISORY BOARD
79 SUPERVISORY BOARD
79 Members of the Supervisory Board
79 Mandates held by Supervisory Board members
80 BOARD OF MANAGEMENT
80 Members of and mandates held by
the Board of Management
82 ANNUAL CORPORATE GOVERNANCE
STATEMENT, COR PORATE
GOVERNANCE REPORT
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
REPORT OF THE
SUPERVISORY BOARD
FINANCIAL STATEMENTS
FURTHER INFORMATION
REPORT OF THE
SUPERVISORY BOARD
Dear Shareholders,
Deutsche Post DHL Group, the global logistics company,
continued to grow in 2019. All operating divisions posted
positive performance despite the challenging economic
environment.
The Supervisory Board advised and oversaw the Board
of Management in management of the company, made de-
cisions regarding Board of Management membership, con-
sulted with the members of the Board of Management on the
strategic direction of the company and shaping corporate
policy, as well as participating in decisions that were ma-
terial for the company. Strategy 2025, which was adopted
after extensive discussions by the governing bodies in the
autumn of 2019, was particularly important. This plan aims
to achieve lasting business success through a focus upon
the profitable core businesses and digital transformation.
The Board of Management informed us on an ongoing
basis about the course of business, material transactions
and its deliberations on these matters. Issues concerning
business planning, profitability and maintaining competi-
tiveness were thoroughly deliberated in the committees
and the plenary meetings.
Between meetings, I also had regular discussions with
the Chairman of the Board of Management (CEO), Frank
Appel. Stefan Schulte, Finance and Audit Committee Chair,
additionally held regular conversations on current develop-
ments with the Chief Financial Officer, Melanie Kreis.
Members who were unable to attend all meetings gen-
erally participated in decisions by submitting their votes in
writing. At 98 %, the attendance rate remained very high on
the whole in the year under review, as the following break-
down shows.
Attendance at plenary and committee meetings
%
Supervisory Board member
Dr Nikolaus von Bomhard (Chair)
Andrea Kocsis (Deputy Chair)
Rolf Bauermeister
Dr Günther Bräunig
Dr Mario Daberkow
Ingrid Deltenre
Jörg von Dosky
Werner Gatzer
Gabriele Gülzau
Thomas Held
Dr Heinrich Hiesinger (since 15 May 2019)
Mario Jacubasch
Prof. Dr Henning Kagermann (until 15 May 2019)
Thomas Koczelnik
Ulrike Lennartz-Pipenbacher
Simone Menne
Roland Oetker
Dr Stefan Schulte
Stephan Teuscher
Stefanie Weckesser
Prof. Dr-Ing. Katja Windt
Attendance
100
100
100
86
100
89
100
88
100
100
100
100
100
100
100
100
100
100
100
100
100
Four plenary Supervisory Board meetings and twenty com-
mittee meetings were held in the year under review. The
members of the Board of Management regularly partici-
pated in plenary meetings and reported on the business
performance in the divisions for which they are responsible.
The Chairman, and the members of the Board of Manage-
ment responsible for their relevant divisions, attended the
76
NIKOLAUS VON BOMHARD
Chairman
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
REPORT OF THE
SUPERVISORY BOARD
FINANCIAL STATEMENTS
FURTHER INFORMATION
committee meetings. Executives from the tier immediately
below the Board of Management and representatives of the
auditors were also invited to attend for individual agenda
items. For financial year 2020, I will be holding talks with
key investors and voting rights advisers regarding issues
that are the Supervisory Board’s responsibility.
Key topics addressed in plenary meetings
In our March 2019 meeting, we discussed the annual and
consolidated financial statements, including the manage-
ment reports and the separate combined non-financial re-
port. Following the report by the auditor regarding the find-
ings of the audit, we approved the financial statements at
the recommendation of the Finance and Audit Committee.
We concurred with the Board of Management’s proposed
resolution on the appropriation of the net retained profit.
Based upon the results of the audit, no objections were
raised regarding the non-financial report.
We determined the annual bonus for active Board of
Management members based upon the degree of target
achievement and corresponding recommendations by the
Strategy and Executive Committees.
The proposed resolutions for the 2019 Annual Gen-
eral Meeting, including the dividend proposal, were also
approved at this meeting. Moreover, we appointed To-
bias Meyer to the Board of Management effective from
1 April 2019 for an initial period of three years and en-
trusted him with the management of the Post & Parcel
Germany division.
In June, we discussed John Gilbert’s departure from
the Board of Management and appointed Oscar de Bok as
his successor. We also extended Tim Scharwath’s mandate
and employment contract until 2025. The Group’s strategy
and StreetScooter’s development were further topics of the
meeting.
After initially considering the issue in June, we con-
sulted in depth on Strategy 2025 in September and worked
with the Board of Management to determine the key areas
of focus in the divisions. We extended Thomas Ogilvie’s
mandate and employment contract until 2025 and deter-
mined achievement of the strategic targets of the 2019
LTI Tranche for all Board of Management members. Our
annual Directors’ Day was held in September in conjunction
with this meeting and our closed meeting. Speakers from
within and outside of the company made presentations on
current issues and developments and were available to pro-
vide explanations and answer questions.
At the last Supervisory Board meeting of the year in
December, we approved the Group’s business plan for 2020
and the targets for variable remuneration of the Board of
Management for 2020, and agreed to again issue an un-
qualified Declaration of Conformity.
Key topics addressed in committee meetings
The six committees of the Supervisory Board prepare the
decisions to be taken in the plenary meetings. They have
also been tasked with taking the final decisions regarding
a few matters, including approval for property transac-
tions and secondary activities of Board of Management
members. The committee chairs report extensively in the
plenary meetings on the work of the committees. The com-
position of the committees is outlined in the Annual Corpo-
rate Governance Statement,
page 82 ff.
The Executive Committee met four times and dealt
mainly with Board of Management issues and preparatory
work for Supervisory Board meetings.
The Finance and Audit Committee met seven times. It
examined the financial statements and the management
reports for the company and the Group. The committee
also discussed the quarterly financial reports and the half-
yearly financial report, which were reviewed by the auditors
before their publication, with the Board of Management
and the auditors. In addition, it issued the audit engagement
for the auditors elected by the Annual General Meeting
and specified the key audit priorities. The committee also
discussed the tender for auditing services for financial
year 2023 on several occasions and provided extensive
support for this process. Also covered at the meetings
were the non-audit services provided by the auditor, the
accounting process, risk management and the findings of
internal audits. It obtained detailed reports from the Chief
Compliance Officer on compliance and on updates to the
compliance organisation and compliance management.
The Strategy Committee met four times, primarily ad-
dressing the business units’ strategic positioning in their
respective market segments and the implementation of
our Strategy 2020 and Strategy 2025. Particular areas of
focus also included the progress made in the digital trans-
formation of the company and regular status updates by
the divisions.
The Nomination Committee met once. In December
it recommended that the Supervisory Board propose
Lawrence Rosen to the Annual General Meeting as a Super-
visory Board candidate.
The Mediation Committee did not meet in the year un-
der review.
The Personnel Committee also held four meetings.
Items discussed focussed upon human resources develop-
ment, promoting women to executive positions and further
developing the Group-wide human resources initiatives.
Changes to the Supervisory Board
A shareholder representative, Henning Kagermann, stepped
down from the Supervisory Board with effect from the end
of the 2019 Annual General Meeting. He was a committed
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and engaged member of the Supervisory Board for more
than ten years, contributing his experience and advising
the Board of Management with great vision, primarily on
digitalisation and technology. The 2019 Annual General
Meeting elected Heinrich Hiesinger as a new member of
the Supervisory Board. As a manager with international
experience, his particular expertise in strategy, innovation
and digitalisation issues is a supplement to the Supervisory
Board’s skills profile.
An overview of current Supervisory Board members is
provided on
page 79.
Changes to the Board of Management
With effect from 1 January 2019, Ken Allen assumed re-
sponsibility for the newly created eCommerce Solutions
division. John Pearson was appointed to the Board of Man-
agement for an initial period of three years and became
his successor at the Express division. On 1 April 2019, To-
bias Meyer took over responsibility for the Post & Parcel
Germany division, initially also for a period of three years.
John Gilbert resigned from the Board of Management for
personal reasons with effect from 30 September 2019. We
transferred responsibility for the Supply Chain division to
Oscar de Bok and also appointed him to the Board of Man-
agement for an initial three years. He was previously Chief
Executive Officer of DHL Supply Chain Mainland Europe,
Middle East and Africa.
Managing conflicts of interest
Supervisory Board members do not hold positions on the
governing bodies of, or provide consultancy services to, or
maintain personal relationships with, the Group’s main
competitors. The Supervisory Board was not informed of
any conflicts of interest affecting individual members dur-
ing the year under review.
Company in compliance with all recommendations
of the German Corporate Governance Code
In December, the Board of Management and the Super-
visory Board issued an unqualified Declaration of Conformity
pursuant to section 161 of the Aktiengesetz (AktG – German
Stock Corporation Act), which was also published on the
company’s website. The declarations from previous years
are also available there. The company also continued to
comply with all recommendations of the Government Com-
mission on the German Corporate Governance Code in the
version dated 7 February 2017, which was published in the
Federal Gazette on 24 April / 19 May 2017, following sub-
mission of the Declaration of Conformity in December 2018,
and decided to continue to do so in the future. We have
also implemented all the suggestions made by the Gov-
ernment Commission, with the exception of broadcasting
the full AGM on the internet. Further information regarding
corporate governance within the company can be found in
the annual Corporate Governance Statement (page 82 ff.).
2019 annual and consolidated financial statements
examined
The auditors elected by the AGM, PricewaterhouseCoo-
pers GmbH Wirtschaftsprüfungsgesellschaft (PwC), Düssel-
dorf, audited the annual and consolidated financial state-
ments for financial year 2019, including the combined
management report, and issued unqualified audit opinions.
PwC also reviewed the quarterly financial reports and the
half-yearly financial report and audited the non-financial
report on behalf of the Finance and Audit Committee with-
out issuing any objections.
Upon recommendation by the Finance and Audit Com-
mittee, the Supervisory Board in its meeting today focussed
upon the annual and consolidated financial statements,
including the Board of Management’s proposal on the
appropriation of the net retained profit, the combined man-
agement report and the combined non-financial report for
financial year 2019, and discussed these in depth with the
Board of Management. The auditors reported on the results
of their audit before the Finance and Audit Committee and
plenary meeting and were available to answer questions
and provide information. The Supervisory Board concurred
with the results of the audit and approved the annual and
consolidated financial statements for financial year 2019,
as recommended by the Finance and Audit Committee. No
objections were raised on the basis of the final outcome of
the examination by the Supervisory Board and the Finance
and Audit Committee of the annual and consolidated finan-
cial statements, the combined management report and the
proposal for the appropriation of the net retained profit.
Similarly, no objections were raised with regard to the
examination of the combined non-financial report. The
Supervisory Board endorsed the Board of Management’s
proposal for the appropriation of the net retained profit and
the payment of a dividend of €1.25 per share.
We would like to thank the members of the Board of
Management and the employees of the company for their
dedicated and successful work in this financial year.
Bonn, 9 March 2020
The Supervisory Board
Nikolaus von Bomhard
Chairman
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SUPERVISORY BOARD
Members of the Supervisory Board
Mandates held by Supervisory Board members
Shareholder
representatives
Dr Nikolaus von Bomhard
(Chair) Chair of the Supervisory
Board and former Chair of the
Board of Management,
Münchener Rückversicherungs-
Gesellschaft AG (Munich Re)
Dr Günther Bräunig
CEO of KfW Bankengruppe
Dr Mario Daberkow
Member of the Managing
Board of Volkswagen Financial
Services AG
Ingrid Deltenre
Member of various boards of
directors and former Director
General of the European
Broadcasting Union
Werner Gatzer
State Secretary, Federal
Ministry of Finance
Dr Heinrich Hiesinger
(since 15 May 2019) Member of
the Supervisory Board of
BMW AG
Prof. Dr Henning Kagermann
(until 15 May 2019) Member of
the Supervisory Board of KUKA
AG and former CEO of SAP AG
Simone Menne
Member of various supervisory
boards and former member of
the Board of Managing
Directors, Boehringer
Ingelheim GmbH
Roland Oetker
Managing Partner, ROI
Verwaltungsgesellschaft mbH
Jörg von Dosky
Chair of the Group and
Company Executive
Representation Committee,
Deutsche Post AG
Gabriele Gülzau
Chair of the Works Council,
Deutsche Post AG,
Mail Branch, Hamburg
Dr Stefan Schulte
Chair of the Executive Board
of Fraport AG
Thomas Held
Chair of the Central Works
Council, Deutsche Post AG
Prof. Dr-Ing. Katja Windt
Member of the Managing
Board of SMS group GmbH
Employee representatives
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
(until 14 September 2019)
Secretary, ver.di national
administration
(since 15 September 2019)
Mario Jacubasch
Deputy Chair of the
Group Works Council,
Deutsche Post AG
Thomas Koczelnik
Chair of the Group Works
Council, Deutsche Post AG
Ulrike Lennartz-Pipenbacher
Deputy Chair of the Central
Works Council,
Deutsche Post AG
Stephan Teuscher
Head of Wage, Civil Servant
and Social Policies in the
Postal Services, Forwarding
Companies and Logistics
Department, ver.di National
Administration
Stefanie Weckesser
Deputy Chair of the Works
Council, Deutsche Post AG,
Mail Branch, Augsburg
Shareholder
representatives
Memberships of
comparable bodies
Memberships of statutory
supervisory boards
Dr Nikolaus von Bomhard
(Chair) Chair of Münchener
Rückversicherungs-
Gesellschaft AG (Munich Re)
(since 30 April 2019)
Dr Günther Bräunig
Deutsche Pfandbriefbank AG
(Chair)
Deutsche Telekom AG
Werner Gatzer
Flughafen Berlin Branden-
burg GmbH
PD-Berater der öffentlichen
Hand GmbH (Chair)
Dr Heinrich Hiesinger
(since 15 May 2019)
BMW AG
Prof. Dr Henning Kagermann
(until 15 May 2019) Münchener
Rückversicherungs-
Gesellschaft AG (Munich Re)
(until 30 April 2019)
KUKA AG
Simone Menne
BMW AG
Springer Nature KGaA
Prof. Dr-Ing. Katja Windt
Fraport AG
Dr Nikolaus von Bomhard
(Chair) Athora Holding Ltd.,
Bermuda (Board of Directors,
Chair)
Dr Mario Daberkow
Softbridge-Projectos
Tecnológicos S. A., Portugal 1
(Board of Directors)
Volkswagen Participações Ltda.,
Brazil (Supervisory Board) 1
Volkswagen Holding Financière
S. A., France (Supervisory Board) 1
Volkswagen Payments S. A.,
Luxembourg (Supervisory
Board, Chair) 1
Volkswagen S. A., Institución de
Banca Múltiple, Mexico
(Supervisory Board) 1
VW Credit, Inc., USA
(Board of Directors) 1
Ingrid Deltenre
Givaudan SA, Switzerland
(Board of Directors)
Banque Cantonale Vaudoise
SA, Switzerland
(Board of Directors)
Agence France Presse, France
(Board of Directors)
Sunrise Communications AG,
Switzerland (Board of Directors)
Roland Oetker
Rheinisch-Bergische
Verlagsgesellschaft mbH
(Supervisory Board)
Simone Menne
Johnson Controls International
plc, Ireland (Board of Directors)
Russel Reynolds Associates Inc.,
USA (Board of Directors)
(since 30 January 2019)
Dr Stefan Schulte
Fraport Ausbau Süd GmbH
(Supervisory Board, Chair) 2
Fraport Regional Airports of
Greece A S. A., Greece
(Board of Directors, Chair) 2
Fraport Regional Airports
of Greece Board of Directors,
Chair B S. A., Greece
(Board of Directors, Chair) 2
Fraport Regional Airports
of Greece Management
Company S. A., Greece
(Board of Directors, Chair) 2
Fraport Brasil S. A. Aeroporto
de Porto Alegre, Brazil
(Supervisory Board, Chair) 2
Fraport Brasil S. A. Aeroporto
de Fortaleza, Brazil
(Supervisory Board, Chair) 2
Employee representatives
Memberships of statutory
supervisory boards
Jörg von Dosky
PSD Bank München eG
Stephan Teuscher
DHL Hub Leipzig GmbH
(Deputy Chair)
1 Group mandates, Volkswagen AG.
2 Group mandates, Fraport AG.
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BOARD OF MANAGEMENT
Members of and mandates held by the Board of Management
MELANIE KREIS
Finance, born in 1971, Board member
since October 2014, appointed until
June 2022.
DR THOMAS OGILVIE
Human Resources, Corporate Incubations,
born in 1976, Board member since Sep-
tember 2017, appointed until August 2025.
DR FRANK APPEL
Chief Executive Officer, Global Business
Services, also responsible for Post -
eCommerce - Parcel until 31 March 2019,
born in 1961. Member of the Board of
Management since November 2002, CEO
since February 2008, appointed until
October 2022.
Seats on other legally mandated
supervisory boards: member of the
Supervisory Board of adidas AG
until 9 May 2019.
KEN ALLEN
eCommerce Solutions (since 1 Janu-
ary 2019), born in 1955, Board member
since February 2009, appointed until
July 2022.
Also holds a seat on the Board of Direc-
tors of DHL Sinotrans International Air
Courier Ltd.1, China and is a member
of the Board of Directors of Blue Dart
Express Ltd.1, India.
1 Group mandate
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TIM SCHARWATH
Global Forwarding, Freight, born in 1965,
Board member since June 2017,
appointed until May 2025.
JOHN PEARSON
Express (since 1 January 2019),
born in 1963, Board member since Janu-
ary 2019, appointed until December 2021.
DR TOBIAS MEYER
Post & Parcel Germany (since 1 April 2019),
born in 1975, Board member since
April 2019, appointed until March 2022.
OSCAR DE BOK
Supply Chain (since 1 October 2019),
born in 1967, Board member since
October 2019, appointed until Septem-
ber 2022.
Was a member of the Board of Directors of
Global-e U. K. Ltd.1 until 31 December 2019.
1 Group mandate
Left the company during the year
under review
JOHN GILBERT Supply Chain, born in 1963.
Board member from March 2014 to
September 2019.
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ANNUAL CORPORATE
GOVERNANCE
STATEMENT, COR-
PORATE GOVERN-
ANCE REPORT
Company in compliance with all recommendations
of the German Corporate Governance Code
In December 2019, the Board of Management and the Super-
visory Board once again issued an unqualified Declaration
of Conformity pursuant to section 161 of the Aktiengesetz
(AktG – German Stock Corporation Act):
“The Board of Management and the Supervisory Board
of Deutsche Post AG declare that all recommendations of the
Government Commission German Corporate Governance
Code (DCGK) in the version dated 7 February 2017 and pub-
lished in the Federal Gazette on 24 April / 19 May 2017 have
been complied with even after issuance of the Declaration
of Conformity in December 2018 and that all recommenda-
tions of the Code in the version dated 7 February 2017 and
published in the Federal Gazette on 24 April / 19 May 2017
shall also be complied with in the future.”
The suggestions of the Code dated 7 February 2017 are
also implemented, except broadcasting the full AGM. This
helps ensure frank and open discussion during the share-
holders’ debate.
The Board of Management and Supervisory Board will
discuss the new recommendations and suggestions in the
Code, which is expected to be published in the Federal Ga-
zette in the first quarter of 2020, and will take a position on
these in the next Declaration of Conformity.
The current Declaration of Conformity and those for
the last five years as well as the Annual Corporate Govern-
ance Statement can be viewed on the company’s website.
and the Supervisory Board support the Group’s diversity
strategy, with a particular focus upon the goal of increasing
the number of women in executive positions.
Corporate governance principles and shared values
Our business relationships and activities are based upon
responsible business practice that complies with applic-
able laws, ethical standards and international guidelines,
and this also forms part of the Group’s strategy. Equally,
we require our suppliers to act in this way. Long-term re-
lationships with our shareholders, employees and groups
associated with the company, whose decisions to select
Deutsche Post DHL Group as a supplier, employer or in-
vestment are increasingly also based upon the requirement
that we apply good corporate governance criteria, are en-
couraged.
The
Code of Conduct, dpdhl.com / en, is firmly established
within the company and is applicable in all divisions and
regions. The Code of Conduct is based upon the principles
set out in the Universal Declaration of Human Rights and
the United Nations (UN) Global Compact. It is consistent
with recognised legal standards, including the applicable
anti-corruption legislation and agreements.
The Code of Conduct also defines what is meant by
diversity. Diversity and mutual respect are some of the
core values that contribute to good co-operation within
the Group and thus to economic success. The key criteria
for the recruitment and professional development of our
employees are their skills and qualifications. Our Diversity
Council discusses the strategic aspects of diversity manage-
ment and divisional requirements. Its members comprise
executives from the central functions and divisions and it is
chaired by the Board Member for Human Resources. Mem-
bers also act as ambassadors for, and promote, diversity in
the divisions. The members of the Board of Management
Doing business includes using the expertise as a mail
and logistics services group for the benefit of society and
the environment, and we motivate our employees to en-
gage personally.
Ensuring our interactions with business partners, share-
holders and the public are conducted with integrity and
within the bounds of the law is vital to maintaining our
reputation. It is also the foundation of Deutsche Post DHL
Group’s lasting business success. Our compliance manage-
ment system (CMS) focusses upon preventing corruption
and anti-competitive conduct. We continually improve and
upgrade the CMS, in part by incorporating the results of
the compliance audits and insights obtained from reported
violations. The CMS’s individual components, the Code of
Conduct and information on diversity management and
Corporate
sustainability issues are outlined in detail in our
Sustainability Report, dpdhl.com/sustainabilityreport2019. This
report also contains the non-financial report with manda-
tory disclosures in accordance with sections 289c ff. of the
Handelsgesetzbuch (HGB – German Commercial Code).
Co-operation between the Board of Management and
the Supervisory Board
As a German listed company, Deutsche Post AG is managed
by the members of the Board of Management, who are ap-
pointed, advised and supervised by the members of the
Supervisory Board.
The Board of Management’s rules of procedure set out
the principles governing its internal organisation, manage-
ment and representation, as well as co-operation between
its individual members. The members of the Board of Man-
agement manage their board departments on their own
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responsibility, except where decisions of particular signifi-
cance and consequence for the company or the Group must
be taken by the members of the Board of Management as
a whole. They are required to subordinate the interests of
their individual board departments to the collective inter-
ests of the company and to inform the full Board of Man-
agement about significant developments in their spheres
of responsibility.
The Chair of the Board of Management conducts its
business, aligns board department activities with the com-
pany’s overall goals and plans, and ensures that corporate
policy is implemented. When making decisions, members
of the Board of Management may not act in their own per-
sonal interest or exploit corporate business opportunities
for their own benefit. Conflicts of interest must be disclosed
to the Supervisory Board without delay; the other Board of
Management members must also be informed.
The Supervisory Board works with the Board of Man-
agement to ensure long-term succession planning for the
Board of Management. In addition to the requirements of
the Aktiengesetz (AktG – German Stock Corporation Act)
and the DCGK, this plan includes the Supervisory Board’s
diversity criteria it has stipulated for the Board of Man-
agement’s composition and the target for the percentage
of women on the Board of Management. Taking into ac-
count the specific qualifications required, the Executive
Committee develops a profile, selects particularly suitable
candidates from those available for interviews and submits
candidate proposals to the Supervisory Board. The initial
term of service for members of the Board of Management
runs for no more than three years. No member of the Board
of Management is a member of a supervisory board of a
non-Group listed company or exercises a comparable func-
tion. The Supervisory Board has stipulated that the term
of service of Board of Management members generally
ends no later than the year in which the Board of Manage-
ment member reaches the age of 65. D & O insurance for
the members of the Board of Management provides for a
deductible as set out in the AktG.
The Supervisory Board’s rules of procedure contain
the principles for its internal organisation, a catalogue of
Board of Management transactions requiring its approval
and the rules governing the work of the Supervisory Board
committees. The chair elected by the members from their
ranks co-ordinates the work of the Supervisory Board and
represents the Supervisory Board publicly. The Supervisory
Board represents the company in respect of the Board of
Management members. The General Meeting determines
the remuneration of Supervisory Board members. There
are no contracts between the company and Supervisory
Board members apart from those governing their Super-
visory Board activities and the employment contracts with
the employee representatives.
The Supervisory Board meets at least twice each
half-year, often without the Board of Management pres-
ent. Extraordinary Supervisory Board meetings are held
whenever decisions need to be taken at short notice or
particular issues require discussion. In financial year 2019,
Supervisory Board members held four plenary meetings,
twenty committee meetings and one closed meeting, as
described in the
Report of the Supervisory Board, page 76 f.
At 98 %, the attendance rate again remained very high. The
Report of the Supervisory Board contains a breakdown of
attendance by member.
The Board of Management and the Supervisory Board
regularly discuss the Group’s strategy, the divisions’ object-
ives and strategies, the financial position and performance
of the company and the Group, key business transactions,
the progress of acquisitions and investments, compliance
and compliance management, risk exposure and risk man-
agement, and all material business planning and related
implementation issues. The Board of Management informs
the Supervisory Board promptly and in full about all issues
of significance. The chair of the Supervisory Board and the
CEO maintain close contact about current issues.
Supervisory Board decisions are prepared in advance
in separate meetings of the shareholder representatives
and the employee representatives, and by the relevant
committees. Each plenary Supervisory Board meeting in-
cludes a detailed report regarding the committees’ work
and the decisions taken. Supervisory Board members are
personally responsible for ensuring they receive the train-
ing and professional development measures they need to
perform their tasks and receive appropriate support from
the company. A core element is the annual Directors’ Day,
which is held regularly in conjunction with the Supervisory
Board’s closed meeting. At this event, speakers from within
and outside of the company make presentations on current
issues and developments and are available to provide ex-
planations and answer questions.
Independence of Supervisory Board members
All Supervisory Board members are independent within
the meaning of the DCGK. The number of independent
Supervisory Board members therefore exceeds the target
we had set ourselves of at least 75 % of the Supervisory
Board as a whole. In light of the European Commission’s
recommendation regarding the independence of non-
executive or supervisory directors and the wide-ranging
protection against summary dismissal and ban regarding
discrimination contained in the Betriebsverfassungsgesetz
(BetrVG – German works constitution act) and the
Mitbestimmungsgesetz ( MitbestG – German co-deter-
mination act), being an employee of the company is not
inconsistent with the requirement for independence. The
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largest shareholder in the company, KfW Bankengruppe,
currently holds approximately 21 % of the shares in
Deutsche Post AG and therefore does not exercise control.
Accordingly, Werner Gatzer and Günther Bräunig are also
independent. The duration of service of all members of the
Supervisory Board is in compliance with the recommenda-
tion by the European Commission that finds no heightened
risk of loss of independence for members serving up to
three complete terms of office. No former members of the
Board of Management are members of the Supervisory
Board.
The Supervisory Board intends to submit a proposal to
the 2020 Annual General Meeting to elect Lawrence Rosen
to the Supervisory Board. Lawrence Rosen was a member
of the company’s Board of Management until September
2016. With his proven finance expertise, he meets the
requirements in the skills profile stipulated by the Super-
visory Board and is a particularly suitable candidate.
No Supervisory Board members exceed the maximum
service period of three terms of office or the age limit of 72.
They also do not hold positions on the governing bodies of,
or provide consultancy services to, or maintain personal
relationships with, the Group’s main competitors.
Effectiveness of the Supervisory Board’s activities
The Supervisory Board carries out an annual review of the
effectiveness of its work in plenary meetings and in the
committees. This review is based upon a questionnaire,
individual conversations between the Supervisory Board
members and the chair and discussion in a Supervisory
Board meeting, without the Board of Management. Sug-
gestions made by individual members of the Supervisory
Board are also taken up and implemented during the year.
In financial year 2019, the Supervisory Board reviewed the
efficiency of its activities in its meetings in September and
December. It concluded that it had performed its monitor-
ing and advisory duties efficiently and effectively.
Targets for the composition of the Supervisory Board
(skills profile)
The Supervisory Board has set itself the following targets
for its composition; they also represent the skills profile it
has set itself:
1 When proposing candidates to the Annual General
Meeting for election as Supervisory Board members,
the Supervisory Board is guided purely by the best
interests of the company. Subject to this requirement,
the Supervisory Board aims to ensure that independent
Supervisory Board members as defined in number 5.4.2
of the German Corporate Governance Code account for
at least 75 % of the Supervisory Board, and that at least
30 % of the Supervisory Board members are women.
2 The Supervisory Board’s future proposals to the Annual
General Meeting will continue to consider candidates
whose origins, education or professional experience
equip them with particular international knowledge
and experience.
3 The Supervisory Board should be in a position to
collectively provide competent advice to the Board
of Management on fundamental future issues; in its
opinion this includes, in particular, the digital trans-
formation.
4 The Supervisory Board should collectively have suffi-
cient expertise in the areas of accounting and finan-
cial statement audits. This includes knowledge of in-
ternational developments in the field of accounting.
Additionally, the Supervisory Board believes that the
independence of its members helps guarantee the in-
tegrity of the accounting process and ensure the inde-
pendence of the auditors.
6
5 Conflicts of interest affecting Supervisory Board mem-
bers are an obstacle to providing independent advice
to, and supervision of, the Board of Management. The
Supervisory Board will decide how to deal with poten-
tial or actual conflicts of interest on a case-by-case
basis, in accordance with the law and giving due con-
sideration to the German Corporate Governance Code.
In accordance with the age limit adopted by the Super-
visory Board and laid down in the rules of procedure
for the Supervisory Board, proposals for the election
of Supervisory Board members must ensure that their
term of office ends no later than the close of the next
Annual General Meeting to be held after the Supervi-
sory Board member reaches the age of 72. As a gen-
eral rule, Supervisory Board members should not serve
more than three full terms of office.
The current Supervisory Board meets these targets and this
skills profile. The Supervisory Board took into account the
targets and skills profile in its proposals to the 2019 Annual
General Meeting and now also in its proposal to this year’s
Annual General Meeting to elect Lawrence Rosen to the
company’s Supervisory Board.
Board of Management and Supervisory Board
committees
The members of the Board of Management meet quarterly
for business review meetings. The business review meet-
ings discuss strategic initiatives, operational matters and
the budgetary situation in the divisions.
The members of the Supervisory Board’s committees
prepare the resolutions to be taken in the plenary meetings
and fulfil the duties assigned to them by the law, the com-
pany’s Articles of Association and the rules of procedure for
the Supervisory Board.
84
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
ANNUAL CORPORATE
GOVERNANCE STATEMENT
FINANCIAL STATEMENTS
FURTHER INFORMATION
The Executive Committee prepares the resolutions to
be taken in the plenary meetings for appointing members
of the Board of Management, drawing up their contracts of
service and determining their remuneration. It also works
on long-term succession planning for the Board of Man-
agement.
The Finance and Audit Committee reviews the com-
pany’s accounts, oversees its accounting process, the effec-
tiveness of the internal control system, risk management
and internal auditing, and the financial statement audit, and
in particular the selection of the auditors and their inde-
pendence. The Finance and Audit Committee also deals
with the audit of the non-financial report. It also approves
the Board of Management’s engagement of the auditor to
perform non-audit services. The committee examines cor-
porate compliance issues and discusses the half-yearly and
quarterly financial reports with the Board of Management
before publication. Based upon its own assessment, the
committee submits proposals for the approval of the annual
and consolidated financial statements by the Supervisory
Board. Upon entry into force of the Act Implementing the
Second Shareholder Rights Directive (ARUG II) on 1 Jan-
uary 2020, the Finance and Audit Committee additionally
assumed responsibility for issuing the required Supervisory
Board approval for significant transactions between the
company and related parties.
The Chairman of the Finance and Audit Committee,
Stefan Schulte, is an independent financial expert as de-
fined in sections 100(5) and 107(4) of the AktG. He has no
relationship with the company, its governing bodies or its
shareholders that could cast doubt on his independence.
An agreement has been reached with the auditors that
the Chairman of the Supervisory Board and the Chairman of
the Finance and Audit Committee shall be informed without
delay of any potential grounds for exclusion or for impair-
ment of the auditors’ independence that arise during the
audit, to the extent that these are not immediately rem-
edied. In addition, it has been agreed that the auditors shall
inform the Supervisory Board without delay of all material
findings and incidents occurring in the course of the audit.
Furthermore, the auditors must inform the Supervisory
Board if, whilst conducting the financial statement audit,
they find any facts leading to the Declaration of Conform-
ity issued by the Board of Management and Supervisory
Board being incorrect. The Audit Committee chair and the
auditor regularly exchange information both at meetings
and at other times.
The Strategy Committee prepares the Supervisory
Board’s strategy discussions and regularly discusses the
competitive position of the enterprise as a whole and of the
divisions. It addition, it does preparatory work on corporate
acquisitions and divestitures that require the Supervisory
Board’s approval.
Committees of the Supervisory Board
Executive Committee
Dr Nikolaus von Bomhard (Chair)
Andrea Kocsis (Deputy Chair)
Rolf Bauermeister
Ingrid Deltenre
Werner Gatzer
Thomas Held
Personnel Committee
Andrea Kocsis (Chair)
Strategy Committee
Dr Nikolaus von Bomhard (Chair)
Andrea Kocsis (Deputy Chair)
Rolf Bauermeister
Dr Günther Bräunig (since 15 May 2019)
Prof. Dr Henning Kagermann (until 15 May 2019)
Thomas Koczelnik
Roland Oetker
Nomination Committee
Dr Nikolaus von Bomhard (Deputy Chair)
Dr Nikolaus von Bomhard (Chair)
Thomas Koczelnik
Roland Oetker
Finance and Audit Committee
Dr Stefan Schulte (Chair)
Stephan Teuscher (Deputy Chair)
Werner Gatzer
Thomas Koczelnik
Simone Menne
Stefanie Weckesser
Ingrid Deltenre
Werner Gatzer
Mediation Committee (pursuant to section 27(3) of the
German Co-determination Act)
Dr Nikolaus von Bomhard (Chair)
Andrea Kocsis (Deputy Chair)
Rolf Bauermeister
Roland Oetker
85
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
ANNUAL CORPORATE
GOVERNANCE STATEMENT
FINANCIAL STATEMENTS
FURTHER INFORMATION
The Nomination Committee presents the shareholder
representatives of the Supervisory Board with recom-
mendations for shareholder candidates for election to the
Supervisory Board at the Annual General Meeting.
The Personnel Committee discusses human resources
principles for the Group.
The Mediation Committee carries out the duties as-
signed to it pursuant to the MitbestG: it makes proposals
to the Supervisory Board on the appointment of members
of the Board of Management in those cases in which the
required majority of two-thirds of the votes of the Super-
visory Board members is not reached. The committee did
not meet in the past financial year.
Information about the work of the Supervisory Board
and its committees in financial year 2019 is also contained
in the
Report of the Supervisory Board, page 76 ff. The mem-
bers of the Supervisory Board and the mandates they hold
are listed on
page 79.
Diversity
When filling Board of Management vacancies, the Super-
visory Board pays close attention to ensuring that the
members of the Board of Management have a variety of
qualifications, skills and experience. Long-term succes-
sion planning in all divisions guarantees that there will be
sufficient qualified candidates to fill Board of Management
positions in future. The early promotion of women in the
company also plays a key role. The current target for the
proportion of women on the Board of Management is 2 : 8,
to be achieved by the date of the Annual General Meeting
in 2021.
The Board of Management set target quotas for the
proportion of women in the two executive tiers below the
Board of Management of 20 % for tier 1 and 30 % for tier 2;
these targets applied to the period between 1 January 2017
and 31 December 2019. The target of 20 % set for tier 1 was
far exceeded at 25 %, but at 23.1 %, the target of 30 % spec-
ified for tier 2 was not met. Since the start of the target
period on 1 January 2017, extensive organisational changes
have been made at tier 2: this has led to changes in the
structure of the various units and thus also affected the
number of female executives. We shall continue to work on
expanding the female talent pool below the second execu-
tive tier so that sufficient suitable candidates are available
in the future.
A new target of 30 % was set for the percentage of
women at both executive tiers below the Board of Manage-
ment. We aim to meet these targets by 31 December 2024.
The company intends to increase the share of women
in management positions globally and has therefore set
itself the goal of increasing the percentage of women in
middle and upper management to 30 % by 2025. This figure
has risen continually in recent years and stood at 22.2 % as
at 31 December 2019.
The diversity criteria important to the Supervisory
Board, including when considering its own composition,
are outlined in the list of its goals. With 35 %, the Super-
visory Board exceeds the statutory share of women of 30 %.
Shareholders and General Meeting
Shareholders exercise their rights, and in particular their
right to receive information and to vote, at the General
Meeting. Each share in the company entitles the holder to
one vote. The agenda with the proposed resolutions for the
General Meeting and additional information will be made
available at
dpdhl.com / en / investors at the latest when the
General Meeting is convened. A detailed CV is published
for each Supervisory Board candidate put forth for election.
We assist our shareholders in exercising their voting rights
not only by making it possible to submit postal votes but
also by appointing company proxies, who cast their votes
solely as instructed to do so by the shareholders and who
can be reached during the General Meeting. Additionally,
shareholders can authorise company proxies, submit postal
votes and grant proxies to intermediaries and shareholder
associations attending the General Meeting via the com-
pany’s online service.
Remuneration of the Board of Management and
Supervisory Board
Most recently, the Annual General Meeting approved the
system of Board of Management remuneration in 2018 with
around 89 % of the votes cast. The remuneration system
continues to be applicable largely unchanged, as explained
in greater detail in the
Remuneration Report, page 17 ff. That
report also contains information regarding the remuner-
ation of the individual members of the Board of Manage-
ment and Supervisory Board. The remuneration system is
again scheduled to be presented for approval to the 2021
Annual General Meeting.
86
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
CONSOLIDATED FINANCIAL STATEMENTS
87 – 162
88
INCOME STATEMENT
88 STATEMENT OF COMPREHENSIVE
INCOME
89 BALANCE SHEET
90 CASH FLOW STATEMENT
92 STATEMENT OF CHANGES IN EQUITY
94 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS OF
DEUTSCHE POST AG
94 Basis of preparation
94
94
95
96
1
2
3
4
Basis of accounting
Consolidated group
Significant transactions
New developments in international
accounting under IFRS s
Currency translation
Accounting policies
Exercise of judgement in applying the
accounting policies
Consolidation methods
5
97
98
6
105 7
107 8
108 Segment reporting
108 9
Segment reporting
111 Income statement disclosures
111 10
112 11
112 12
112 13
113 14
113 15
114 16
114 17
115 18
116 19
116 20
Revenue by business unit
Other operating income
Changes in inventories and work performed
and capitalised
Materials expense
Staff costs / employees
Depreciation, amortisation and impairment
losses
Other operating expenses
Net finance costs
Income taxes
Earnings per share
Dividend per share
117 Balance sheet disclosures
117 21
119 22
120 23
120 24
Intangible assets
Property, plant and equipment
Investment property
Investments accounted for using the equity
method
Financial assets
Other assets
Deferred taxes
Inventories
Trade receivables
Cash and cash equivalents
Assets held for sale and liabilities associated
with assets held for sale
Issued capital and purchase of treasury shares
Capital reserves
Equity attributable to Deutsche Post AG
shareholders
121 25
121 26
122 27
122 28
122 29
122 30
123 31
123 32
125 33
125 34
125 35
127 36
133 37
135 38
136 39
Non-controlling interests
Provisions for pensions and similar obligations
Other provisions
Financial liabilities
Other liabilities
137 Lease disclosures
137 40
Lease disclosures
138 Cash flow disclosures
138 41
Cash flow disclosures
139 Other disclosures
139 42
150 43
Risks and financial instruments of the Group
Contingent liabilities and other financial
obligations
Litigation
Share-based payment
Related party disclosures
Auditor’s fees
Exemptions under the HGB and local foreign
legislation
Declaration of Conformity with the German
Corporate Governance Code
Significant events after the reporting date
and other disclosures
150 44
150 45
154 46
156 47
157 48
157 49
157 50
158 RESPONSIBILITY STATEMENT
158 INDEPENDENT AUDITOR’S REPORT
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
INCOME STATEMENT
STATEMENT OF
COMPREHENSIVE INCOME
FURTHER INFORMATION
INCOME STATEMENT
STATEMENT OF
COMPREHENSIVE INCOME
1 January to 31 December
€ m
Revenue
Other operating income
Changes in inventories and work performed and
capitalised
Materials expense
Staff costs
Depreciation, amortisation and impairment losses
Other operating expenses
Net income from investments accounted for using
the equity method
Profit from operating activities (EBIT)
Financial income
Finance costs
Foreign currency losses
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
10
11
12
13
14
15
16
24
17
18
19
19
2018
61,550
1,914
87
–31,673
–20,825
–3,292
– 4,597
–2
3,162
201
–750
–27
– 576
2,586
–362
2,224
2,075
149
1.69
1.66
2019
63,341
2,351
239
–32,070
–21,610
–3,684
– 4,431
– 8
4,128
194
– 846
–2
– 654
3,474
– 698
2,776
2,623
153
2.13
2.09
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
Reserve for equity instruments without recycling
Other changes in retained earnings
Income taxes relating to components of other compre-
hensive income
Share of other comprehensive income of investments
accounted for using the equity method, net of tax
Total, net of tax
Items that may be reclassified subsequently to profit or
loss
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 compre-
hensive income
Share of other comprehensive income of investments
accounted for using the equity method, net of tax
Total, net of tax
Other comprehensive income, net of tax
Total comprehensive income
attributable to Deutsche Post AG shareholders
attributable to non-controlling interests
Note
36
18
18
2018
2,224
191
– 4
0
–71
0
116
– 9
–31
74
0
13
2
49
165
2,389
2,243
146
2019
2,776
–1,068
–29
3
75
0
–1,019
– 4
7
243
30
–1
2
277
–742
2,034
1,882
152
88
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
BALANCE SHEET
FURTHER INFORMATION
BALANCE SHEET
€ m
ASSETS
Intangible assets
Property, plant and equipment
Investment property
Investments accounted for using the equity method
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
Note
31 Dec. 2018
31 Dec. 2019
Note
31 Dec. 2018
31 Dec. 2019
21
22
23
24
25
26
27
28
25
29
26
30
31
11,850
19,202
18
119
730
353
11,987
21,303
25
123
759
395
2,532
2,525
34,804
37,117
454
943
8,247
2,369
210
3,017
426
15,666
50,470
396
394
8,561
2,598
232
2,862
9
15,052
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 financial liabilities
Other non-current liabilities
Non-current provisions and liabilities
Current provisions
Current financial liabilities
Trade payables
52,169
Other current liabilities
Income tax liabilities
Liabilities associated with assets held for sale
Current provisions and liabilities
TOTAL EQUITY AND LIABILITIES
32
33
34
35
36
27
37
38
39
37
38
39
31
1,233
3,469
– 947
9,835
13,590
283
13,873
4,348
54
1,655
13,869
205
20,131
1,073
2,593
7,422
4,432
718
228
16,466
50,470
1,236
3,482
–700
10,099
14,117
275
14,392
5,102
56
1,650
13,736
360
20,904
964
3,238
7,225
4,913
519
14
16,873
52,169
89
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
CASH FLOW STATEMENT
FURTHER INFORMATION
CASH FLOW STATEMENT
1 January to 31 December
€ m
Consolidated net profit for the period
Income taxes
Net finance costs
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
Dividend received
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 from operating activities
Subsidiaries and other business units
Property, plant and equipment and intangible assets
Investments accounted for using the equity method and other investments
Other non-current financial assets
Proceeds from disposal of non-current assets
Subsidiaries and other business units
Property, plant and equipment and intangible assets
Investments accounted for using the equity method and other investments
Other non-current financial assets
Cash paid to acquire non-current assets
Interest received
Current financial assets
Net cash used in investing activities
Note
41
41
2018
2,224
362
576
3,162
3,292
–18
13
282
–75
2
– 579
6,079
–116
– 559
392
5,796
14
151
23
46
234
– 58
2019
2,776
698
654
4,128
3,684
– 465
– 57
– 506
101
3
– 843
6,045
36
– 498
466
6,049
702
138
0
51
891
–14
–2,649
–3,612
–39
–10
–2,756
52
–307
–2,777
– 8
– 6
–3,640
82
527
–2,140
90
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
CASH FLOW STATEMENT
FURTHER INFORMATION
Proceeds from issuance of non-current financial liabilities
Repayments of non-current financial liabilities
Change in current financial liabilities
Other financing activities
Cash paid for transactions with non-controlling interests
Dividend paid to Deutsche Post AG shareholders
Dividend paid to non-controlling interest shareholders
Purchase of treasury shares
Proceeds from issuing shares or other equity instruments
Interest paid
Net cash 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
41
30
2018
1,314
–2,284
–1
38
–3
–1,409
–124
– 44
0
– 526
–3,039
–20
– 65
–33
0
3,135
3,017
2019
349
–2,214
–105
40
– 5
–1,419
–150
–11
11
– 608
– 4,112
–203
15
33
0
3,017
2,862
91
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
STATEMENT OF CHANGES
IN EQUITY
FURTHER INFORMATION
STATEMENT OF CHANGES IN EQUITY
1 January to 31 December
€ m
Issued capital Capital reserves
32
1,224
33
3,327
3
–1
5
2
26
7
102
99
– 92
Note
Balance at 1 January 2018
Dividend
Transactions with non-controlling interests
Changes in non-controlling interests due to changes in
consolidated group
Issue / retirement of treasury shares
Purchase of treasury shares
Differences between purchase and issue prices of treasury shares
(share-based payment schemes)
Convertible bonds
Share-based payment schemes (issuance)
Share-based payment schemes (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 2018
1,233
3,469
Other reserves
Reserve for
equity
instruments
without
recycling
IAS 39
hedging reserve
19
0
–26
–7
11
0
–3
8
Equity
attributable
to Deutsche
Post AG
share holders
34
12,587
–1,409
Retained
earnings
9,034
–1,409
Currency
translation
reserve
–1,028
0
80
4
0
– 45
–7
66
2,075
117
0
– 948
9,835
Non-controlling
interests
Total equity
35
264
–125
– 4
2
0
12,851
–1,534
0
2
29
– 46
0
107
99
–24
4
0
29
– 46
0
107
99
–24
–1,240
–127
–1,367
2,075
80
117
–29
2,243
13,590
149
– 4
1
0
146
283
2,224
76
118
–29
2,389
13,873
92
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
STATEMENT OF CHANGES
IN EQUITY
FURTHER INFORMATION
Issued capital Capital reserves
IAS 39
hedging reserve
Other reserves
Reserve for
equity
instruments
without
recycling
Balance at 1 January 2019
1,233
3,469
Dividend
Transactions with non-controlling interests
Changes in non-controlling interests due to changes in
consolidated group
Issue of treasury shares
Purchase of treasury shares
Differences between purchase and issue prices of treasury shares
(share-based payment schemes)
Convertible bonds
Share-based payment schemes (issuance)
Share-based payment schemes (exercise)
Total comprehensive income
Consolidated net profit for the period
Currency translation differences
Change due to remeasurements of net pension provisions
Other changes
0
0
0
3
0
5
0
56
– 48
Balance at 31 December 2019
1,236
3,482
–7
0
8
0
2
– 5
–30
–22
Currency
translation
reserve
– 948
0
275
Equity
attributable
to Deutsche
Post AG
share holders
13,590
–1,419
Retained
earnings
9,835
–1,419
7
0
–10
– 5
56
2,623
– 990
2
Non-controlling
interests
Total equity
283
–155
–7
1
1
13,873
–1,574
0
1
1
–10
0
0
56
11
–1,355
–160
–1,515
7
0
0
–10
0
0
56
11
2,623
275
– 990
–26
1,882
153
0
–1
0
152
275
2,776
275
– 991
–26
2,034
14,392
93
– 673
10,099
14,117
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS OF
DEUTSCHE POST AG
Basis of preparation
Deutsche Post DHL Group is a global mail and logistics group.
The Deutsche Post and DHL corporate brands represent a port-
folio of logistics (DHL) and communication ( Deutsche Post) ser-
vices. The financial year of Deutsche Post AG and its consolidated
subsidiaries is the calendar year. Deutsche Post AG, whose reg-
istered office is in Bonn, Germany, is entered in the commercial
register of the Bonn Local Court under HRB 6792.
Basis of accounting
1
As a listed company, Deutsche Post AG prepared its consoli-
dated financial statements in accordance with section 315e
Handelsgesetzbuch (HGB – German Commercial Code) (“con-
solidated financial statements in accordance with International
Financial Reporting Standards”) in compliance with International
Financial Reporting Standards (IFRS s) and related Interpre-
tations of the International Accounting Standards Board (IASB)
as adopted in the European Union in accordance with Regula-
tion (EC) No 1606 / 2002 of the European Parliament and of the
European Council on the application of international accounting
standards.
The requirements of the standards applied have been sat-
isfied in full, and the consolidated 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 in-
come 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, various items in the balance sheet and in the in-
come statement have been combined. These items are disclosed
and explained separately in the notes. The income statement has
been classified in accordance with the nature of expense method.
The accounting policies and the explanations and dis-
closures in the notes to the IFRS consolidated financial statements
for financial year 2019 are generally based on the same account-
ing policies used in the 2018 consolidated financial statements.
Exceptions to this are the changes in international financial re-
note 4 that have been
porting under the IFRS s described in
required to be applied by the Group since 1 January 2019. The
accounting policies are explained in
note 6.
These consolidated financial statements were author-
ised for issue by a resolution of the Board of Management of
Deutsche Post AG dated 14 February 2020.
The consolidated financial statements are prepared in
euros (€). Unless otherwise stated, all amounts are given in
millions of euros (€ million, € m).
Consolidated group
2
The consolidated group includes all companies controlled by
Deutsche Post AG. Control exists if Deutsche Post AG has dec-
ision-making powers, is exposed, and has rights, to variable
returns, and is able to use its decision-making powers to affect
the amount of the variable returns. The Group companies are
consolidated from the date on which Deutsche Post DHL Group
is able to exercise control.
When Deutsche Post DHL Group holds less than the major-
ity of voting rights, other contractual arrangements may result
in the Group controlling the investee.
DHL Sinotrans International Air Courier Ltd. (Sinotrans),
China, is a significant company that has been consolidated de-
spite Deutsche Post DHL Group not having a majority of voting
rights. Sinotrans provides domestic and international express
delivery and transport services and has been assigned to the
Express segment. The company is fully integrated into the global
DHL network and operates exclusively for Deutsche Post DHL
Group. Due to the arrangements in the Network Agreement,
Deutsche Post DHL Group is able to prevail in decisions concern-
ing Sinotrans’ relevant activities. Sinotrans has therefore been
consolidated although Deutsche Post DHL Group holds no more
than 50 % of the company’s share capital.
The complete list of the Group’s shareholdings in accord-
ance with section 313(2) nos. 1 to 6 and (3) HGB may be viewed
on the company’s website
dpdhl.com/en/investors.
The companies listed in the following table are consoli-
dated in addition to the parent company Deutsche Post AG:
Consolidated group
Number of fully consolidated companies
(subsidiaries)
German
Foreign
Number of joint operations
German
Foreign
Number of investments accounted
for using the equity method
German
Foreign
2018
2019
127
616
1
0
1
18
81
617
1
0
1
18
In the reporting period, 46 German DHL Delivery companies
were merged into Deutsche Post AG. The disposal of companies
related to the sale of the supply chain business in China, Hong
Kong and Macau,
note 2.3. In addition, another 4.9 % interest in
Relais Colis SAS, France, which is accounted for using the equity
method, was acquired, as was the remaining 10 % interest in Ol-
impo Holding S. A., Brazil.
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2.1 Acquisitions, 2019
No significant companies were acquired in the financial year.
2.2 Contingent consideration
The following are the variable purchase prices for companies
acquired in prior years:
Contingent consideration
Company
Mitsafetrans S. r. l.
Suppla Group
Basis
EBITDA
EBITDA
1 Adjusted during 2018 due to reassessments.
Period for financial
years from / to
2016 to 2018
2018 to 2019
Results range
from / to
0 to 19 € m
0 to 10 € m 1
Fair value of total
obligation at the
acquisition date
Remaining
payment obligation
at 31 Dec. 2018
Remaining
payment obligation
at 31 Dec. 2019
15 € m
12 € m
5 € m
10 € m
–
–
A total of €8 million was paid for the Suppla Group in May 2019,
and €5 million was paid for Mitsafetrans S. r. l. in July 2019.
Deconsolidation effects
€ m
2.3 Deconsolidation effects in 2019
Gains are shown in other operating income; losses are reported
in other operating expenses.
Supply Chain
In mid-February 2019, Deutsche Post DHL Group sold its Supply
Chain business in China, Hong Kong and Macao to S. F. Holding,
China. The assets and liabilities of the companies in question had
previously been reported as held for sale. The table below shows
the effects of the disposal of twelve consolidated companies and
three companies accounted for using the equity method.
1 January to 31 December 2019
Non-current assets
of which goodwill
Current assets
Cash and cash equivalents
ASSETS
Non-current provisions and liabilities
Current provisions and liabilities
EQUITY AND LIABILITIES
Net assets
Cash consideration received
Losses from the currency translation reserve
Deconsolidation gain
Supply
Chain
business
in China
212
91
194
33
439
45
179
224
215
686
–32
439
Including transaction costs of €13 million, the net gain from dis-
posals amounted to €426 million. In addition, Deutsche Post DHL
Group will receive an annual revenue-based amount over a
period of ten years as part of a strategic partnership.
2.4 Joint operations
Joint operations are consolidated in accordance with IFRS 11,
based on the interest held.
Aerologic GmbH (Aerologic), Germany, a cargo airline domi-
ciled in Leipzig, is the only joint operation in this regard. It was
jointly established by Lufthansa Cargo AG and Deutsche Post
Beteiligungen Holding GmbH, which each hold 50 % of its cap-
ital and voting rights. Aerologic has been assigned to the Express
segment. Aerologic’s shareholders are simultaneously its cus-
tomers, giving them access to its freight aircraft capacity. Aer-
ologic mainly serves the DHL Express network from Monday to
Friday, and flies for the Lufthansa Cargo network at weekends.
In contrast to its capital and voting rights, the company’s assets
and liabilities, as well as its income and expenses, are allocated
based on this user relationship.
Significant transactions
3
In addition to the sale of the Supply Chain business in China,
note 2, the following significant transactions occurred:
We spent a net amount of €481 million on restructuring
measures as part of a profit improvement initiative in financial
year 2019. Of this amount, €234 million was attributable to
Post & Parcel Germany, €151 million to the Supply Chain div-
ision, €80 million to eCommerce Solutions and €16 million to
Corporate Functions.
In the third quarter of 2019, the Group began offering an
extended group of employees in Germany the option of taking
a lump-sum payment rather than receiving a lifetime pension
under our occupational pension arrangements. In the fourth
quarter, the eligible group of employees was expanded further.
Total income of €258 million was recognised in staff costs as a
result, driven by past service income of €271 million, which was
partly offset by additional current service cost.
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4
New developments in international accounting
under IFRS s
New accounting standards required to be applied
in financial year 2019
The following standards, changes to standards and interpreta-
tions must be applied from 1 January 2019:
Standard
Subject matter and significance
Amendments to IFRS 9, Financial Instruments: Prepayment Features
with Negative Compensation
The amendment clarifies how certain financial instruments with prepayment features are classified according to IFRS 9. The consolidated financial statements
were not be affected.
IFRIC 23, Uncertainty over Income Tax Treatments
IFRIC 23 clarifies the requirements for measuring and recognising uncertain income tax items. The Interpretation must be applied to the determination of
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments under IAS 12.
The interpretation had no material influence on the consolidated financial statements.
Amendments to IAS 28, Investments in Associates and Joint Ventures:
Long-term Interests in Associates and Joint Ventures
The amendments to IAS 28 clarify that IFRS 9 must be applied to long-term interests that, in substance, form part of the net investment in an associate or
joint venture to which the equity method is applied. The amendments had no effect on the consolidated financial statements.
Annual Improvements to IFRS s (2015 – 2017 Cycle)
Amendments to IAS 19, Employee Benefits – Plan Amendment,
Curtailment or Settlement
The amendments relate to IFRS 3, Business Combinations, and IFRS 11, Joint Arrangements, as well as IAS 12, Income Taxes, and IAS 23, Borrowing Costs.
The amendments had no effect on the consolidated financial statements.
The amendments specify the basis for determining the current service cost and net interest for the period between the change in a defined benefit retirement
plan and the end of the reporting period. As a result of the changes in occupational pension arrangements in Germany, for example, this had a minor impact
overall on the consolidated financial statements.
We voluntarily applied IFRS 16, Leases, early in 2018.
New accounting standards adopted by the EU but only
required to be applied in future periods
The following standards, changes to standards and interpreta-
tions have already been endorsed by the EU. However, they will
only be required to be applied in future periods.
Standard (issue date)
beginning on or after Subject matter and significance
Effective for financial years
Amendments to References to the
Conceptual Framework in IFRS
Standards (29 March 2018)
Amendments to IAS 1 and IAS 8 –
Definition of Material
(31 October 2018)
Interest Rate Benchmark Reform:
Amendments to IFRS 9, IAS 39 and
IFRS 7 (26 September 2019)
1 January 2020
The IASB has published a revised Conceptual Framework for Financial Reporting that is intended to be used to develop new standards and interpretations in
the future. In particular, the definitions of assets and liabilities as well as the guidance on measurement and derecognition, presentation and disclosures were
amended. This has not resulted in any technical amendments to current standards to date. The amendments merely update the references to the conceptual
framework in existing standards. The conceptual framework itself is not the subject of the endorsement procedure. This will not result in any changes.
1 January 2020
The amendments to IAS 1 and IAS 8 clarify the definition of “material”. Besides additional explanations, the definition of “material” in the conceptual framework
as well as all standards was aligned with the central definition now anchored in IAS 1. No material effects on the consolidated financial statements are expected.
1 January 2020
Entities can continue to use hedge accounting and designate new hedging relationships despite the expected replacement of various interest rate benchmarks.
No material effects on the consolidated financial statements are expected.
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New accounting standards not yet adopted by the EU
( endorsement procedure)
The IASB and the IFRIC issued further standards, amendments to
standards and interpretations in financial year 2019 and in pre-
vious years whose application is not yet mandatory for financial
year 2019. The application of these IFRS s is dependent on their
adoption by the EU.
Standard (issue date)
IFRS 17, Insurance Contracts (18 May 2017)
Amendments to IFRS 3, Business Combinations – Definition of a Business
(22 October 2018)
1 January 2020
Effective for financial years
beginning on or after Subject matter and significance
1 January 2021
IFRS 17 outlines the principles governing the recognition, measurement, presentation and disclosure of insurance contracts.
The objective of the standard is to ensure that the reporting entity provides relevant information that faithfully represents
those insurance contracts. This information gives users of financial statements better insights into the effects that insurance
contracts have on an entity’s net assets, financial position, results of operations and cash flows. The effects on the Group are
currently being assessed.
The amendments relate to the definition of a business and include clearer guidelines for distinguishing between a business
and a group of assets when applying IFRS 3. According to the amendments, the future definition of a business includes
having both economic resources and at least a substantial process which together are capable of generating output. Output
is deemed to be only the sale of goods and provision of services as well as the generation of capital and other income.
Alternatively, there is an option to apply a concentration test to assess whether an acquired set of activities and assets is not
a business. No material effects on the consolidated financial statements are expected.
Amendments to IAS 1, Classification of Liabilities as Current or
Non-current (23 January 2020)
1 January 2022
The amendments to IAS 1 relate solely to the presentation of debt and other liabilities in the statement of financial position.
They clarify that a liability must be classified as non-current if the entity has a right at the reporting date to defer settlement
of the liability for at least 12 months after the reporting date. The determining factor is that such a right exists; no intention
to exercise that right is required. No material effects on the consolidated financial statements are expected.
Currency translation
5
The financial statements of consolidated companies prepared
in foreign currencies are translated into euros (€) in accord-
ance with IAS 21 using the functional currency method. The
functional currency of foreign companies is determined by the
primary economic environment in which they mainly gener-
ate 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 closing rates. The resulting currency
translation differences are recognised in other comprehensive
income. In financial year 2019, currency translation differences
amounting to €275 million (previous year: €76 million) were
recognised in other comprehensive income, see the
statement
of comprehensive income.
Goodwill arising from business combinations after 1 Janu-
ary 2005 is treated as an asset of the acquired company and
therefore carried in the functional currency of the acquired
company.
The exchange rates for the currencies that are significant
for the Group were as follows:
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Currency
AUD
CNY
GBP
HKD
INR
JPY
SEK
USD
Country
Australia
China
United Kingdom
Hong Kong
India
Japan
Sweden
USA
Closing rates
Average rates
2018
1 EUR =
1.6224
7.8741
0.8947
8.9680
79.8994
125.8064
10.2418
1.1451
2019
1 EUR =
1.6006
7.8215
0.8510
8.7461
80.1796
121.8953
10.4491
1.1232
2018
1 EUR =
1.5834
7.8133
0.8860
9.2413
80.6204
129.9766
10.2955
1.1790
2019
1 EUR =
1.6084
7.7315
0.8758
8.7715
78.8033
121.9835
10.5827
1.1197
The carrying amounts of non-monetary assets recognised at sig-
nificant consolidated companies operating in hyperinflationary
economies are generally indexed in accordance with IAS 29 and
thus reflect the current purchasing power at the reporting 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 reporting date. Currency translation differences
are recognised in other operating income and expenses in the
income statement. In financial year 2019, income of €184 mil-
lion (previous year: €213 million) and expenses of €179 million
(previous year: €207 million) resulted from currency translation
differences. In contrast, currency translation differences relating
to net investments in a foreign operation are recognised in other
comprehensive income.
Accounting policies
6
Uniform accounting policies are applied to the annual financial
statements of the entities that have been included in the con-
solidated financial statements. The consolidated financial state-
ments 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 Group’s normal business operations consist
of the provision of logistics services comprising letter and parcel
dispatch in Germany, express delivery, freight transport, supply
chain management and e-commerce solutions. All income re-
lating to normal business operations is recognised as revenue
in the income statement. All other income is reported as other
operating income.
Revenue is recognised when control over the goods or ser-
vices transfers to the customer, i. e. when the customer has the
ability to control the use of the transferred goods or services pro-
vided and generally derive their remaining benefits. The require-
ment is that a contract with enforceable rights and obligations
exists and, amongst other things, the receipt of consideration
is likely, taking into account the customer’s credit quality. The
revenue corresponds to the transaction price to which the Group
is expected to be entitled. Variable consideration is included in
the transaction price when it is highly probable that a significant
reversal in the amount of revenue recognised will not occur and
to the extent that the uncertainty associated with the variable
consideration no longer exists. The Group does not expect to
have contracts where the period between the transfer of the
promised goods and / or services to the customer and payment
by the customer exceeds one year. Accordingly, the promised
consideration is not adjusted for the time value of money. For
each performance obligation, revenue is either recognised at a
certain time or over a certain period of time. The obligation to
perform transport services is fulfilled over a certain period of
time and revenue is recognised over the performance period.
The revenue generated by providing other logistics ser-
vices is recognised in the reporting period in which the service
was rendered.
Whenever third parties are involved in the performance of
a service, a distinction must be drawn between the principal and
agent. If Deutsche Post DHL Group serves as the principal, then
the gross amount of revenue is recognised. If the Group acts as
the agent, the net amount is recognised. The transaction price for
this specific service is limited to the amount of the commission to
be received. Deutsche Post DHL Group is generally the principal
when transport services are provided.
Operating expenses are recognised in income when the
service is utilised or when the expenses are incurred.
Intangible assets
Intangible assets, which comprise internally generated and pur-
chased intangible assets and purchased goodwill, are measured
at amortised cost.
Internally generated intangible assets are capitalised at
cost if it is probable that their production will generate an inflow
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of future economic benefits and the costs can be reliably meas-
ured. 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 intern-
ally developed software includes an appropriate share of allo-
cable production 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 produc-
tion 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 (excluding goodwill) are amortised
using the straight-line method over their useful lives. Impair-
ment losses are recognised in accordance with the principles
described in the section headed Impairment. The useful lives of
significant intangible assets are as follows:
indications of impairment. They generally include brand names
from business combinations and goodwill, for example. Impair-
ment testing is carried out in accordance with the principles de-
scribed in the section headed Impairment.
Property, plant and equipment
Property, plant and equipment is carried at cost, reduced by ac-
cumulated depreciation and valuation allowances. In addition to
direct costs, production cost includes an appropriate share of al-
locable 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
cannot 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
Useful lives
Internally developed software
Purchased software
Licences
Customer relationships
Years 1
up to 10
up to 5
term of
agreement
up to 20
Buildings
Technical equipment and machinery
Aircraft
IT equipment
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 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
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 special
factors such as time and location.
If there are indications of impairment, an impairment test must
be carried out; see section headed Impairment.
Impairment
At each reporting date, the carrying amounts of intangible assets,
property, plant and equipment and investment property are
reviewed for indications of impairment. If there are any such
indications, an impairment test is 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 (present
value of the pre-tax free cash flows expected to be derived from
the asset in future), whichever is higher. The discount rate used
for the value in use is a pre-tax rate of interest reflecting cur-
rent 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 inde-
pendently generates 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 re-
spect of the asset. If, after an impairment loss has been recog-
nised, 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 reversal 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 reversal
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
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losses. Purchased goodwill is therefore no longer amortised
and instead is tested for impairment annually in accordance
with IAS 36, regardless of whether any indication of possible
impairment exists, as in the case of intangible assets with an
indefinite useful life. In addition, the obligation remains to con-
duct an impairment test if there is any indication of impairment.
Goodwill resulting from company acquisitions is allocated to
the 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 purposes. 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 con-
nection 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.
Leases
A lease is a contract in which the right to use an asset (the leased
asset) is granted for an agreed-upon period in return for com-
pensation.
Since 1 January 2018, the Group as lessee has recognised
at present value assets for the right of use received and liabil-
ities for the payment obligations entered into for all leases in
the balance sheet. Lease liabilities include the following lease
payments:
• fixed payments, less lease incentives offered by the lessor;
• variable payments linked to an index or interest rate;
• expected residual payments from residual value guarantees;
• the exercise price of call options when exercise is estimated
to be sufficiently likely and
• contractual penalties for the termination of a lease if the
lease term reflects the exercise of a termination option.
Lease payments are discounted at the implicit interest rate
underlying the lease to the extent that this can be determined.
Otherwise, discounting is at the incremental borrowing rate.
Right-of-use assets are measured at cost, which comprises
the following:
• lease liabilities;
• lease payments made at or prior to delivery, less lease incen-
tives received;
• initial direct costs and
• restoration obligations.
Right-of-use assets are subsequently measured at amort-
ised cost. They are depreciated over the term of the lease using
the straight-line method.
The Group will make use of the relief options provided for
leases of low-value assets and short-term leases (shorter than
twelve months) and expense the payments in the income state-
ment according to the straight-line method. Additionally, the re-
quirements do not apply to leases on intangible assets. The Group
also exercises the option available for contracts comprising lease
components as well as non-lease components not to split these
components, except in the case of real estate and aircraft leases.
In addition, under IFRS 8 intra-group leases – in line with internal
management – are generally presented as operating leases in
segment reporting in accordance with IAS 17.
Extension and termination options exist for a number of
leases, particularly for real estate. Such contract terms offer
the Group the greatest possible flexibility in doing business. In
determining lease terms, all facts and circumstances offering
economic incentives for exercising extension options or not ex-
ercising termination options are taken into account. Changes due
to the exercise or non-exercise of such options are considered in
determining the lease term only if they are sufficiently probable.
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 received in the period
are shown under other operating income.
Where the Group is the lessor in a finance lease, it recog-
nises the assets as lease receivables in the amount of the net
investment in the balance sheet.
Investments accounted for using the equity method
Investments accounted for using the equity method cover asso-
ciates and joint ventures. These are recognised using the equity
method in accordance with IAS 28, Investments in Associates
and Joint Ventures. Based on the cost of acquisition at the time
of purchase of the investments, the carrying amount of the in-
vestment is increased or reduced annually to reflect the share of
earnings, dividends distributed and other changes in the equity
of the associates and joint ventures attributable to the invest-
ments of Deutsche Post AG or its consolidated subsidiaries. An
impairment loss is recognised on investments accounted for
using the equity method, including the goodwill in the carry-
ing amount of the investment, if the recoverable amount falls
below the carrying amount. Gains and losses from the disposal
of investments accounted for using the equity method, as well
as impairment losses and their reversals, are recognised in other
operating income or other operating expenses.
Financial instruments
A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of
another entity. Financial assets include in particular cash and cash
equivalents, trade receivables, originated loans and receivables,
and derivative financial assets. Financial liabilities include con-
tractual obligations to deliver cash or another financial asset to
another entity. These mainly comprise trade payables, liabilities
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to banks, liabilities arising from bonds and leases, and derivative
financial liabilities.
in other comprehensive income. Cumulative gains and losses
are reclassified to profit or loss when the financial asset is
derecognised.
Measurement
The Group measures financial assets at fair value plus the
transaction costs directly attributable to the acquisition of
these assets on initial recognition if they are not subsequently
measured at fair value through profit or loss. The transaction
costs of assets measured at fair value through profit or loss are
recognised as expenses. For financial liabilities measured ac-
cording to the fair value option, the part of the change in fair
value resulting from changes in the Group’s own credit risk is
recognised in other comprehensive income rather than in the
income statement.
Classification
Financial assets are classified in the measurement categories
below. The classification of debt instruments depends on the
business model used to manage the financial assets and their
contractual cash flows.
DEBT INSTRUMENTS AT AMORTISED COST
Debt instruments that are assigned to the “hold to collect con-
tractual cash flows” business model and whose cash flows ex-
clusively comprise interest and principal are measured and rec-
ognised at amortised cost. Interest income from these financial
assets is reported in financial income according to the effective
interest method.
DEBT INSTRUMENTS AT FAIR VALUE THROUGH OTHER
C OMPREHENSIVE INCOME (FVOCI)
Debt instruments assigned to the “hold to collect and sell” busi-
ness model must be measured and recognised at fair value.
Gains and losses from fair value measurement are recognised
DEBT INSTRUMENTS, DERIVATIVES AND EQUITY INSTRUMENTS
AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)
Debt instruments, derivatives and equity instruments acquired
to maximise their cash flows by selling them in the short to me-
dium term are assigned to the “sell” business model. They are
measured at fair value. The resulting measurement gains and
losses are reported in profit or loss.
EQUITY INSTRUMENTS CLASSIFIED AS FVOCI
Most of the equity instruments that the Group invests in for stra-
tegic reasons are assigned to the FVOCI measurement category.
They must be measured at fair value. The effects of any change in
the fair value of these equity instruments are recognised in other
comprehensive income. On derecognition, these effects are not
reclassified to profit or loss. Dividends from such instruments are
reported in other income in the income statement.
Impairment
As at 1 January 2018, the Group began making a forward-looking
assessment of the expected credit losses associated with its debt
instruments (expected credit loss model).
Expected credit loss (ECL) within the meaning of IFRS 9 is
an estimate of credit loss over the expected lifetime of a financial
instrument, weighted for the probability of default. A credit loss
is the difference between the contractual cash flows to which
the Group is entitled and the cash flows expected by the Group.
The expected credit loss takes into account the amount and tim-
ing of payments. Accordingly, a credit loss may also occur if the
Group expects payment to be made in full, but later than the
contractually agreed date.
The Group distinguishes between two types of financial
assets, both of which are subject to the ECL model: trade receiv-
ables and contract assets, on the one hand, and debt instruments
measured at amortised cost, on the other. Cash and cash equiva-
lents are also subject to the IFRS 9 impairment rules. However,
the impairment loss identified is not material.
ECL is generally measured at the level of individual items;
in exceptional cases, such as groups of receivables with the same
credit risk characteristics, it is measured collectively at portfolio
level. The Standard stipulates the three-stage “general approach”
to determining credit loss for this process. This does not include
trade receivables and contract assets.
In accordance with the three-stage model, debt instru-
ments measured at amortised cost are initially recognised in
Stage 1. The expected loss is equal to the loss that may occur
due to possible default events in the twelve months following the
reporting date. Financial assets that have experienced a signifi-
cant increase in counterparty credit risk since initial recognition
are transferred from Stage 1 to Stage 2. A “significant increase”
includes situations in which debtors are no longer able to meet
their payment obligations at short notice or when it appears that
the debtor has experienced an actual or expected deterioration
in business performance. The credit risk can then be measured
using the probability of default (PD) over the instrument’s
lifetime (lifetime PD). The impairment loss is equivalent to the
loss that may occur due to possible default events during the
remaining term of the financial asset. Assets must be transferred
from Stage 1 to Stage 2 when the contractual payments are
more than 30 days past due. If there is objective evidence that a
financial asset is impaired, it must be transferred to Stage 3. In
cases where payments are more than 90 days past due, there
is reason to believe that the debtor is experiencing significant
financial diffi culties. This constitutes objective evidence of a credit
loss. The financial asset must therefore be transferred to Stage 3.
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All debt instruments measured at amortised cost are consid-
ered to be at low risk of default. The impairment loss recognised
in the period was therefore limited to the twelve-month expected
credit loss. Management considers listed bonds to meet the cri-
teria for a low risk of default when they have been assigned an
investment-grade rating by at least one major rating agency. Other
instruments qualify for the low-default-risk category if the risk of
non-performance is low and the debtor is at all times in a position
to meet contractual payment obligations at short notice.
Trade receivables and contract assets are generally short-
term in nature and contain no significant financing components.
According to the simplified impairment approach in IFRS 9,
a loss allowance in an amount equal to the lifetime expected
credit losses must be recognised for all instruments, regardless
of their credit quality. The Group calculates the expected loss
using impairment tables for the individual divisions. The loss
estimate, documented by way of loss rates, encompasses all
of the available information, including historical data, current
economic conditions and reliable forecasts of future economic
conditions (macroeconomic factors).
Impairment losses on trade receivables and contract assets
are presented in other operating expenses. In turn, gains on the
reversal of impairment losses are presented in other operating
income.
Further details are presented in
note 42.
Derivatives and hedges
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.
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 unrecognised 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 recog-
nised 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 comprehen-
sive income, whilst the gain or loss attributable to the ineffect-
ive portion is recognised 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 42.
Recognition and derecognition
Regular way purchases and sales of financial assets are recog-
nised at the settlement date, with the exception of derivatives in
particular. A financial asset is derecognised when the rights to
receive the cash flows from the asset have expired or have been
transferred, and the Group has transferred essentially all risks
and opportunities of ownership.
Financial liabilities are derecognised if the payment obli-
gations arising from them have expired.
Netting
Financial assets and liabilities are set off on the basis of netting
agreements (master netting arrangements) only if there is an
enforceable right of set-off and settlement on a net basis is in-
tended 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 then creates only a conditional
right of set-off.
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 in the section headed
Impairment.
Inventories
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.
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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 present
condition and whose sale is highly probable. The sale must be ex-
pected 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 remeasurement of individual non-current assets or dis-
posal groups classified 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 discontinued 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 maturity
of up to three months; they are carried at their principal amount.
Overdraft facilities used are recognised in the balance sheet as
amounts due to banks.
Non-controlling interests
Non-controlling interests are the proportionate minority in-
terests 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 good-
will is allocated to the proportionate net assets.
Share-based payments to executives
Equity-settled share-based payment transactions are measured
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.
Cash-settled, share-based payments (Stock appreciation
rights, SARs) are measured on the basis of an option pricing
model in accordance with IFRS 2. The stock appreciation rights
are measured on each reporting date and on the settlement 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 recognised for the
same amount. Changes in value due to share price movements
occurring after the grant date are recognised as other finance
costs in net finance costs.
Retirement benefit plans
There are arrangements (plans) in many countries under which
the Group grants post-employment benefits to its employees.
These benefits include pensions, lump-sum payments on retire-
ment and other post-employment benefits and are referred to
in these disclosures as retirement benefits, pensions and similar
benefits, or pensions. A distinction must be made between de-
fined benefit and defined contribution plans.
THE GROUP’S DEFINED BENEFIT RETIREMENT PLANS
Defined benefit obligations are measured using the projected
unit credit method prescribed by IAS 19. This involves making
certain actuarial assumptions. Most of the defined benefit retire-
ment plans are at least partly funded via external plan assets. The
remaining net liabilities are funded by provisions for pensions
and similar obligations; net assets are presented separately as
pension assets. Where necessary, an asset ceiling must be applied
when recognising pension assets. With regard to the cost com-
ponents, the service cost is recognised in staff costs, net interest
cost in net finance costs and the remeasurements outside profit
and loss in other comprehensive income. Any rights to reimburse-
ment are reported separately in financial assets.
DEFINED CONTRIBUTION RETIREMENT PLANS FOR CIVIL
SERVANTS IN GERMANY
In accordance with statutory provisions, Deutsche Post AG
pays contributions for civil servants in Germany to retirement
benefit plans which are defined contribution retirement plans
for the company. These contributions are recognised in staff
costs.
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Under the provisions of the Gesetz zum Personalrecht der
Beschäftigten der früheren Deutschen Bundespost (PostPersRG –
Former Deutsche Bundespost Employees Act), Deutsche Post AG
provides retirement benefits and assistance benefits through
the Postbeamtenversorgungskasse (PVK – Postal civil servant
pension fund) at the Bundesanstalt für Post und Telekommunika-
tion (BAnst PT – German federal post and telecommunications
agency) to retired employees or their surviving dependants who
are entitled to benefits on the basis of a civil service appoint-
ment. The amount of Deutsche Post AG’s payment obligations
is governed by section 16 of the PostPersRG. This Act obliges
Deutsche Post AG to pay into the PVK 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 govern-
ment makes good the difference between the current payment
obligations of the PVK on the one hand, and the funding com-
panies’ current contributions or other return on assets on the
other, and guarantees that the PVK is able at all times to meet the
obligations it has assumed in respect of its funding companies.
Insofar as the federal government makes payments to the PVK
under the terms of this guarantee, it cannot claim reimburse-
ment from Deutsche Post AG.
DEFINED CONTRIBUTION RETIREMENT PLANS FOR THE GROUP’S
HOURLY WORKERS AND SALARIED EMPLOYEES
Defined contribution retirement plans are in place for the
Group’s hourly workers and salaried employees, particularly in
the UK, the USA and the Netherlands. The contributions to these
plans are also reported in staff costs.
This also includes contributions to certain multi-employer
plans which are basically defined benefit plans, especially in the
USA and the Netherlands. However, the relevant institutions do
not provide the participating companies with sufficient informa-
tion to use defined benefit accounting. The plans are therefore
accounted for as if they were defined contribution plans.
Regarding these multi-employer plans in the USA, con-
tributions are made based on collective agreements between
the employer and the local union, with the involvement of the
pension fund. There is no employer liability to any of the plans
beyond the bargained contribution rates except in the event of a
withdrawal meeting specified criteria, which could then include
a liability for other entities’ obligations as governed by US federal
law. The expected employer contributions to the funds for 2020
are €56 million (actual employer contributions in the reporting
period: €54 million, in the previous year: €47 million). Some of
the plans in which Deutsche Post DHL Group participates are
underfunded according to information provided by the funds.
No information is available to the Group that would indicate
any change from the contribution rates set by current collect-
ive agreements. Deutsche Post DHL Group does not represent a
significant level to any fund in terms of contributions, with the
exception of one fund where the Group represents the largest
employer in terms of contributions.
For one multi-employer plan in the Netherlands, cost
coverage- based contribution rates are set annually by the
management board of the pension fund with the involvement
of the Central Bank of the Netherlands; the contribution rates
are the same for all participating employers and employees.
There is no liability for the employer towards the fund beyond
the contributions set, even in the case of withdrawal or obliga-
tions not met by other entities. Any subsequent underfunding
ultimately results in the rights of members being cut and / or no
indexation of their rights. The expected employer contributions
to the fund for 2020 are €23 million (actual employer contribu-
tions in the reporting period: €23 million, in the previous year:
€22 million). As at 31 December 2019, the coverage degree of
plan funding was above 100 %, but below a required minimum of
approximately 105 %, according to information provided by the
fund. Deutsche Post DHL Group does not represent a significant
portion of the fund in terms of contributions.
Other provisions
Other provisions are recognised for all legal or constructive ob-
ligations to third parties existing at the reporting 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 –0.20 % and 7.50 % (previous year:
0.0 % and 11.50 %). The effects arising from changes in interest
rates are recognised in net financial income / net finance cost.
Provisions for restructurings are only established in ac-
cordance with the aforementioned criteria for recognition if a
detailed, formal restructuring plan has been drawn up and com-
municated 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 obligations in respect of actual claims or known incidents ex-
pected 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 insur-
ers. IBNR reserves represent estimates of obligations in respect
of incidents taking place on or before the reporting date that
have not been reported to the company. Such reserves also
include provisions for potential errors in settling outstanding
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loss reserves. The company carries out its own assessment of
ultimate loss liabilities using actuarial methods and also com-
missions 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.
Disclosures on financial liabilities under leases can be
found in the section headed Leases.
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 ar-
rangements. 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 ef-
fective 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 component in accordance with IAS 32.31. The conversion
right is classified 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 calculated 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.
Most of the trade payables have a maturity of less than one year.
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 tem-
porary differences between the carrying amounts in the IFRS fi-
nancial 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 carryfor-
wards and which are likely to be realised. The recoverability of
the tax reduction claims is assessed on the basis of each entity’s
earnings projections, which are derived from the Group projec-
tions and take any tax adjustments into account. The planning
horizon is five years.
In compliance with IAS 12.24 (b) and IAS 12.15 (b), deferred
tax assets or liabilities were only recognised for temporary dif-
ferences 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 on tax loss carryforwards can be found in
note 27.
In accordance with IAS 12, deferred tax assets and liabili-
ties are calculated using the tax rates applicable in the individual
countries at the reporting date or announced for the time when
the deferred tax assets and liabilities are realised. The tax rate
applied to German Group companies is unchanged at 30.5 %. It
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
companies amount to up to 38 % (previous year: 39 %).
Income taxes
Income tax assets and liabilities are recognised when they are
probable. They are measured at the amounts for which repay-
ments from, or payments to, the tax authorities are expected to be
received or made. If uncertain tax items are recognised because
they are probable, they are measured at their most likely amount.
Tax-related fines are recognised in income taxes if they are in-
cluded in the calculation of income tax liabilities, due to their in-
clusion in the tax base and / or tax rate. All income tax assets and
liabilities are current and have maturities of less than one year.
Contingent liabilities
Contingent liabilities represent possible obligations whose ex-
istence 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 can-
not be measured with sufficient reliability. In accordance with
IAS 37, contingent liabilities are not recognised in the balance
sheet;
note 43.
7
Exercise of judgement in applying the accounting
policies
The preparation of IFRS-compliant consolidated financial state-
ments 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.
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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 present condition and whether their sale is highly probable.
If that is the case, the assets and associated liabilities must be
measured and recognised as assets held for sale or 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 contin-
gent 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 connec-
tion with the Group’s defined benefit retirement plans can be
found in
note 36.
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 estimate made could have an effect on tax liabilities and
deferred taxes in the period in which the matter is finally decided.
The amount recognised for deferred tax assets could be reduced if
the estimates of planned taxable income or 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 important estimates this requires is the determination of the
fair values of these assets and liabilities at the date of acquisi-
tion. 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 in-
tangible 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
about 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 cal-
culated. This amount is the higher of fair value less costs to sell
and value in use. Determining value in use requires assumptions
and estimates to be made with respect to forecast future cash
flows and the discount rate applied. Although management be-
lieves that the assumptions made for the purpose of calculating
the recoverable amount are appropriate, possible unforsee-
able changes in these assumptions – e. g. a reduction in the EBIT
margin, an increase 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.
Pending legal proceedings in which the Group is involved
are disclosed in
note 44. The outcome of these proceedings
could have a significant effect on the net assets, financial pos-
ition and results of operations of the Group. Management regu-
larly analyses the information currently available about these
proceedings and recognises provisions for probable obligations
including estimated legal costs. Internal and external legal ad-
visers participate in making this assessment. In deciding on the
necessity for a provision, management takes into account the
probability of an unfavourable outcome and whether the amount
of the obligation can be estimated with sufficient reliability. The
fact that an action has been launched or a claim asserted against
the Group, or that a legal dispute 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 reporting date.
For the purpose of estimating the future development of the
business, a realistic assessment was also made at that date of
the economic environment likely to apply in the future to the dif-
ferent sectors and regions in which the Group operates. For ex-
ample, Brexit could affect the Group’s net assets, financial posi-
tion and results of operations, see
Combined Management Report,
Opportunities and risks, page 67. In the event of developments in this
general environment that diverge from the assumptions made,
the actual amounts may differ from the estimated amounts. In
such cases, the assumptions made and, where necessary, the
carrying amounts of the relevant assets and liabilities are ad-
justed accordingly.
At the date of preparation of the consolidated financial
statements, 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 significant adjustments in financial year 2020
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companies that are consolidated fully or on a proportionate basis
are eliminated. Intercompany profits or losses from intra-group
deliveries and services not realised by sale to third parties are
eliminated. Unrealised gains and losses from business transac-
tions with investments accounted for using the equity method
are eliminated on a proportionate basis.
to the carrying amounts of the assets and liabilities recognised
in the financial statements.
Consolidation methods
8
The consolidated financial statements are based on the IFRS
financial statements of Deutsche Post AG and the subsidiaries,
joint operations and investments accounted for using the equity
method included in the consolidated financial statements and
prepared in accordance with uniform accounting policies as at
31 December 2019.
Acquisition accounting for subsidiaries included in the con-
solidated financial statements uses the purchase method of ac-
counting. The cost of the acquisition corresponds to the fair value
of the assets given up, the equity instruments issued and the
liabilities 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.
The assets and liabilities, as well as income and expenses,
of joint operations are included in the consolidated financial
statements in proportion to the interest held in these operations,
in accordance with IFRS 11. Accounting for the joint operators’
share of the assets and liabilities, as well as recognition and
measurement of goodwill, use the same methods as applied to
the consolidation of subsidiaries.
In accordance with IAS 28, joint ventures and 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 recognised
under investments accounted for using the equity method.
In the case of step acquisitions, the equity portion previously
held is remeasured at the fair value applicable on the date of ac-
quisition and the resulting gain or loss recognised in profit or loss.
Intra-group revenue, other operating income, and ex-
penses as well as receivables, liabilities and provisions between
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Segment reporting
9
Segment reporting
Segments by division
€ m
Post & Parcel
Germany 1
Express
Global Forwarding,
Freight
Supply Chain
Solutions 1 Corporate Functions
Consolidation 1, 2
Group
eCommerce
1 Jan. to 31 Dec.
External revenue
Internal revenue
Total revenue
2018
2019
2018
2019
2018
2019
2018
2019
14,766
15,099
15,775
16,734
14,063
14,175
13,201
13,332
342
385
372
367
915
953
149
104
15,108
15,484
16,147
17,101
14,978
15,128
13,350
13,436
Profit / loss from operating activities (EBIT)
683
1,230
1,957
2,039
442
521
520
912
2018
3,578
256
3,834
–27
2019
3,852
193
4,045
– 51
2018
167
1,457
1,624
– 414
2019
149
1,328
1,477
– 521
of which net income / loss from investments
accounted for using the equity method
0
0
–1
1
1
–2
1
3
–3
– 5
0
– 5
2018
2019
2018
2019
0
0
61,550
63,341
–3,491
–3,330
0
0
–3,491
–3,330
61,550
63,341
1
0
–2
0
3,162
4,128
–2
– 8
Segment assets
5,577
5,949
13,766
15,640
8,728
8,714
8,248
7,854
1,750
1,723
4,935
5,495
– 96
– 84
42,908
45,291
of which investments accounted for using
the equity method
Segment liabilities
Net segment assets / liabilities
Capex (assets acquired)
Capex (right-of-use assets)
Total capex
Depreciation and amortisation
Impairment losses
Total depreciation, amortisation and
impairment losses
Other non-cash income (–) and expenses (+)
0
2,311
3,266
0
2,724
3,225
33
34
3,635
3,801
10,131
11,839
24
3,105
5,623
22
3,058
5,656
620
1
621
293
10
303
530
469
29
498
343
0
343
182
1,190
739
1,929
1,151
1
1,152
273
2,080
940
3,020
1,314
0
1,314
316
110
158
268
238
0
238
66
114
159
273
254
0
254
26
12
3,229
5,019
282
805
14
3,127
4,727
323
701
1,087
1,024
821
5
826
204
867
30
897
206
30
589
32
629
1,161
1,094
21
1,520
3,415
166
175
341
151
0
151
26
132
126
258
201
12
213
61
290
518
808
623
0
623
74
21
1,530
3,965
502
772
1,274
662
1
663
85
Employees 3
159,032
159,100
93,550
96,850
43,347
44,265
151,877
155,791
29,493
30,797
12,272
12,659
–1
–75
–21
–10
1
– 9
–1
0
–1
–7
0
0
– 62
–22
119
123
14,314
14,807
28,594
30,484
–3
0
–3
–1
1
0
–1
–1
2,648
2,397
5,045
3,276
16
3,292
1,166
3,617
2,727
6,344
3,640
44
3,684
875
489,571
499,461
1 Prior-period amounts adjusted. 2 Including rounding. 3 Average FTEs.
Adjustment of prior-period amounts
Effective as of 1 January 2019, the Post - eCommerce - Parcel
division was split into a German and an international division,
each led by a separate member of the Board of Management. The
German business was renamed Post & Parcel Germany and the
international business is now called eCommerce Solutions. The
prior-period amounts were adjusted accordingly.
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NOTES
FURTHER INFORMATION
Information about geographical regions
€ m
1 Jan. to 31 Dec.
External revenue
Non-current assets
Capex
Germany
Europe
(excluding Germany)
Americas
Asia Pacific
Other regions
2018
2019
18,759
19,040
9,229
1,658
9,949
2,160
2018
18,464
10,065
1,333
2019
18,807
10,342
1,323
2018
2019
2018
2019
11,163
11,841
10,766
11,040
6,740
1,333
7,695
1,997
4,563
594
4,842
649
2018
2,398
524
127
2019
2,613
639
215
2018
61,550
31,121
5,045
Group
2019
63,341
33,467
6,344
9.1 Segment reporting disclosures
Deutsche Post DHL Group reports five operating segments for
financial year 2019; these are managed independently by the
responsible segment management bodies in line with the prod-
ucts 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 Group’s top management.
External revenue is the revenue generated by the div-
isions from non-Group third parties. Internal revenue is revenue
generated 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.
The expenses for 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 obli-
gation (nationwide retail outlet network, delivery every working
day), and from its obligation to assume the compensation struc-
ture as the legal successor to Deutsche Bundespost, are allocated
to the Post & Parcel Germany division.
In keeping with internal reporting, capital expenditure
(capex) is disclosed. Additions to intangible assets net of good-
will and to property, plant and equipment, including right-of-use
assets, are reported in the capex figure. Depreciation, amort-
isation and impairment losses relate to the segment assets al-
located to the individual divisions. Other non-cash income and
expenses relate primarily to expenses from the recognition of
provisions.
The profitability of the Group’s operating divisions is meas-
ured using profit / loss from operating activities (EBIT).
9.2 Segments by division
Reflecting the Group’s predominant organisational structure, the
primary reporting format is based on the divisions. The Group
distinguishes between the following divisions:
Post & Parcel Germany
The Post & Parcel Germany division transports, sorts and de-
livers documents and goods in and outside of Germany. This also
includes digital transmissions such as information on shipment
status and digital messages.
Express
The Express division offers time-definite courier and express
services to business and private customers. The division com-
prises the Europe, Americas, Asia Pacific and MEA (Middle East
and Africa) regions.
Global Forwarding, Freight
The activities of the Global Forwarding, Freight division comprise
the transport of goods by road, air and sea. The division’s busi-
ness units are Global Forwarding and Freight.
Supply Chain
The Supply Chain division delivers customised supply chain solu-
tions to its customers based on globally standardised modular
components including warehousing, transport and value-added
services.
eCommerce Solutions
The eCommerce Solutions division is home to the Group’s inter-
national parcel delivery business. Core activities include parcel
delivery within selected countries in Europe, the United States
and Asia as well as cross-border non-TDI services, especially to,
from, and within Europe.
In addition to the reported segments shown above, segment
reporting comprises the following categories:
Corporate Functions
Corporate Functions comprises Corporate Center / Other and
Corporate Incubations. Corporate Center / Other includes Global
Business Services (GBS), the Corporate Center, non-operating
activities and other business activities. The profit / loss gener-
ated by GBS is allocated to the operating segments, whilst its
109
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NOTES
FURTHER INFORMATION
assets and liabilities remain with GBS (asymmetrical allocation).
The Corporate Incubations board department is an incubator for
mobility solutions, digital platforms, automation and other tech-
nological innovations.
Consolidation
The data for the divisions is presented following consolidation of
interdivisional transactions. The transactions between the div-
isions are eliminated in the Consolidation column.
Information about geographical regions
9.3
The main geographical regions 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
individual 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.
9.4 Reconciliation of segment amounts
Reconciliation of segment amounts to
consolidated amounts
Reconciliation to the income statement
€ m
External revenue
Internal revenue
Total revenue
Other operating income
Changes in inventories and work
performed and capitalised
Materials expense
Staff costs
Depreciation, amortisation and
impairment losses
Other operating expenses
Net loss from investments accounted
for using the equity method
Profit / loss from operating activities
(EBIT)
Net 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-period amounts adjusted.
2 Including rounding.
Corporate Functions
Group / Consolidation 1, 2
Consolidated amount
Reconciliation to
Total for reported
segments 1
2018
61,383
2,034
63,417
1,955
2019
63,192
2,002
65,194
2,340
–176
–33,901
–19,849
39
–34,365
–20,578
–2,670
– 5,199
–3,021
– 4,955
2018
167
1,457
1,624
1,553
70
–1,336
– 986
– 623
–716
2019
149
1,328
1,477
1,570
174
–1,300
–1,042
– 663
–732
2018
0
–3,491
–3,491
–1,594
193
3,564
10
1
–2
–3
0
– 5
3,575
4,651
– 414
– 521
0
1,318
1,256
0
1
0
–2
2019
2018
2019
0
61,550
63,341
–3,330
–3,330
–1,559
0
61,550
1,914
0
63,341
2,351
26
87
239
3,595
–31,673
–32,070
10
–20,825
–21,610
–3,292
– 4,597
–3,684
– 4,431
–2
– 8
3,162
– 576
2,586
–362
2,224
2,075
149
4,128
– 654
3,474
– 698
2,776
2,623
153
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NOTES
FURTHER INFORMATION
The following table shows the reconciliation of Deutsche Post DHL
Group’s total assets to the segment assets. Financial assets, in-
come tax assets, deferred taxes, cash and cash equivalents and
other asset components are deducted.
The following table shows the reconciliation of Deutsche Post DHL
Group’s total liabilities to the segment liabilities. Components of
the provisions and liabilities as well as income tax liabilities and
deferred taxes are deducted.
Income statement disclosures
10 Revenue by business unit
Reconciliation to segment assets
Reconciliation to segment liabilities
Non-current provisions and liabilities
–18,909
–19,372
Global Forwarding, Freight
€ m
Post & Parcel Germany 1
2018
2019
50,470
52,169
–13,873
–14,392
Post
Parcel
Other
36,597
37,777
Express
–3,374
14,314
1,520
12,869
–75
–3,598
14,807
1,530
13,339
– 62
Global Forwarding
Freight
Supply Chain
eCommerce Solutions 1
Corporate Functions
Total revenue
2018
2019
14,766
15,099
9,344
5,333
89
15,775
14,063
10,430
3,633
13,201
3,578
167
9,201
5,816
82
16,734
14,175
10,484
3,691
13,332
3,852
149
61,550
63,341
€ m
Total equity and liabilities
Investment property
Non-current financial assets
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 Functions
Total for reported segments 1
Consolidation 1, 2
1 Prior-period amounts adjusted.
2 Including rounding.
2018
2019
€ m
50,470
52,169
Total equity and liabilities
–18
– 582
–260
–25
– 594
–242
Equity
Consolidated liabilities
–2,532
–2,525
Current provisions and liabilities
–210
–13
– 930
–3,017
42,908
4,935
38,069
– 96
–232
–20
–378
–2,862
45,291
5,495
39,880
– 84
Segment liabilities
of which Corporate Functions
Total for reported segments 1
Consolidation 1, 2
1 Prior-period amounts adjusted.
2 Including rounding.
1 Prior-period amounts adjusted due to new segment structure,
note 9.
This includes revenue from performance obligations in the
amount of €10 million (previous year: €13 million) settled in prior
periods. The change in revenue was due to the following factors:
Factors affecting revenue, 2019
€ m
Organic growth
Portfolio changes 1
Currency translation effects
Total
1
Notes 2 and 41.
1,427
–382
746
1,791
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NOTES
FURTHER INFORMATION
The allocation of revenue to geographical regions is presented
in the segment reporting.
Income from the disposal of assets increased, in particular due to
the sale of the Supply Chain business in China,
note 2.
11 Other operating income
€ m
Income from the disposal of assets
Insurance income
Income from the remeasurement of liabilities
Income from currency translation
Reversals of impairment losses on
receivables and other assets
Income from the reversal of provisions
Income from fees and reimbursements
Commission income
Operating lease income
Sublease income
Income from prior-period billings
Income from loss compensation
Income from derivatives
Recoveries on receivables previously
written off
Subsidies
Income from the derecognition of liabilities
Subsidies relate to grants for the purchase or production of
assets. The grants are reported as deferred income and recog-
nised in the income statement over the useful lives of the assets.
Miscellaneous other operating income includes a large
2018
2019
number of smaller individual items.
101
219
134
213
125
200
127
99
49
37
54
27
62
17
16
15
525
247
197
184
140
124
124
80
68
50
42
31
23
18
18
18
12 Changes in inventories and work performed
and capitalised
€ m
Changes in inventories –
income (+) / expense (–)
Work performed and capitalised
Total
2018
2019
–222
309
87
–130
369
239
Changes in inventories relate mainly to real estate development
projects and the production of StreetScooter electric vehicles.
Work performed and capitalised was attributable primarily to
StreetScooter GmbH.
Miscellaneous
Total
419
1,914
462
2,351
13 Materials expense
€ m
Cost of raw materials, consumables and
supplies, and of goods purchased and held
for resale
Aircraft fuel
Fuel
Packaging material
Goods purchased and held for resale
Spare parts and repair materials
Office supplies
Other expenses
Cost of purchased services
Transport costs
Cost of temporary staff and services
Maintenance costs
Lease expenses
Short-term leases
Leases (incidental expenses)
Low-value asset leases
Variable lease payments
IT services
Commissions paid
Other purchased services
Materials expense
2018
2019
1,478
1,452
797
435
241
113
71
379
800
481
265
124
71
412
3,514
3,605
21,462
21,928
2,347
1,277
2,244
1,347
664
56
46
33
604
590
544
72
54
22
589
581
1,080
28,159
31,673
1,084
28,465
32,070
The increase in materials expense resulted from currency effects
and higher transport costs.
A total of €188 million (previous year: €257 million) of the
other expenses included in the cost of raw materials, consum-
ables and supplies, and of goods purchased and held for resale,
relates to the production of electric vehicles.
The other expenses item includes a large number of indi-
vidual items.
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NOTES
FURTHER INFORMATION
14 Staff costs / employees
The average number of Group employees in the reporting
15 Depreciation, amortisation and impairment losses
period, broken down by employee group, was as follows:
€ m
Wages, salaries and compensation
Social security contributions
Retirement benefit expenses
Expenses for other employee benefits
2018
16,840
2,522
846
617
2019
17,399
2,656
688
867
Staff costs
20,825
21,610
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 financial year. The rise was largely due to
salary increases and new hires as well as expenses for the early
retirement programme in the Post & Parcel Germany division.
Social security contributions relate, in particular, to statu-
tory social security contributions paid by employers.
Retirement benefit expenses include the service cost re-
lated to the defined benefit retirement plans. These expenses
also include contributions to defined contribution retirement
plans for civil servants in Germany in the amount of €409 million
(previous year: €449 million), as well as for the Group’s hourly
workers and salaried employees, totalling €347 million (previous
note 6. For information on the decline in
year: €307 million),
retirement benefit expenses, see
note 36.
Employees
Headcount
Headcount (annual average)
Hourly workers and salaried employees
Civil servants
Trainees
Total
Full-time equivalents 1
As at 31 December
Average for the year
1 Including trainees.
2018
2019
499,943
512,325
28,718
5,709
26,296
5,661
534,370
544,282
504,902
489,571
504,781
499,461
The employees of companies acquired or disposed of during the
financial year were included rateably. The number of full-time
equivalents at joint operations included in the consolidated fi-
nancial statements as at 31 December 2019 amounted to 326
on a proportionate basis (previous year: 276).
€ m
Amortisation of and impairment losses on
intangible assets (excluding goodwill),
of which impairment loss: 1 (previous year: 2)
Depreciation of and impairment losses on
property, plant and equipment acquired,
of which impairment losses: 20
(previous year: 4)
Land and buildings
Technical equipment and machinery
Transport equipment
Aircraft
IT equipment
Operating and office equipment
Advance payments and assets under
development
Investment property
Depreciation of and impairment losses on
right-of-use assets,
of which impairment losses: 19
(previous year: 10)
2018
2019
195
211
182
319
234
266
138
86
1
0
207
379
276
327
144
94
0
2
1,226
1,429
Land and buildings
1,325
1,451
Technical equipment and machinery
Transport equipment
Aircraft
IT equipment
Investment property
Impairment of goodwill
Depreciation, amortisation and
impairment losses
45
195
304
1
1
52
224
310
1
2
1,871
2,040
0
4
3,292
3,684
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FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The depreciation, amortisation and impairment losses item in-
cludes impairment losses totalling €44 million as follows:
16 Other operating expenses
Impairment losses
€ m
Post & Parcel Germany
Intangible assets
Acquired property, plant and equipment
Right-of-use assets
Express
Acquired property, plant and equipment
Supply Chain
Intangible assets
Acquired property, plant and equipment
Right-of-use assets
eCommerce Solutions
Intangible assets
Acquired property, plant and equipment
Right-of-use assets
Corporate Functions
Right-of-use assets
Consolidation (including rounding)
2018
2019
2
2
6
1
0
1
4
0
0
0
0
0
0
0
0
0
3
19
8
1
1
10
1
1
44
Impairment losses
16
Impairment losses in the Supply Chain segment related mainly
(€21 million) to the non-current assets of the power pack aging
business in the United States, which was sold in the fourth
quarter of 2019. Another €12 million related to the disposal
of assets as part of the strategic partnership with Austrian
Post ( eCommerce Solutions segment). In the previous year,
€10 million of the impairment losses was attributable to All you
need GmbH, which was reclassified to assets held for sale and
liabilities associated with assets held for sale.
€ m
Cost of purchased cleaning and security
services
Warranty expenses, refunds and
compensation payments
Expenses for advertising and public relations
Travel and training costs
Other business taxes
Write-downs of current assets
Telecommunication costs
Office supplies
Entertainment and corporate hospitality
expenses
Insurance costs
Currency translation expenses
Services provided by the Bundesanstalt für
Post und Telekommunikation (German
federal post and telecommunications
agency)
Customs clearance-related charges
Consulting costs (including tax advice)
Voluntary social benefits
Legal costs
Monetary transaction costs
Losses on disposal of assets
Commissions paid
Contributions and fees
Audit costs
Donations
Expenses from prior-period billings
Expenses from derivatives
Miscellaneous
Total
2018
2019
411
346
374
348
263
239
213
183
185
326
207
182
134
132
103
67
62
72
56
106
34
22
30
29
442
388
371
350
280
239
220
202
188
184
179
152
149
111
86
70
70
67
59
54
34
20
17
8
473
4,597
491
4,431
For reasons of transparency, the disclosure of personal insur-
ance expenses was standardised as staff costs in the reporting
period. Insurance expenses declined by €195 million.
Miscellaneous other operating expenses include part of the
restructuring expenses for Post & Parcel Germany, Supply Chain
and eCommerce Solutions.
Taxes other than income taxes are either recognised in the
related expense item or, if no specific allocation is possible, in
other operating expenses.
Miscellaneous other operating expenses include a large
number of smaller individual items.
17 Net finance costs
€ m
Financial income
Interest income
Gains on changes in fair value of financial
assets
Other financial income
Finance costs
Interest expense from unwinding discounts
on provisions
Interest expense on leases
Other interest expenses
Losses on changes in fair value of financial
assets
Other finance costs
Foreign currency losses
Net finance costs
2018
2019
64
63
74
201
– 98
–376
–155
– 89
–32
–750
–27
– 576
100
80
14
194
–113
– 416
–172
– 92
– 53
– 846
–2
– 654
114
Deutsche Post DHL Group – 2019 Annual Report
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GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The deterioration in net finance costs resulted mainly from
higher interest expense on leases and lower income from stock
appreciation rights (SAR s).
The expense from the unwinding of discounts on bonds
resulting from the application of the effective interest method
amounted to €12 million (previous year: €12 million).
Interest income and interest expenses result from financial
assets and liabilities that were not measured at fair value through
profit or loss.
Information on unwinding discounted net pension provi-
sions can be found in
note 36.
18
Income taxes
€ m
Current income tax expense
Current recoverable income tax
Deferred tax expense (previous year: income)
from temporary differences
Deferred tax expense (previous year: income)
from tax loss carryforwards
Income taxes
2018
– 697
14
– 683
2019
–704
71
– 633
127
– 56
194
321
–362
– 9
– 65
– 698
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
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 from previous years on current taxes
Tax-exempt income and non-deductible
expenses
Differences in tax rates at foreign companies
Income taxes
2018
2,586
–789
2019
3,474
–1,060
12
32
337
176
171
–34
–149
90
–362
188
39
–173
100
– 698
The difference from deferred tax assets not recognised for initial
differences is due to differences between the carrying amounts
in the opening tax accounts of Deutsche Post AG and the car-
rying amounts in the IFRS financial statements as at 1 Janu-
ary 1995 (initial differences). 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 original IFRS carrying amounts, net
of accumulated depreciation or amortisation, and the tax base
amounted to €139 million as at 31 December 2019 (previous
year: €245 million).
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
foreign companies not recognised for tax loss carryforwards and
temporary differences relate primarily to the Americas region.
Effects from deferred tax assets not recognised for tax
loss carryforwards and temporary differences in the amount of
€3 million (previous year: €4 million) relate to the reduction of
the effective income tax expense due to the utilisation of tax loss
carryforwards and temporary differences, for which deferred
tax assets had previously not been recognised. In addition, the
recognition of deferred tax assets previously not recognised for
tax loss carryforwards and of deductible temporary differences
from a prior period (and resulting mainly from the Americas
region) reduced the deferred tax expense by €391 million (pre-
vious year: €526 million). Effects from unrecognised deferred
tax assets amounting to €3 million (previous year: €13 million)
were due to a valuation allowance recognised for a deferred tax
asset. Other effects from unrecognised deferred tax assets relate
primarily to tax loss carryforwards for which no deferred taxes
were recognised.
A deferred tax asset in the amount of €11 million was rec-
ognised in the balance sheet for companies 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 2019, there were no changes in tax rates
affecting German Group companies. Tax rate changes in some
tax jurisdictions abroad also had no material effects. The effect-
ive income tax expense includes prior-period tax income from
German and foreign companies in the amount of €39 million (tax
income) (previous year: expense of €34 million).
The following table presents the tax effects on the compo-
nents of other comprehensive income:
115
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Other comprehensive income
Basic earnings per share
€ m
Before
taxes
Income
taxes
After
taxes
Consolidated net profit for the period attributable to Deutsche Post AG shareholders
€ m
2018
2,075
2019
2,623
2019
Change due to
remeasurements of
net pension provisions
IAS 39 hedging reserve
Reserve for equity instruments
without recycling
Currency translation reserve
Other changes in retained
earnings
Share of other comprehensive
income of investments
accounted for using the equity
method
–1,068
3
–29
273
3
2
Other comprehensive income
– 816
2018
Change due to
remeasurements of
net pension provisions
IAS 39 hedging reserve
Reserve for equity instruments
without recycling
Currency translation reserve
Share of other comprehensive
income of investments
accounted for using the equity
method
Other comprehensive income
191
– 40
– 4
74
2
223
77
–1
–1
0
–1
0
74
–73
14
1
0
0
– 58
– 991
2
–30
273
2
2
–742
118
–26
–3
74
2
165
19 Earnings per share
Basic earnings per share are computed in accordance with IAS 33,
Earnings per Share, by dividing consolidated net profit by the
weighted average number of shares outstanding. Outstanding
shares relate to issued capital less any treasury shares held.
Weighted average number of shares outstanding
Basic earnings per share
number
1,230,118,545
1,234,109,757
€
1.69
2.13
Basic earnings per share for financial year 2019 were €2.13 (pre-
vious year: €1.69).
To compute diluted earnings per share, the weighted aver-
age number of shares outstanding is adjusted for the number of
all potentially dilutive shares. This item includes the executives’
rights to shares under the Performance Share Plan and Share
Matching Scheme (as at 31 December 2019: 4,887,495 shares;
previous year: 3,810,357 shares) and the maximum number
of ordinary shares that can be issued on exercise of the con-
version rights under the convertible bond issued in Decem-
ber 2017. Consolidated net profit for the period attributable to
Deutsche Post AG shareholders was increased by the amounts
spent for the convertible bond.
Diluted earnings per share in the reporting period were
€2.09 (previous year: €1.66).
Diluted earnings per share
Consolidated net profit for the period attributable to Deutsche Post AG shareholders
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
Potentially dilutive shares
Weighted average number of shares for diluted earnings
Diluted earnings per share
€ m
€ m
€ m
€ m
2018
2,075
8
1
2019
2,623
8
1
2,082
2,630
number
1,230,118,545
1,234,109,757
number
21,791,635
22,862,212
number
1,251,910,180
1,256,971,969
€
1.66
2.09
20 Dividend per share
A dividend per share of €1.25 is being proposed for financial year
2019 (previous year: €1.15). Further details on the dividend dis-
tribution can be found in
note 34.
116
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Balance sheet disclosures
21
Intangible assets
21.1 Overview
€ m
Cost
Balance at 1 January 2018
Additions from business combinations
Additions
Reclassifications
Disposals
Currency translation differences
Balance at 31 December 2018 / 1 January 2019
Additions from business combinations
Additions
Reclassifications
Disposals
Currency translation differences
Balance at 31 December 2019
Amortisation and impairment losses
Balance at 1 January 2018
Additions from business combinations
Amortisation
Impairment losses
Reclassifications
Reversals of impairment losses
Disposals
Currency translation differences
Balance at 31 December 2018 / 1 January 2019
Additions from business combinations
Amortisation
Impairment losses
Reclassifications
Reversals of impairment losses
Disposals
Currency translation differences
Balance at 31 December 2019
Carrying amount at 31 December 2019
Carrying amount at 31 December 2018
Internally generated
intangible assets
Purchased
brand names
Purchased
customer lists
Other purchased
intangible assets
Advance payments
and intangible assets
under development
Goodwill
1,303
0
50
20
–37
–1
1,335
0
52
1
– 99
2
1,291
1,131
0
64
0
0
0
–31
0
1,164
0
77
1
–22
0
– 88
1
1,133
158
171
455
1
0
0
0
–3
453
0
0
0
0
23
476
425
0
1
0
0
0
0
– 4
422
0
1
0
0
0
0
22
445
31
31
43
8
0
0
– 6
–1
44
0
0
0
0
1
45
14
0
6
0
0
0
–2
0
18
0
4
0
0
0
0
1
23
22
26
1,653
3
69
54
– 83
3
1,699
0
69
102
–296
13
1,587
1,327
2
122
2
–1
0
–74
3
1,381
0
128
0
22
0
–288
10
1,253
334
318
12,239
45
0
0
–127
79
12,236
0
0
0
–3
165
12,398
1,070
0
0
0
0
0
–32
–1
1,037
0
0
4
0
0
–1
22
1,062
11,336
11,199
66
0
98
– 54
– 5
0
105
0
86
–76
– 9
0
106
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
106
105
Total
15,759
57
217
20
–258
77
15,872
0
207
27
– 407
204
15,903
3,967
2
193
2
–1
0
–139
–2
4,022
0
210
5
0
0
–377
56
3,916
11,987
11,850
117
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Goodwill disposals in the previous year were mainly attributable
to the reclassification of the supply chain business in China
(€92 million) to assets held for sale and liabilities associated
with assets held for sale,
note 2.
Purchased software, concessions, industrial rights, licences
and similar rights and assets are reported under purchased in-
tangible assets. Internally generated intangible assets relate to
development costs for internally developed software.
21.2 Allocation of goodwill to CGU s
€ m
31 Dec.
2018
31 Dec.
2019
Post & Parcel Germany (formerly PeP) 1
1,107
961
Express
3,910
3,912
Global Forwarding, Freight
DHL Global Forwarding
DHL Freight
Supply Chain
eCommerce Solutions 1
Corporate Incubations
3,950
279
4,019
279
1,939
1,992
n. a.
14
160
13
Total goodwill
11,199
11,336
1 Goodwill was reassigned to the corresponding segments as at 1 January 2019 after
the division of the PeP segment into the Post & Parcel Germany and eCommerce
Solutions segments.
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 or its fair value less costs
to sell. 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 determined
iteratively.
The cash flow projections are based on the detailed plan-
ning for EBIT, depreciation / amortisation and investment plan-
ning adopted by management, as well as changes in net working
capital, and take both internal historical data and external macro-
economic data into account. From a methodological perspective,
the detailed planning phase covers a three-year planning hori-
zon from 2020 to 2022. By contrast, an extended planning phase
of up to eight years is used for the CGU s eCommerce Solutions
and Corporate Incubations. Planning is supplemented by a per-
petual annuity representing the value added from 2023 onwards
or the value added after the extended planning phase. This is
calculated using a long-term growth rate, which is determined
for each CGU separately and the amount of which – for CGU s
whose carrying amounts are significant in comparison with the
total carrying amount of goodwill – is shown in the table below.
The growth rates applied are based on long-term real growth
figures for the relevant economies, 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 antici-
pated future general market trend. In addition, the forecasts take
into account growth in the respective geographical sub-markets
and in global trade, and the ongoing trend towards outsourcing
logistics activities. Cost trend forecasts for the transport network
and services also have an impact on value in use. Another key
planning assumption for the impairment test is the EBIT margin
for the perpetual annuity.
The pre-tax cost of capital is based on the weighted aver-
age cost of capital. The (pre-tax) discount rates for the material
CGU s and the growth rates assumed in each case for the perpet-
ual annuity are shown in the following table:
%
Post & Parcel
Germany
Express
Global
Forwarding,
Freight
DHL Global
Forwarding
DHL Freight
Supply Chain
eCommerce
Solutions
Discount rates
Growth rates
2018
2019
2018
2019
8.0
8.8
7.0
7.2
7.0
n. a.
7.7
8.2
7.2
7.4
7.2
8.9
0.5
2.0
2.5
2.0
2.5
n. a.
0.5
2.0
2.5
2.0
2.5
1.5
On the basis of these assumptions and the impairment tests
carried out for the individual CGU s to which goodwill was
allocated, it was established that the recoverable amounts
for all CGU s exceed their carrying amounts. No impairment
losses were recognised on goodwill in any of the CGU s as at
31 December 2019.
When performing the impairment test, Deutsche Post DHL
Group conducted sensitivity analyses for the significant CGUs in
accordance with IAS 36.134 for the EBIT margin, the discount
rate and the growth rate. These analyses – which included vary-
ing the essential valuation parameters within an appropriate
range – did not reveal any risk of impairment to goodwill.
118
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
22 Property, plant and equipment
Overview of property, plant and equipment, including right-of-use assets
Further information about right-of-use assets can be found in
note 40.
€ m
Cost
Balance at 1 January 2018
Additions from business combinations 1
Additions
Reclassifications
Disposals
Currency translation differences
Balance at 31 December 2018 / 1 January 2019
Additions from business combinations 1
Additions
Reclassifications
Disposals
Currency translation differences
Balance at 31 December 2019
Depreciation and impairment losses
Balance at 1 January 2018
Additions from business combinations 1
Depreciation
Impairment losses
Reclassifications
Reversals of impairment losses
Disposals
Currency translation differences
Balance at 31 December 2018 / 1 January 2019
Additions from business combinations 1
Depreciation
Impairment losses
Reclassifications
Reversals of impairment losses
Disposals
Currency translation differences
Balance at 31 December 2019
Carrying amount at 31 December 2019
Carrying amount at 31 December 2018
1 Also includes a proportionate change from joint operations.
Land and buildings
Technical equipment
and machinery
IT systems, operating
and office equipment
Aircraft
Transport equipment
Advance payments and
assets under development
11,946
30
1,959
286
– 578
–12
13,631
0
2,324
234
– 830
157
15,516
2,129
2
1,495
12
6
–3
–178
14
3,477
0
1,640
18
– 6
0
–351
43
4,821
10,695
10,154
5,612
9
210
374
–208
14
6,011
0
278
321
–277
52
6,385
3,220
3
363
1
2
– 6
–165
9
3,427
0
411
20
1
–1
–233
27
3,652
2,733
2,584
2,509
2
174
91
–291
4
2,489
0
172
100
–257
25
2,529
1,866
1
225
0
– 8
0
–266
3
1,821
0
239
0
6
0
–248
18
1,836
693
668
3,218
50
562
357
– 68
104
4,223
3
451
819
–217
33
5,312
837
8
570
0
0
0
– 42
14
1,387
1
637
0
0
–3
–102
7
1,927
3,385
2,836
3,074
0
462
208
–194
2
3,552
0
475
51
–315
30
3,793
1,209
0
429
0
0
0
–144
– 4
1,490
0
500
0
0
0
–248
13
1,755
2,038
2,062
777
0
1,461
–1,338
–13
11
898
0
2,437
–1,557
–25
6
1,759
0
0
0
1
0
0
–1
0
0
0
0
0
0
0
0
0
0
1,759
898
Total
27,136
91
4,828
–22
–1,352
123
30,804
3
6,137
–32
–1,921
303
35,294
9,261
14
3,082
14
0
– 9
–796
36
11,602
1
3,427
38
1
– 4
–1,182
108
13,991
21,303
19,202
119
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Disposals in the previous year related chiefly to the reclassifica-
tion of the supply chain business in China to assets held for sale
and liabilities associated with assets held for sale and disposals
of right-of-use assets as a result of amended lease terms and
terminations.
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.
They increased chiefly due to the renewal of the intercontinental
Express aircraft fleet, for which €1,100 million was paid in the
financial year.
Assets under development relate to items of property, plant
and equipment in progress at the reporting date for whose pro-
duction internal or third-party costs have already been incurred.
The investment property largely comprises leased property en-
cumbered by heritable building rights and developed and un-
developed land.
Rental income for investment property amounted to €4 mil-
lion (previous year: €3 million), whilst the related expenses were
€3 million (previous year: €1 million). The fair value amounted to
€50 million (previous year: €48 million).
24
Investments accounted for using the equity method
The following is an overview of the carrying amount in the con-
solidated financial statements and selected financial data for
those companies which, both individually and in the aggregate,
are not of material significance for the Group:
Investment property
23
€ m
Cost
Balance at 1 January
Additions
Reclassifications
Disposals
Currency translation differences
Balance at 31 December
Depreciation and impairment losses
Balance at 1 January
Depreciation and impairment losses
Impairment losses
Disposals
Reclassifications
Currency translation differences
Balance at 31 December
Carrying amount at 31 December
of which right-of-use assets
2018
2019
34
8
– 5
– 8
0
29
13
1
1
–3
–1
0
11
18
1
29
8
5
– 4
0
38
11
3
1
–2
0
0
13
25
10
€ m
Balance at 1 January
Additions
Disposals
Impairment losses
Changes in Group’s share of equity
Changes recognised in profit or loss
Profit distributions
Changes recognised in other
comprehensive income
Balance at 31 December
Aggregate financial data
Profit after income taxes
Other comprehensive income
Total comprehensive income
Associates
Joint ventures
2019
106
12
0
0
–10
–2
2
108
–10
2
– 8
2018
3
9
0
0
1
0
0
13
1
0
1
2019
13
0
0
0
2
0
0
15
2
0
2
2018
82
36
– 9
0
–3
–2
2
106
–3
2
–1
2018
85
45
– 9
0
–2
–2
2
119
–2
2
0
Additions mainly relate to the acquisition of another 4.9 % inter-
est in Relais Colis SAS, France, which is accounted for using the
equity method.
Total
2019
119
12
0
0
– 8
–2
2
123
– 8
2
– 6
120
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
25 Financial assets
€ m
Assets measured at cost
Assets at fair value through other
comprehensive income
Assets at fair value through profit or loss
Financial assets
Non-current
2019
490
34
235
759
2018
499
43
188
730
2018
100
0
843
943
Current
2019
369
0
25
394
2018
599
43
1,031
1,673
Total
2019
859
34
260
1,153
Assets measured at cost increased due to the purchase of prom-
issory note loans. At the same time, assets measured at fair value
decreased, largely on account of the sale of money market fund
shares.
Compared with the market rates of interest prevailing
at 31 December 2019 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 €2 million (previous year: €3 million). The
principal amount of these loans totals €2 million (previous year:
€3 million).
Net impairment losses amounted to €–69 million (previous
26 Other assets
Other assets were up primarily as the result of increased tax
receivables, higher contract assets in connection with real es-
tate development projects and the rise in assets from insurance
contracts.
No valuation allowances were recognised on contract
assets. Of the tax receivables, €420 million (previous year:
€368 million) relates to VAT, €91 million (previous year: €70 mil-
lion) to customs and duties, and €43 million (previous year:
€36 million) to other tax receivables.
Information on pension assets can be found in
Miscellaneous other assets include a large number of in-
note 36.
year: €–93 million).
dividual items.
Details on restraints on disposal are contained in
note 42.2.
€ m
Prepaid expenses
Current tax receivables
Pension assets, non-current only
Contract assets
Income from cost absorption
Other assets from insurance contracts
Creditors with debit balances
Recoverable start-up costs, non-current only
Receivables from insurance business
Receivables from private postal agencies
Receivables from loss compensation
(recourse claims)
Receivables from employees
Receivables from cash on delivery
Receivables from asset disposals
Other assets,
of which non-current: 98 (previous year: 59)
Other assets
of which current
non-current
2018
2019
646
474
260
59
125
83
49
34
40
124
30
31
8
3
759
554
242
129
127
126
72
55
48
44
32
29
4
0
756
2,722
2,369
353
772
2,993
2,598
395
121
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
27 Deferred taxes
Breakdown by balance sheet item and maturity
€ 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
of which current
non-current
Netting
Carrying amount
2018
2019
Deferred tax
assets
Deferred tax
liabilities
Deferred tax
assets
Deferred tax
liabilities
15
54
14
15
28
620
1,708
101
1,957
4,512
1,114
3,398
–1,980
2,532
96
1,723
89
1
62
20
17
26
2,034
510
1,524
–1,980
54
4
350
3
13
58
560
1,621
158
1,957
4,724
759
3,965
–2,199
2,525
97
1,917
96
8
52
45
27
13
2,255
215
2,040
29 Trade receivables
€ m
Trade receivables
Deferred revenue
Trade receivables
2018
7,581
666
8,247
2019
7,828
733
8,561
For information on impairment losses, default risk and maturity
structures, see
note 42.
30 Cash and cash equivalents
€ m
Cash equivalents
Bank balances / cash in transit
–2,199
Cash
56
Other cash and cash equivalents
2018
1,116
1,801
16
84
2019
1,103
1,675
13
71
A total of €1,422 million (previous year: €1,551 million) of the
deferred taxes on tax loss carryforwards relates to tax loss
carryforwards in Germany and €535 million (previous year:
€406 million) to foreign tax loss carryforwards (mainly from
the Americas region).
No deferred tax assets were recognised for tax loss carry-
forwards of around €4.2 billion (previous year: €5.0 billion)
chiefly from the Americas region and for temporary differences
of around €3.5 billion (previous year: €2.2 billion) primarily from
Germany, 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.
The tax loss carryforwards from the Americas region for
which no deferred tax assets were recognised do not expire prior
to 2027.
Deferred taxes have not been recognised for temporary dif-
ferences of €528 million (previous year: €510 million) relating to
earnings of German and foreign subsidiaries because these tempo-
rary differences will probably not reverse in the foreseeable future.
Inventories
28
Adequate valuation allowances were recognised.
€ m
Raw materials, consumables and supplies
Finished goods and goods purchased
and held for resale
Work in progress
Advance payments
Inventories
2018
233
150
69
2
454
2019
251
75
65
5
396
Cash and cash equivalents
3,017
2,862
Of the €2,862 million in cash and cash equivalents, €1,054 mil-
lion was not available for general use by the Group as at the
reporting date (previous year: €977 million). Of this amount,
€979 million (previous year: €905 million) was attributable to
countries where exchange controls or other legal restrictions ap-
ply (mostly China, India and Thailand) and €75 million (previous
year: €72 million) primarily to companies with non-controlling
interest shareholders.
122
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
31 Assets held for sale and liabilities associated
with assets held for sale
The amounts reported in this item relate mainly to the following
items:
€ m
Sale of CSG.PB GmbH, Germany – Corporate Functions segment
Sale of the Supply Chain business in China, Hong Kong and Macao –
Supply Chain segment
Other
Assets held for sale and liabilities associated with assets held for sale
The sale of CSG.PB GmbH, which provides facility management
services, is planned for the end of March 2020. The most recent
remeasurement prior to reclassification to assets held for sale
and liabilities associated with assets held for sale did not result
in any impairment loss.
CSG.PB GmbH
€ m
Non-current assets
of which goodwill
Current assets
Cash and cash equivalents
ASSETS
Non-current provisions and liabilities
Current provisions and liabilities
EQUITY AND LIABILITIES
31 Dec.
2019
8
0
0
0
8
11
3
14
2018
0
414
12
426
Assets
2019
8
0
1
9
2018
0
228
0
228
Liabilities
2019
14
0
0
14
Issued capital and purchase of treasury shares
32
As at 31 December 2019, KfW Bankengruppe (KfW) held a
20.5 % interest, unchanged from the previous year, in the share
capital of Deutsche Post AG. Free float accounts for 79.4 % of
the shares and the remaining 0.1 % of shares are owned by
Deutsche Post AG. KfW holds the shares in trust for the Federal
Republic of Germany.
32.1 Changes in issued capital
The issued capital amounts to €1,237 million. It is composed of
1,236,506,759 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 and treasury shares
The sale of the Supply Chain business in China to S. F. Holding,
China, was completed in February 2019,
note 2.
€
2018
2019
The planned sales of the Swiss DHL Supply Chain business
and the assets of DHL Paket ( Austria) GmbH (eCommerce Solu-
tions segment) as part of an asset deal with Austrian Post were
reported during the financial year. The sales have now been com-
pleted,
notes 15 and 41.
Issued capital
Balance at 1 January
Addition due to contingent capital
increase (convertible bond)
Addition due to contingent capital
increase (Performance Share Plan)
1,228,707,545
1,236,506,759
5,379,106
2,420,108
0
0
Balance at 31 December
1,236,506,759
1,236,506,759
Treasury shares
Balance at 1 January
Purchase of treasury shares
Issue / sale of treasury shares
Balance at 31 December
– 4,513,582
–3,628,651
–1,284,619
2,169,550
–3,628,651
–385,120
3,030,077
– 983,694
Total at 31 December
1,232,878,108
1,235,523,065
123
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
32.2 Authorised and contingent capital
Authorised / contingent capital at 31 December 2019
Amount
€ m Purpose
Authorised Capital 2017
160
Increase in share capital against
cash / non-cash contributions
(until 27 April 2022)
Contingent Capital 2014
38 Issue of Performance Share Units
to executives (until 7 May 2018)
Contingent Capital 2017
75 Issue of options / conversion rights
Contingent Capital 2018 / 1
(until 27 April 2022)
12 Issue of Performance Share Units
to executives (until 23 April 2021)
Contingent Capital 2018 / 2
33 Issue of options / conversion rights
(until 23 April 2021)
Authorised Capital 2017
As resolved by the Annual General Meeting on 28 April 2017, the
Board of Management is authorised, subject to the consent of
the Supervisory Board, to issue up to 160 million new, no-par
value registered shares until 27 April 2022 in exchange for cash
and / or non-cash contributions and thereby increase the com-
pany’s share capital. The authorisation may be used in full or for
partial amounts. Shareholders generally have pre-emptive rights.
However, subject to the approval of the Supervisory Board, the
Board of Management may disapply the shareholders’ pre-emp-
tive rights to the shares covered by the authorisation. No use was
made of the authorisation in the reporting period.
Contingent Capital 2014
In its resolution dated 27 May 2014, the Annual General Meeting
authorised the Board of Management to contingently increase
the share capital by up to €40 million through the issue of up to
40 million new no-par value registered shares. The contingent
capital increase served to grant subscription rights (Performance
Share Units, PSUs) to selected Group executives. The contingent
capital increase will only be implemented to the extent that
shares are issued based on the PSUs granted and the company
does not settle the PSUs by cash payment or delivery of treasury
shares. The new shares participate in profit from the beginning
of the financial year in which they are issued. The exercising of
the authorisation in 2018 resulted in 2.4 million new shares that
were issued to executives in September 2018. No use was made
of the authorisation in financial year 2019. Contingent Capital
2014 amounts to €37.6 million.
Contingent Capital 2017
In its resolution dated 28 April 2017, 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 participation certifi-
cates, or a combination thereof, in an aggregate principal amount
of up to €1.5 billion, on one or more occasions until 27 April 2022,
thereby granting options or conversion rights for up to 75 million
shares with a proportionate interest in the share capital not to
exceed €75 million. The new shares participate in profit from
the beginning of the financial year in which they are issued.
The authorisation was exercised in part in December 2017, by
issuing the convertible bond 2017 / 2025 in an aggregate prin-
cipal amount of €1 billion. The share capital was increased on a
contingent basis by up to €75 million. No use was made of the
authorisation in financial year 2019.
Contingent Capital 2018 / 1
In its resolution dated 24 April 2018, the Annual General
Meeting contingently increased the share capital by up to
€12 million through the issue of up to 12 million no-par value
registered shares. The contingent capital increase serves
to grant Performance Share Units (PSUs) to selected Group
executives. The shares will be issued to beneficiaries based on
the aforementioned authorisation resolution. The new shares
participate in profit from the beginning of the financial year in
which they are issued. No use was made of the authorisation in
the reporting period.
Contingent Capital 2018 / 2
The share capital was contingently increased by up to €33 mil-
lion through the issue of up to 33 million no-par value registered
shares. The contingent capital increase serves to grant options or
conversion rights or to settle conversion obligations and to grant
shares in lieu of cash payments to the holders of bonds issued
by the company or its Group companies in accordance with the
authorisation resolution by the Annual General Meeting dated
24 April 2018. The new shares participate in profit from the be-
ginning of the financial year in which they are issued. No use was
made of the authorisation in the reporting period.
32.3 Authorisation to acquire treasury shares
By way of a resolution adopted by the Annual General Meeting
on 28 April 2017, the company is authorised to acquire treasury
shares in the period to 27 April 2022 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.
Treasury shares acquired on the basis of the authorisation, with
shareholders’ pre-emptive rights disapplied, may, furthermore,
be used for the purposes of listing on a stock exchange outside
Germany. In addition, the Board of Management was authorised
to acquire treasury shares using derivatives.
Purchase and issuance of treasury shares
In financial year 2019, around 385 thousand shares were ac-
quired for €11 million at an average price of €28.27 per share.
Along with existing treasury shares, a total of 1.3 million shares
were issued to executives to settle the Share Matching Scheme.
124
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
In the third quarter, another 1.7 million treasury shares were
issued to the executives to settle the Performance Share Plan.
33 Capital reserves
As at 31 December 2019, Deutsche Post AG held 983,694
€ m
treasury shares (previous year: 3,628,651 treasury shares).
32.4 Disclosures on corporate capital
In financial year 2019, the equity ratio was 27.6 % (previous year:
27.5 %). 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.
Corporate capital
€ m
Financial liabilities
Less operating financial liabilities 1
Less cash and cash equivalents
Less current financial assets
Less non-current derivative financial
instruments
Net debt
Plus total equity
Total capital
Net gearing ratio (%)
1 Relates to e. g. liabilities from overpayments.
2018
16,462
–199
–3,017
– 943
0
12,303
13,873
26,176
47.0
2019
16,974
–350
–2,862
–394
–1
13,367
14,392
27,759
48.2
Balance at 1 January
Share Matching Scheme
Addition
Exercise
Total for Share Matching Scheme
Performance Share Plan
Addition
Exercise
Total for Performance Share Plan
Retirement / issue of treasury shares
Differences between purchase and issue
prices of treasury shares
Capital increase through exercise of
conversion rights under convertible
bond 2012 / 2019
Balance at 31 December
2018
3,327
2019
3,469
73
– 64
9
26
–28
–2
26
7
102
3,469
31
–25
6
25
–23
2
0
5
0
3,482
34 Equity attributable to Deutsche Post AG shareholders
The equity attributable to Deutsche Post AG shareholders in fi-
nancial year 2019 amounted to €14,117 million (previous year:
€13,590 million).
Dividends
Dividends paid to the shareholders of Deutsche Post AG are
based on the net retained profit of €6,484 million reported in
Deutsche Post AG’s annual financial statements in accordance
with the HGB. The Board of Management is proposing a dividend
of €1.25 per no-par value share carrying dividend rights. This
corresponds to a total dividend of €1,546 million. The amount
of €4,938 million remaining after deduction of the planned total
dividend will be carried forward to new account. The final total
dividend will be based on the number of shares carrying dividend
rights at the time the Annual General Meeting resolves upon the
appropriation of the net retained profit on the day the AGM con-
venes.
Dividend distributed in financial year 2019
for the year 2018
Dividend distributed in financial year 2018
for the year 2017
Total
dividend
€ m
Dividend
per share
€
1,419
1.15
1,409
1.15
35 Non-controlling interests
This balance sheet item includes adjustments for the interests of
non-Group shareholders in consolidated equity from acquisition
accounting, as well as their interests in profit or loss.
The following table shows the companies to which the
non-controlling interests relate:
€ m
2018
2019
DHL Sinotrans International Air Courier Ltd.,
China
PT. Birotika Semesta, Indonesia
Blue Dart Express Limited, India
Exel Saudia LLC, Saudi Arabia
DHL Global Forwarding Abu Dhabi LLC,
United Arab Emirates
Other companies
Non-controlling interests
173
16
18
14
8
54
283
169
19
17
9
7
54
275
125
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
There are material non-controlling interests in the following two
companies:
DHL Sinotrans International Air Courier Ltd. (Sinotrans),
China, which is assigned to the Express segment, provides do-
mestic and international express delivery and transport services.
Deutsche Post DHL Group holds a 50 % interest in the company.
Deutsche Post AG holds a 75 % interest in Blue Dart Express
Limited (Blue Dart), India, which is assigned to the eCommerce
Solutions segment. Blue Dart is a courier service provider. The
following table gives an overview of their aggregated financial
data:
Financial data for material non-controlling interests
€ m
Balance sheet
ASSETS
Non-current assets
Current assets
Total ASSETS
EQUITY AND LIABILITIES
Non-current provisions and liabilities
Current provisions and liabilities
Total EQUITY AND LIABILITIES
Net assets
Non-controlling interests
Income statement
Revenue
Profit before income taxes
Income taxes
Profit after income taxes
Other comprehensive income
Total comprehensive income
attributable to non-controlling interests
Dividend distributed to non-controlling interests
Consolidated net profit attributable to non-controlling interests
Cash flow statement
Net cash from operating activities
Net cash used in / from investing activities
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at 1 January
Effect of changes in exchange rates on cash and cash equivalents
Cash and cash equivalents at 31 December
Sinotrans
Blue Dart
2018
2019
2018
2019
131
485
616
31
240
271
345
173
130
475
605
32
237
269
336
169
1,534
1,677
340
86
254
– 9
245
123
114
127
293
– 4
–239
50
235
– 8
277
330
82
248
–3
245
118
127
120
278
–17
–273
–12
277
–3
262
109
98
207
37
79
116
91
18
383
20
8
12
–3
9
2
1
3
29
–1
–21
7
18
0
25
106
91
197
38
73
111
86
17
407
3
2
1
–1
0
0
1
0
20
– 6
–31
–17
25
0
8
126
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The portion of other comprehensive income attributable to
non-controlling interests largely relates to the currency trans-
lation reserve. The changes are shown in the following table:
€ m
Balance at 1 January
Transaction with non-controlling interests
Total comprehensive income
Changes from unrealised gains and losses
Changes from realised gains and losses
Currency translation reserve at 31 December
2018
–12
0
– 4
0
–16
2019
–16
0
0
0
–16
36 Provisions for pensions and similar obligations
The Group’s most significant defined benefit retirement plans are
in Germany and the UK. A wide variety of other defined benefit
retirement plans in the Group are to be found in the Netherlands,
Switzerland, the USA and a large number of other countries.
There are specific risks associated with these plans along with
measures to mitigate them.
36.1 Plan features
Germany
In Germany, Deutsche Post AG has an occupational retirement
benefit arrangement based on a collective agreement, which is
open to new hourly workers and salaried employees. Depending
on the weekly working hours and wage / salary group, retirement
benefit components are calculated annually for each hourly
worker and salaried employee, and credited to an individual
pension account. A 2.5 % increase on the previous year is included
in every newly allocated component. When the statutory pension
falls due, the hourly workers and salaried employees can choose
whether to receive payment as a lump-sum or in instalments,
or lifelong monthly benefit payments that increase by 1 % each
year. Hourly workers and salaried employees who were already
employed as at 31 December 2015 were generally transferred
to this system. Since the prior year, the added payment option
of receiving one lump-sum instead of lifelong monthly benefit
payments has also been granted to certain groups of hourly
workers and salaried employees (e. g. former hourly workers
and salaried employees with fully vested entitlements) for
whom it had previously not been available. The large majority
of Deutsche Post AG’s obligations relates to older vested entitle-
ments of hourly workers and salaried employees, and to legacy
pension commitments towards former hourly workers and
salaried employees who have left or retired from the company.
In addition, retirement benefit arrangements are available to
executives below the Board of Management level and to specific
employee groups through deferred compensation in particular.
In the third and fourth quarter of 2019, respectively, the Group
began offering executives, below Board of Management level
and employees participating in the centrally managed deferred
compensation arrangements the option of taking a lump-sum
payment rather than receiving a lifetime pension. These changes
resulted in past service income as well as a change in current
service cost and net interest cost for the rest of the reporting
period. Details on the retirement benefit arrangements for the
Board of Management can be found in the
Combined Manage-
ment Report, page 21 f.
The prime source of external funding for Deutsche Post AG’s
respective retirement benefit obligations is a contractual trust
arrangement, which also includes a pension fund. The trust is
funded on a case-by-case basis in line with the Group’s finance
strategy. In the case of the pension fund, the regulatory funding re-
quirements can, in principle, be met without additional employer
contributions. Part of the plan assets consists of real estate that
is leased out to the Group on a long-term basis. In addition, the
Versorgungsanstalt der Deutschen Bundespost (VAP – Deutsche
Bundespost institution for supplementary retirement pensions),
a shared pension fund for successor companies to Deutsche
Bundespost, is used for some of the legacy pension commitments.
Individual subsidiaries in Germany have retirement ben-
efit plans that were acquired in the context of acquisitions and
transfers of operations and that are closed to new entrants. Con-
tractual trust arrangements are available for three subsidiaries
with a view to external financing.
United Kingdom
In the UK, the Group’s defined benefit pension arrangements
are closed to new entrants and for further service accrual.
One arrangement which, exceptionally, was partly open until
31 March 2019, was then also closed to new entrants and for
further service accrual. The relevant decision was made in the
previous year. In the reporting period, certain active members of
this arrangement were subsequently given the option to transfer
their past service benefits to an external pension arrangement.
This led to settlement effects in the reporting period and corre-
sponding settlement payments are expected to be made in 2020.
Further, a High Court ruling in the previous year on equalisation
of guaranteed minimum pensions (GMP) required all affected
plans to equalise GMP between male and female plan members.
The Group’s defined benefit pension arrangements in the
UK have mainly been consolidated into a group plan with different
sections for the participating divisions. These are funded mainly
via a group trust. The amount of the employer contributions must
be negotiated with the trustee in the course of funding valuations.
Until that time, employee beneficiaries of the defined benefit
arrangement that was open until 31 March 2019 made their own
funding contributions.
127
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Other
In the Netherlands, collective agreements require that those em-
ployees who are not covered by a sector-specific plan participate
in a dedicated defined benefit retirement plan. The dedicated
plan provides for annual accruals which are subject to a pen-
sionable salary cap. Furthermore, the plan provides for monthly
benefit payments that increase in line with inflation, 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, where pension payments
depend on the contributions paid, an interest rate that is fixed
each year, certain annuity factors and any pension increases
specified. A separate plan providing for lump-sum payments
instead of lifelong pension payments exists for specific higher
wage components. In the USA, the companies’ defined benefit
retirement plans have been closed to new entrants and accrued
entitlements have been frozen. In the reporting period, members
there whose employment had ended were offered an immediate
lump-sum payment instead of receiving a future pension, which
primarily led to settlement gains and settlement payments.
The Group companies fund their dedicated defined ben-
efit retirement plans in these three countries primarily by using
respective joint funding institutions. In the Netherlands and in
Switzerland, both employers and employees contribute to plan
funding. In the USA no regular contributions are currently made
in this regard.
36.2 Financial performance of the plans and determination
of balance sheet items
The present value of defined benefit obligations, the fair value
of plan assets and net pension provisions changed as follows:
€ m
Balance at 1 January
Current service cost, excluding employee contributions
Past service cost
Settlement gains (–) / losses (+)
Other administration costs in accordance with IAS 19.130
Service cost 1
Interest cost on defined benefit obligations
Interest income on plan assets
Net interest cost
Income and expenses recognised in the income statement
Actuarial gains (–) / losses (+)
– changes in demographic assumptions
Actuarial gains (–) / losses (+)
– changes in financial assumptions
Actuarial gains (–) / losses (+)
– experience adjustments
Return on plan assets excluding interest income
Remeasurements recognised in the statement of comprehensive
income
Employer contributions
Employee contributions
Benefit payments
Settlement payments
Transfers
Acquisitions / divestitures
Currency translation effects
Balance at 31 December
Present value of defined
benefit obligations
Fair value of plan assets
Net pension provisions
2018
2019
2018
2019
17,381
16,696
13,084
12,608
193
–113
–1
–
79
401
–
401
480
100
218
–274
–24
–
– 80
379
–
379
299
– 89
–261
2,146
–286
–
63
–
–
–
–
–11
–11
–
303
303
292
–
–
–
–
–
–
–12
–12
–
291
291
279
–
–
–
–256
1,052
– 447
2,120
–256
1,052
–
33
–737
–10
0
0
– 4
–
35
65
19
–742
– 585
– 49
–13
1
271
– 8
0
0
–3
56
19
– 488
– 42
– 5
0
279
2018
4,297
193
–113
–1
11
90
401
–303
98
188
2019
4,088
218
–274
–24
12
– 68
379
–291
88
20
100
– 89
–261
2,146
–286
256
–191
– 65
14
–152
–2
0
0
–1
63
–1,052
1,068
– 56
16
–254
–7
– 8
1
– 8
16,696
18,618
12,608
13,758
4,088
4,860
1 Including other administration costs in accordance with IAS 19.130 from plan assets.
128
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
As at 31 December 2019, the effects of asset ceilings amounted
to €5 million; an expedient was applied to their recognition by
deducting this amount from the fair value of plan assets (1 Jan-
uary 2019 / 31 December 2018: €2 million; 1 January 2018:
€3 million).
In the reporting period, past service income was attribut-
able mainly to plan amendments in Germany in connection with
the expansion of the lump-sum payment option to two additional
retirement benefit arrangements, which contributed an amount
of €271 million. Settlement effects resulted mainly from changes
in the UK and the USA and settlement payments were already
incurred in the USA. In the previous year, past service income
was attributable mainly to plan amendments in Germany at
Deutsche Post AG and limited in particular by opposite effects
€ m
2019
Present value of defined benefit obligations at 31 December
Fair value of plan assets 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
2018
Present value of defined benefit obligations at 31 December
Fair value of plan assets 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
of the court ruling in the UK. Experience adjustments were made
chiefly as a result of a new funding valuation in the UK. The pro-
portion of benefit payments paid out of plan assets in Germany
increased.
In the Other area, the Netherlands, Switzerland and the USA
account for a share in the corresponding present value of the
defined benefit obligations of 44 %, 20 % and 11 %, respectively
(previous year: 43 %, 21 % and 12 %).
Total payments amounting to €332 million are expected
with regard to net pension provisions in 2020. Of this amount,
€288 million is attributable to the Group’s expected direct bene-
fit payments and €44 million to expected employer contributions
to pension funds.
The disaggregation of the present value of defined benefit
obligations, fair value of plan assets and net pension provisions,
as well as the determination of the balance sheet items, are as
follows:
Additionally, rights to reimbursement from former Group
companies existed in the Group in Germany in the amount of
around €14 million (previous year: €19 million), which had to
be reported separately under financial assets. Corresponding
benefit payments are being made directly by the former Group
companies.
Germany
United Kingdom
10,355
– 5,828
4,527
0
4,527
9,371
– 5,512
3,859
0
3,859
5,349
– 5,489
–140
141
1
4,747
– 4,914
–167
167
0
Other
2,914
–2,441
473
101
574
2,578
–2,182
396
93
489
Total
18,618
–13,758
4,860
242
5,102
16,696
–12,608
4,088
260
4,348
129
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Germany
United Kingdom
Other
1.40
2.50
1.75
2.30
2.50
2.00
1.90
n. a.
2.70
2.70
3.25
2.85
1.52
2.32
1.02
2.35
2.30
1.27
the Continuous Mortality Investigation (CMI) of the Institute and
Faculty of Actuaries, adjusted to reflect plan-specific mortality
according to the latest funding valuation. Current projections of
future mortality improvements were taken into account based
on the CMI core projection model. For other countries, their own
country-specific current standard mortality tables were used.
36.3 Additional information on the present value of defined
benefit obligations
The significant financial assumptions are as follows:
%
31 December 2019
Discount rate (defined benefit obligations)
Expected annual rate of future salary increase
Expected annual rate of future pension increase
31 December 2018
Discount rate (defined benefit obligations)
Expected annual rate of future salary increase
Expected annual rate of future pension increase
The discount rates for defined benefit obligations in the euro-
zone and the UK were each derived from an individual yield curve
comprising the yields of AA-rated corporate bonds and taking
into account membership composition and duration. For other
countries, the discount rate for defined benefit obligations was
determined in a similar way, provided there was a deep market for
AA-rated (or, in some cases, AA and AAA-rated) corporate bonds.
By contrast, government bond yields were used for countries
without a deep market for such corporate bonds. In the previous
year, we began rounding each of the discount rates to the nearest
0.10 percentage point (previously: 0.25 percentage point).
For the annual pension increase in Germany, fixed rates in
particular must be taken into account, in addition to the assump-
tions shown. The effective weighted average therefore amounts
to 1.00 % (previous year: 1.00 %).
The most significant demographic assumptions made
relate to life expectancy and / or mortality. For the Group com-
panies in Germany, they have been based since the previous year
on the HEUBECK RICHTTAFELN 2018 G mortality tables. Since
the previous year, life expectancy for the retirement benefit plans
in the UK has mainly been based on the S2PMA / S2PFA tables of
Total
1.56
2.47
2.19
2.42
2.47
2.17
130
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
If one of the significant financial assumptions were to
change, the present value of the defined benefit obligations
would change as follows:
31 December 2019
Discount rate (defined benefit obligations)
Expected annual rate of future salary increase
Expected annual rate of future pension increase
31 December 2018
Discount rate (defined benefit obligations)
Expected annual rate of future salary increase
Expected annual rate of future pension increase
Change in assumption
percentage points
Change in present value
of defined benefit obligations
%
Germany
United Kingdom
1.00
–1.00
0.50
– 0.50
0.50
– 0.50
1.00
–1.00
0.50
– 0.50
0.50
– 0.50
–12.80
16.37
0.16
– 0.16
0.35
– 0.32
–12.37
15.70
0.18
– 0.17
0.43
– 0.39
–14.54
18.79
n. a.
n. a.
5.91
– 5.35
–14.20
18.29
0.08
– 0.08
5.44
– 5.36
Other
–14.73
19.74
0.98
– 0.91
6.78
– 4.97
–14.01
18.25
0.95
– 0.88
6.23
– 4.52
These are effective weighted changes in the respective present
value of the defined benefit obligations, e. g. taking into account
the largely fixed nature of the pension increase for Germany.
A one-year increase in life expectancy for a 65-year-old
beneficiary would increase the present value of the defined bene-
fit obligations by 4.95 % in Germany (previous year: 4.59 %) and
by 4.39 % in the UK (previous year: 3.60 %). The corresponding
increase for other countries would be 3.00 % (previous year:
2.80 %) and the total increase would be 4.49 % (previous year:
4.04 %).
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 as-
sumptions; rather, it supposes that the assumptions change in
isolation. This would be unusual in practice, since assumptions
are often correlated.
The weighted average duration of the Group’s defined bene-
fit obligations at 31 December 2019 was 14.6 years in Germany
(previous year: 14.2 years) and 16.7 years in the UK (previous
year: 16.4 years). In the other countries it was 17.9 years (pre-
vious year: 17.0 years), and in total it was 15.7 years (previous
year: 15.3 years).
A total of 31.5 % (previous year: 30.6 %) of the present value
of the defined benefit obligations was attributable to active bene-
ficiaries, 19.0 % (previous year: 18.4 %) to formerly employed
beneficiaries and 49.5 % (previous year: 51.0 %) to retirees.
Total
–13.60
17.58
0.24
– 0.23
2.94
–2.48
–13.14
16.82
0.27
– 0.25
2.74
–2.43
131
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
36.4 Additional information on the fair value of plan assets
The fair value of the plan assets can be disaggregated as follows:
€ m
31 December 2019
Equities
Fixed income securities
Real estate
Alternatives 1
Insurances
Cash
Other
Fair value of plan assets
31 December 2018
Equities
Fixed income securities
Real estate
Alternatives 1
Insurances
Cash
Other
Germany United Kingdom
Other
Total
Deutsche Post DHL Group’s equity through other comprehensive
income, whose overall relevance is classed as medium to high.
In contrast, a low relevance is attached to the short-term effects
on staff costs and net finance costs. Potential risk mitigation is
applied depending on the specifics of the plans.
1,100
1,973
1,600
386
538
199
32
470
4,304
279
316
0
120
0
765
1,043
342
30
150
9
102
2,335
7,320
2,221
732
688
328
134
5,828
5,489
2,441
13,758
INTEREST RATE RISK
A decrease (increase) in the respective discount rate would lead
to an increase (decrease) in the present value of the total obli-
gation and would in principle be accompanied by an increase
(decrease) in the fair value of the fixed income securities con-
tained in the plan assets. Further hedging measures are applied,
in some cases using derivatives.
550
1,717
1,511
372
546
806
10
415
3,825
255
379
0
40
0
668
907
298
30
127
46
106
1,633
6,449
2,064
781
673
892
116
Fair value of plan assets
5,512
4,914
2,182
12,608
1 Primarily includes absolute return products.
Quoted market prices in an active market exist for around 70 %
(previous year: 73 %) of the total fair values of plan assets. The
remaining assets for which no such quoted market prices exist
are mainly attributable as follows: 14 % (previous year: 14 %) to
real estate, 9 % (previous year: 6 %) to fixed income securities, 5 %
(previous year: 5 %) to insurances and 2 % (previous year: 2 %) to
alternatives. The majority of the investments on the active markets
are globally diversified, with certain country-specific focus areas.
Real estate included in plan assets in Germany with a fair
value of €1,502 million (previous year: €1,424 million) is occupied
by Deutsche Post DHL Group.
opments on the capital markets and resulted in a decrease in the
proportion of equity holdings and an increase in the proportion
of the cash holdings.
Asset-liability studies are performed at regular intervals
in Germany, the UK and, amongst other places, the Netherlands,
Switzerland and the USA for the purpose of matching assets
and liabilities; the strategic allocation of plan assets is adjusted
accordingly.
Sustainable approaches mainly based on an integration of
ESG criteria are increasingly being used when investing plan assets.
This year’s increase in fixed income securities resulted pri-
marily from the change in the relevant market interest rates. In
the previous year, hedging measures were taken due to devel-
36.5 Risk
Specific risks are associated with the defined benefit retire-
ment plans. This can result in a (negative or positive) change in
INFLATION RISK
Pension obligations – especially relating to final salary schemes
or schemes involving increases during the pension payment
phase – can be linked directly or indirectly to changes in inflation.
The risk of increasing inflation rates with regard to the present
value of the defined benefit obligations has been mitigated in
the case of Germany, for example, by switching to a system of
retirement benefit components and, in the case of the UK, by
closing the defined benefit arrangements. In addition, fixed rates
of increase have been set and increases partially capped, and / or
lump-sum payments have been provided for. There is also a posi-
tive correlation with interest rates.
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 diversifi-
cation and the use of hedging instruments.
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 mortality
tables when calculating the present value of the defined benefit
132
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
obligations. The mortality tables used in Germany and the UK,
for example, include an allowance for expected future increases
in life expectancy.
37 Other provisions
Other provisions break down into the following main types of
provision:
€ m
Other employee benefits
Technical reserves (insurance)
Aircraft maintenance
Tax provisions
Restructuring provisions
Miscellaneous provisions
Other provisions
37.1 Changes in other provisions
€ m
Balance at 1 January 2019
Changes in consolidated group
Utilisation
Currency translation differences
Reversal
Unwinding of discount / changes in discount rate
Reclassification
Addition
Balance at 31 December 2019
Non-current
2018
2019
2018
789
415
160
–
25
266
1,655
703
438
185
–
35
289
1,650
205
237
58
130
48
395
1,073
Current
2019
154
236
74
147
43
310
964
2018
994
652
218
130
73
661
Total
2019
857
674
259
147
78
599
2,728
2,614
Other employee
benefits
Restructuring
provisions
Technical
reserves
(insurance)
Aircraft
maintenance
Tax provisions
Miscellaneous
provisions
994
0
–722
8
–10
16
1
570
857
73
0
– 53
1
–12
1
0
68
78
652
0
–32
6
–29
2
0
75
674
218
–3
– 8
1
–12
1
0
62
259
130
0
– 40
1
– 4
0
0
60
147
661
0
–346
7
– 57
5
–1
330
599
Total
2,728
–3
–1,201
24
–124
25
0
1,165
2,614
133
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The provision for other employee benefits primarily covers work-
force reduction expenses (severance payments, transitional bene-
fits, partial retirement, etc.), stock appreciation rights (SAR s)
and jubilee payments. The decrease was largely as a result of
utilisation for the early retirement programme and the corres-
ponding reclassification to liabilities.
The restructuring provisions comprise mainly costs from
the closure of terminals and outstanding obligations to employ-
ees regarding post-employment benefits.
Technical reserves (insurance) mainly consist of outstand-
ing loss reserves and IBNR reserves; further details can be found
in
note 6.
The provision for aircraft maintenance relates to obliga-
tions for major aircraft and engine maintenance by third-party
companies.
Of the tax provisions, €60 million (previous year: €53 mil-
lion) relates to VAT, €34 million (previous year: €31 million) to
customs and duties, and €53 million (previous year: €46 million)
to other tax provisions.
Miscellaneous provisions, which include a large number of
individual items, break down as follows:
€ m
Litigation costs,
of which non-current: 55 (previous year: 54)
Risks from business activities,
of which non-current: 8 (previous year: 6)
Miscellaneous other provisions,
of which non-current: 226 (previous year: 206)
Miscellaneous provisions
2018
2019
104
40
517
661
108
37
454
599
37.2 Maturity structure
The maturity structure of the provisions recognised in financial
year 2019 is as follows:
€ m
2019
Other employee benefits
Technical reserves (insurance)
Aircraft maintenance
Tax provisions
Restructuring provisions
Miscellaneous provisions
Total
Up to 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
Total
154
236
74
147
43
310
964
144
249
68
0
15
108
584
74
80
24
0
6
47
231
58
42
5
0
3
35
143
54
28
56
0
4
30
172
373
39
32
0
7
69
520
857
674
259
147
78
599
2,614
134
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
38 Financial liabilities
€ m
Bonds
Amounts due to banks
Lease liabilities 1
Liabilities at fair value through profit or loss
Other financial liabilities
Financial liabilities
1 Explanations can be found in
note 40.
Non-current
2019
5,164
181
8,145
1
245
2018
5,463
84
7,756
1
565
13,869
13,736
2018
9
180
2,103
37
264
2,593
Current
2019
303
287
2,156
22
470
3,238
2018
5,472
264
9,859
38
829
Total
2019
5,467
468
10,301
23
715
16,462
16,974
The amounts due to banks mainly comprise current overdraft
facilities due to various banks.
The amounts reported under liabilities at fair value through
profit or loss mainly relate to the negative fair values of derivative
financial instruments.
The decline in other financial liabilities, which relate to a
large number of individual items, is the result of the partial re-
payment of promissory note loans.
38.1 Bonds
The bond issued by Deutsche Post Finance B. V. is fully guaran-
teed by Deutsche Post AG.
Significant bonds
Bond 2012 /2022
Bond 2012 /2020
Bond 2012 /2024
Bond 2013 /2023
Bond 2016 /2021
Bond 2016 /2026
Bond 2017 /2027
Bond 2018 /2028
Convertible bond 2017 /2025 1
Nominal coupon
%
Issue volume
€ m Issuer
Carrying amount
€ m
Fair value
€ m
Carrying amount
€ m
2018
2.950
1.875
2.875
2.750
0.375
1.250
1.000
1.625
0.050
500 Deutsche Post Finance B. V.
300 Deutsche Post AG
700 Deutsche Post AG
500 Deutsche Post AG
750 Deutsche Post AG
500 Deutsche Post AG
500 Deutsche Post AG
750 Deutsche Post AG
1,000 Deutsche Post AG
498
299
698
497
747
497
495
741
953
546
311
784
553
755
506
483
757
938
499
300
698
498
748
497
496
742
960
1 Fair value of the debt component; the fair value of the convertible bond 2017 / 2025 is €1,024 million (previous year: €956 million).
2019
Fair value
€ m
538
306
797
552
754
530
524
825
990
135
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
CONVERTIBLE BOND
The convertible bond issued carries a conversion right that
allows holders to convert the bond into a predetermined number
of Deutsche Post AG shares.
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 convertible bond has a debt component and an equity
component. In subsequent years, interest will be added to the
carrying amount of the bond, up to the issue amount, using the
effective interest method and recognised in profit or loss.
Convertible bond
Issue date
Issue volume
Outstanding volume
Exercise period, conversion right
Exercise period, call option
Value of debt component at issue date 2
Value of equity component at issue date 3
2017 / 2025
13 Dec. 2017
€1 billion
€1 billion
13 Dec. 2020
to 13 June 2025 1
2 Jan. 2023
to 10 June 2025
€946 million
€53 million
Transaction costs (debt / equity component)
€4.7 / €0.3 million
Conversion price at issue
Conversion price after adjustment 4
in 2018
in 2019
€55.69
€55.61
€55.63
1 Excluding possible contingent conversion periods according to the bond terms.
2 Including transaction costs and call option granted.
3 Recognised in capital reserves.
4 After dividend payment.
39 Other liabilities
€ m
Tax liabilities
Incentive bonuses
Wages, salaries, severance payments
Compensated absences
Contract liabilities,
of which non-current: 11 (previous year: 4)
Payables to employees and members
of executive bodies
Social security liabilities
Deferred income,
of which non-current: 63 (previous year: 61)
Debtors with credit balances
Postage stamps (contract liabilities)
Overtime claims
Liabilities from the sale of
residential building loans,
of which non-current: 51 (previous year: 67)
Insurance liabilities
COD liabilities
Other compensated absences
Liabilities from cheques issued
Accrued rentals
Accrued insurance premiums for
damages and similar liabilities
Liabilities from loss compensation
2018
1,196
2019
1,255
616
384
347
227
229
171
129
144
137
97
85
31
62
28
28
19
8
10
681
486
370
235
223
179
150
147
125
98
66
63
37
30
29
16
12
9
Miscellaneous other liabilities,
of which non-current: 235 (previous year: 73)
Other liabilities
of which current
non-current
689
4,637
4,432
205
1,062
5,273
4,913
360
Of the tax liabilities, €648 million (previous year: €629 million)
relates to VAT, €427 million (previous year: €399 million) to cus-
toms and duties, and €180 million (previous year: €168 million)
to other tax liabilities.
The liabilities from the sale of residential building loans re-
late to obligations of Deutsche Post AG to pay interest subsidies
to borrowers to offset the deterioration in borrowing terms in
conjunction with the assignment of receivables in previous years,
as well as pass-through obligations from repayments of principal
and interest for residential building loans sold.
Miscellaneous other liabilities include a large number of
individual items.
39.1 Maturity structure
€ m
Up to 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
Other liabilities
2018
4,432
95
36
22
14
38
2019
4,913
155
79
54
35
37
4,637
5,273
There is no significant difference between the carrying amounts
and the fair values of the other liabilities due to their short ma-
turities or market interest rates. There is no significant interest
rate risk because most of these instruments bear floating rates
of interest at market rates.
136
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Lease disclosures
40 Lease disclosures
Currency translation gains on lease liabilities totalled €30 million
(previous year: €27 million), whilst the related losses amounted
to €32 million (previous year: €56 million).
The right-of-use assets carried as non-current assets re-
sulting from leases are presented separately in the following
table:
Right-of-use assets
€ m
31 December 2018
Accumulated cost
of which additions
Accumulated
depreciation and
impairment losses
Carrying amount
31 December 2019
Accumulated cost
of which additions
Accumulated
depreciation and
impairment losses
Carrying amount
Land and
buildings
Technical
equipment and
machinery
IT systems,
operating and
office equipment
Aircraft
Transport
equipment
Advance
payments and
assets under
development
9,003
1,801
1,311
7,692
10,538
2,125
2,543
7,995
186
52
54
132
232
74
88
144
9
1
7
2
9
1
7
2
1,476
341
334
1,142
1,644
292
601
1,043
731
201
198
533
866
233
343
523
2
1
0
2
0
2
0
0
Total
11,407
2,397
1,904
9,503
13,289
2,727
3,582
9,707
In the real estate area, the Group primarily leases warehouses,
office buildings and mail and parcel centres. The leased air-
craft are predominantly deployed in the air network of the
Express segment. Leased transport equipment also includes
the leased vehicle fleet. The real estate leases in particular are
long-term leases. The Group had around 64 real estate leases
with remaining lease terms of more than twenty years as at
31 December 2019 (previous year: 65 leases). Aircraft leases
have remaining lease terms of up to eleven years. Leases may
include extension and termination options,
note 6. The leases
are negotiated individually and include a wide range of different
conditions. Lease liabilities are presented in the following table:
€ m
Non-current lease liabilities
Current lease liabilities
Total
2018
7,756
2,103
9,859
2019
8,145
2,156
10,301
Financial liabilities under leases of €1,894 million (previous year:
€1,722 million) was repaid and interest on leases of €416 mil-
lion (previous year: €376 million) was paid in financial year 2019.
Future cash outflows amounted to €13 billion (previous year:
€12 billion) as at the reporting date,
note 42.
Possible future cash outflows amounting to €1.5 billion
(previous year: €1.3 billion) were not included in lease liabilities
because it is not reasonably certain that the leases will be ex-
tended (or not terminated).
Leases that the Group has entered into as a lessee but that
have not yet commenced result in possible future payment out-
flows totalling €0.2 billion (previous year: €0.4 billion).
137
Deutsche Post DHL Group – 2019 Annual Report
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MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Cash flow disclosures
41 Cash flow disclosures
The following table shows the reconciliation of changes in lia-
bilities arising from financing activities in accordance with the
IFRS requirements:
Liabilities arising from financing activities
€ m
Balance at 1 January 2018
Cash changes 2
Non-cash changes
Leases
Currency translation
Fair value adjustment
Other changes
Balance at 31 December 2018 / 1 January 2019
Cash changes 2
Non-cash changes
Leases
Currency translation
Fair value adjustment
Other changes
Balance at 31 December 2019
Bonds
5,350
149
0
0
0
–27
5,472
– 93
0
0
0
88
5,467
Amounts due to
banks
Lease liabilities
Other financial
liabilities 1
156
81
0
–2
0
29
264
183
0
–3
0
24
468
9,416
–2,098
2,454
89
0
–2
9,859
–2,310
2,714
130
0
– 92
10,301
165
432
0
–1
1
33
630
–265
0
2
–1
–1
365
Total
15,087
–1,436
2,454
86
1
33
16,225
–2,485
2,714
129
–1
19
16,601
1 Differences from the financial liabilities presented in
note 38 (other financial liabilities and financial liabilities at fair value through profit or loss) in the amount of €373 million
( previous year: €237 million) are due to factors presented in other cash flow items, e. g., derivatives, contingent consideration from company acquisitions or operating financial liabilities.
2 Differences in cash changes from the total amount of net cash used in financing activities (€–4,112 million; previous year: €–3,039 million) are primarily due to interest payments in
addition to payments relating to equity transactions. The interest payments reported in the cash flow statement also include payments that do not relate to liabilities from financing
activities.
As at the reporting date, there were no hedges attributable solely
to the liabilities arising from financing activities. The effects on
cash flows from hedges are presented in the “Other financing
activities” cash flow item in the amount of €40 million.
41.1 Net cash from operating activities
At €6,049 million, net cash from operating activities was
€253 million higher than in the prior-year period (€5,796 million).
Proceeds from the sale of the Supply Chain business in China
are shown in net cash used in investing activities. Provisions
changed from €282 million to €–506 million, mainly due to the
early retirement programme in the former Post - eCommerce -
Parcel division.
Non-cash income and expenses are as follows:
Non-cash income and expenses
€ m
Expense from the remeasurement of assets
Income from the remeasurement of liabilities
Gains (–) / losses (+) on asset disposals
Staff costs relating to equity-settled
share-based payments
Other
Non-cash income (–) and expenses (+)
2018
96
–140
–2
57
2
13
2019
86
–203
1
55
4
– 57
138
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Liquidity management
The ultimate objective of liquidity management is to secure the
solvency of Deutsche Post DHL Group and all Group companies.
Consequently, liquidity in the Group is centralised as much as
possible 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.
As at 31 December 2019, the Group had central liquidity
reserves of €3.5 billion (previous year: €4.3 billion), consisting
of central financial investments amounting to €1.5 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:
41.2 Net cash used in investing activities
Net cash used in investing activities decreased from €2,777 mil-
lion to €2,140 million. A net amount of €653 million was received
from the sale of the Supply Chain business in China. In addition,
€49 million was received mainly from the sale of the power pack-
aging business in the United States, the Supply Chain business
in Switzerland, the Colombian document business and sales as
part of a partnership with Austrian Post:
Disposal of assets and liabilities
€ m
Non-current assets
Current assets (excluding cash and cash equivalents)
Cash and cash equivalents
Non-current provisions and liabilities
Current provisions and liabilities
2019
67
45
2
35
34
Another cash inflow of €800 million stemmed from the sale of
money market funds. Investments in intangible assets and prop-
erty, plant and equipment amounted to €3.6 billion, €1.1 billion
of which was spent on modernising the Express intercontinental
aircraft fleet.
41.3 Net cash used in financing activities
At €4,112 million, net cash used in financing activities was signifi-
cantly higher (€1,073 million) than in the previous year, which
included issue proceeds totalling €1.2 billion from the issuance
of promissory note loans and a bond. In the reporting period, in
contrast, cash inflow of €349 million related to the assumption
of loans.
Further details on the cash flow statement and free cash
flow can be found in the
Combined Management Report, page 44 f.
Other disclosures
42 Risks and financial instruments of the Group
42.1 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 Group
manages these risks centrally through the use of non-derivative
and derivative financial instruments. Derivatives are used exclu-
sively 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 relation-
ships. Portfolios of derivatives are regularly reconciled with the
banks concerned.
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 as-
signed to the banks are reviewed on a daily basis. The Group’s
Board of Management is informed internally at regular intervals
about existing financial risks and the hedging instruments de-
ployed to mitigate them. Financial instruments are accounted for
and measured in accordance with IFRS 9. The Group exercised
the option to continue to apply hedge accounting in accordance
with IAS 39.
Disclosures regarding risks associated with the Group’s de-
fined benefit retirement plans and their mitigation can be found
in
note 36.5.
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MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Maturity structure of financial liabilities
€ m
At 31 December 2019
Non-current financial liabilities 1
Non-current lease liabilities
Other non-current financial liabilities
Non-current financial liabilities
Current financial liabilities
Current lease liabilities
Trade payables
Other current financial liabilities
Current financial liabilities
At 31 December 2018
Non-current financial liabilities 1
Non-current lease liabilities
Other non-current financial liabilities
Non-current financial liabilities
Current financial liabilities
Current lease liabilities
Trade payables
Other current financial liabilities
Current financial liabilities
1 The convertible bond 2025 is contained in the “More than 5 years” range.
Up to 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
487
1,843
12
2,342
616
1,821
15
2,452
904
1,547
10
2,461
846
1,449
12
2,307
692
1,236
8
1,936
730
1,222
10
1,962
567
909
7
1,483
761
958
8
1,727
75
0
0
75
1,059
2,232
7,225
327
10,843
85
0
0
85
468
2,137
7,422
341
10,368
3,684
4,970
14
8,668
3,583
4,466
21
8,070
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Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The maturity structure of the derivative financial instruments
based on cash flows is as follows:
Maturity structure of derivative financial instruments
€ m
Up to 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
At 31 December 2019
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 2018
Derivative receivables –
gross settlement
Cash outflows
Cash inflows
Net settlement
Cash inflows
Derivative liabilities –
gross settlement
Cash outflows
Cash inflows
Net settlement
Cash outflows
–1,360
1,387
0
–1,870
1,853
–1
–1,853
1,900
4
–1,231
1,211
–3
– 64
66
0
–11
11
0
–1
1
0
–20
20
–1
–31
32
0
–10
10
0
0
0
0
–11
11
0
–1
1
0
–11
11
0
0
0
0
–10
10
0
0
0
0
–1
1
0
0
0
0
–7
7
0
0
0
0
0
0
0
0
0
0
0
0
0
CURRENCY RISK AND CURRENCY MANAGEMENT
The international business activities of Deutsche Post DHL Group
expose it to currency risks from recognised or planned future
transactions:
On-balance sheet currency risks arise from the meas-
urement and settlement of recognised foreign currency items
if the exchange rate on the measurement or settlement date
differs from the rate at initial recognition. The resulting foreign
exchange differences directly impact profit or loss. In order to
mitigate this impact as far as possible, all significant on-bal-
ance sheet currency risks within the Group are centralised in
Deutsche Post AG’s in-house bank function. The centralised cur-
rency 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 portfolio totalled €3 million (pre-
vious year: €5 million) at the reporting date; the limit is currently
a maximum of €5 million. The notional amount of the currency
forwards and currency swaps used to manage on-balance sheet
currency risks amounted to €2,980 million at the reporting date
(previous year: €2,293 million); the fair value was €–1 million
(previous year: €23 million). Hedge accounting was not applied.
Derivatives are accounted for as trading derivatives (free-stand-
ing derivatives).
Currency risks arise from planned foreign currency trans-
actions if the future transactions are settled at exchange rates
that differ from the originally projected rates. These currency
risks are also captured centrally in Corporate Treasury. Currency
risks from planned transactions and transactions with existing
contracts are only hedged in selected cases. The relevant hedged
items and derivatives used for hedging purposes are accounted
for using cash flow hedge accounting,
note 42.3.
The contract terms stipulate how the parties must meet their
obligations arising from derivative financial instruments, either
by net or by gross settlement.
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GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Currency risks also result from translating assets and liabil-
ities of foreign operations into the Group’s currency (translation
risk). No translation risks were hedged at the reporting date.
Currency forwards and currency swaps in a notional
amount of €3,377 million (previous year: €3,363 million) were
outstanding at the reporting date. The corresponding fair value
was €3 million (previous year: €23 million).
Of the unrealised gains or losses from currency derivatives
recognised in equity as at 31 December 2019, €4 million (previ-
ous year: €2 million) is expected to be recognised in income in
the course of the following year.
IFRS 7 requires the disclosure of quantitative risk data,
showing 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 represen-
tative for the full year. The following assumptions are used as a
basis for the sensitivity analysis:
Primary financial instruments in foreign currencies used
by Group companies are hedged by Deutsche Post AG’s in-house
bank. Deutsche Post AG determines monthly exchange rates and
guarantees these to the Group companies. Exchange rate-re-
lated changes therefore have no effect on the profit or loss and
equity of the Group companies. Where 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.
The following table presents currency-related effects on
value at risk:
Risk data on currency risk
€ m
2018
2019
Profit or loss effects
Equity effects
Profit or loss effects
Equity effects
Primary financial instruments and free-standing
derivatives
Derivative instruments (cash flow hedges)
Total value at risk 1
5
3
11
12
5
7
1 The total amount is lower than the sum of the individual amounts, owing to interdependencies.
INTEREST RATE RISK AND INTEREST RATE MANAGEMENT
No interest rate hedging instruments were recognised as at the
reporting date. The proportion of financial liabilities with short-
note 38, amounts to 19 % (previous year:
term interest lock-ins,
17 %) of the total financial liabilities as at the reporting date. The
effect of potential interest rate changes on the Group’s financial
position remains insignificant.
MARKET RISK
Most of the risks arising from commodity price fluctuations,
in particular fluctuating prices for kerosene and marine diesel
fuels, were passed on to customers via operating measures. As
the impact of the related fuel surcharges is delayed by one to
two months, earnings may be affected temporarily if there are
significant short-term fuel price variations.
A small number of diesel and marine diesel swaps are used
to hedge residual risks arising from commodity price fluctu-
ations. The impact of market price changes on hedging derivatives,
and therefore on the Group’s earnings, is negligible.
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GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
CREDIT RISK
Credit risk arises for the Group from operating activities and from
financial transactions. The aggregate carrying amount of finan-
cial assets represents the maximum default risk.
In an effort to minimise credit risk from operating activities
and financial transactions, counterparties are assigned individ-
ual limits, the utilisation of which is regularly monitored. The
Group’s heterogeneous customer structure means that there is
no risk concentration. Financial transactions are only entered
into with prime-rated counterparties. A test is performed at the
reporting dates to establish whether an impairment loss needs
to be charged on financial assets and the positive fair values of
derivatives due to changes in credit quality. This was not the case
for any of the counterparties as at 31 December 2019.
The credit risk of financial assets arising from operations
is managed by the divisions.
As a rule, the expected credit loss associated with financial
assets must be determined. Based on the expected credit loss
model (impairment model), a loss allowance must be anticipated
for the possible credit loss,
note 6.
The impairment model is applicable to non-current and
current debt instruments recognised at amortised cost and to
lease receivables. Debt instruments comprise mainly deposits,
collateral provided and loans to third parties.
The gross amounts of financial assets subject to the impair-
ment model are presented in the following table:
Stage 1 – twelve-month ECL
€ m
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
Balance at 1 January 2019
991
–26
965
Newly originated financial
assets
Impairment loss
Disposal
Reversal of loss allowance
Increase in loss allowance
Currency translation
differences
Reclassifications
Changes in consolidated group
Balance at 31 December 2019
Balance at 1 January 2018
Newly originated financial
assets
Impairment loss
Disposal
Reversal of loss allowance
Increase in loss allowance
Currency translation
differences
Reclassifications
Changes in consolidated group
Balance at 31 December 2018
823
–2
– 643
–
–
11
– 4
–11
1,165
987
667
–17
– 572
–
–
1
– 66
– 9
991
–
–
–
22
– 24
–
–
–
–28
–27
–
–
–
17
–16
–
–
–
–26
823
–2
– 643
22
–24
11
– 4
–11
1,137
960
667
–17
– 572
17
–16
1
– 66
– 9
965
All debt instruments and lease receivables were recognised
in Stage 1 at the reporting date; they were neither past due nor
impaired. There were no indications at the reporting date of any
poor performance of the debt instruments and lease receiv-
ables. There was no reclassification between the stages in the
financial year.
Trade receivables from customer relationships amounting
to €8,561 million were due within one year at the reporting date
(previous year: €8,247 million). They are held primarily with the
aim of collecting the principal amount of the receivables. These
items are therefore assigned to the “held to collect contractual
cash flows” business model and measured at amortised cost.
Trade receivables changed as follows:
Changes in receivables
€ m
Gross receivables
Balance at 1 January
Changes
Balance at 31 December
Loss allowances
Balance at 1 January
Changes
Balance at 31 December
Carrying amount at 31 December
2018
2019
8,365
88
8,453
–189
–17
–206
8,247
8,453
275
8,728
–206
39
–167
8,561
No cash flows from debt instruments were modified in the finan-
cial year and no changes were made to the model for determin-
ing risk parameters. The inputs were not remeasured.
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MANAGEMENT REPORT
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GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
reporting date (previous year: €1,071 million); the fair value was
€4 million (previous year: €0 million). The hedged items will
have an impact on cash flow by 2024.
The gains and losses on open hedging instruments recog-
nised in equity at the reporting date amounted to €4 million. No
ineffective portions of hedges were recognised. In the financial
year, realised net losses of €6 million from cash flow hedges on
currency risks were recognised in other operating expenses due
to the recognition of the hedged item in profit or loss.
The following table shows the net open hedging positions
at the reporting date in the currency pairs with the highest net
positions and their weighted hedge rate.
The following table provides an overview of loss rates by age
band that were used in the Group for the financial year under
review:
42.2 Collateral
Collateral provided
€ m
Loss rates by age band
%
1 to 60 days
61 to 120 days
121 to 180 days
181 to 360 days
2018
0.1 – 0.4
0.4 – 5.0
2019
0.1 – 0.3
0.5 – 5.0
3.0 – 20.0
2.0 – 26.0
20.0 – 60.0
26.0 – 60.0
More than 360 days
80.0 – 100.0
80.0 – 100.0
Trade receivables are derecognised when a reasonable assess-
ment indicates they are no longer recoverable. The relevant indi-
cators include a delay in payment of more than 360 days.
In financial year 2019, there were factoring agreements
in place that obliged the banks to purchase existing and fu-
ture trade receivables. The banks’ purchase obligations were
limited to a maximum portfolio of receivables of €836 million.
Deutsche Post DHL Group can decide at its discretion whether,
and to what extent, the revolving notional volume is utilised. The
risks relevant to the derecognition of the receivables include
credit risk and the risk of delayed payment (late payment risk).
Credit risk represents primarily all the risks and rewards
associated with ownership of the receivables. This risk is trans-
ferred in full to the bank against payment of a fixed fee for doubt-
ful accounts. A significant late payment risk does not exist. All of
the receivables were therefore derecognised. In financial year
2019, the Group recognised programme fees (interest, allow-
ances for doubtful accounts) of €3 million (previous year: €2 mil-
lion) as an expense in the context of its continuing exposure. The
notional volume of receivables factored as at 31 December 2019
amounted to €365 million.
Non-current financial assets,
of which
for assets for the settlement of residential
building loans
for sureties paid
Current financial assets,
of which
for US cross-border leases (QTE leases)
transactions
for sureties paid
2018
2019
187
74
84
43
7
12
175
60
105
50
7
16
The collateral provided mainly relates to other financial assets.
42.3 Derivative financial instruments
FAIR VALUE HEDGES
There were no fair value hedges as at 31 December 2019, as
in the previous year. At the reporting date, unwinding interest
rate swaps resulted in carrying amount adjustments of €13 mil-
lion (previous year: €21 million) which are included in current
(€3 million) and non-current (€10 million) financial liabilities.
The carrying amount adjustments will be amortised using the
effective interest method over the remaining term of the liabil-
ities (until 2022) and will reduce future interest expense.
CASH FLOW HEDGES
The Group uses currency forwards and currency swaps to hedge
the cash flow risk from future foreign currency operating rev-
enue and expenses. The notional amount of these currency
forwards and currency swaps amounted to €396 million at the
144
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Notional volume of hedging instruments
€ m
31 December 2019
Hedging of currency risk
Currency forwards sale EUR / CZK
Currency forwards purchase EUR / JPY
Currency forwards purchase EUR / USD
31 December 2018
Hedging of currency risk
Currency forwards purchase EUR / CNY
Currency forwards sale EUR / CZK
Currency forwards purchase USD / TWD
Total notional volume
Up to 1 year
More than 1 year to 5 years
More than 5 years
Average hedge rate (€)
Remaining term
–307
20
18
340
–177
105
–179
20
18
340
–131
105
–128
0
0
0
– 46
0
0
0
0
0
0
0
26.33
124.85
1.14
8.09
26.39
29.83
The carrying amounts of derivative assets (€5 million) and liabil-
ities (€–1 million) included in cash flow hedges did not result in
ineffectiveness due to the relevant fair value changes within the
period. This is because the changes in the value of the hedged
items (€–5 million) and hedging transactions (€5 million) offset
each other.
Cash flow hedging reserve
€ m
Balance at 1 January
Gains and losses on effective hedges
Reclassification due to the recognition of
hedged items
Reclassification to the currency translation
reserve
Balance at 31 December 1
1 Excluding deferred taxes.
2018
33
–15
–30
6
– 6
2019
– 6
–3
7
0
–2
NET INVESTMENT HEDGES
Currency risks resulting from the translation of foreign opera-
tions were no longer hedged in 2019. At the reporting date, there
was still a positive amount of €25 million from terminated net
investment hedges in the currency translation reserve.
42.4 Additional disclosures on the financial instruments
used in the Group
The Group classifies financial instruments in line with the re-
spective balance sheet items. The following table reconciles the
financial instruments to the categories and their fair values as at
the reporting date:
145
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
Reconciliation of carrying amounts in accordance with IFRS 9 and level classification
€ m
ASSETS
Debt instruments measured at cost
Non-current financial assets
Current financial assets 2
Other current assets 2
Trade receivables 2
Cash and cash equivalents 2
Equity instruments at fair value through
other comprehensive income
Non-current financial assets
Equity instruments without recycling
Debt instruments and equity instruments
at fair value through profit or loss
Non-current financial assets
Debt instruments
Equity instruments
Derivatives designated as hedges
Current financial assets
Debt instruments
Trading derivatives
Derivatives designated as hedges
Not IFRS 7
Other non-current assets
Other current assets
TOTAL ASSETS
31 December 2018
31 December 2019
Level classification
Financial instruments
within the scope of IFRS 9
Level classification
Financial instruments
within the scope of IFRS 9
Financial
instruments
within the
scope of
IFRS 9
Other
financial
instruments
outside
IFRS 9 1
Carrying
amount
IFRS 7
fair value Level 1 Level 2 Level 3
Carrying
amount
Financial
instruments
within the
scope of
IFRS 9
Other
financial
instruments
outside
IFRS 9 1
IFRS 7
fair value
Level 1 Level 2 Level 3
107
95
12
12,288
12,181
499
100
425
8,247
3,017
43
43
43
404
88
425
8,247
3,017
43
43
43
493
493
n. a.
n. a.
n. a.
n. a.
43
43
43
1,031
1,031
1,031
188
187
1
843
800
29
14
188
187
1
843
800
29
14
2,297
353
1,944
188
187
1
843
800
29
14
n. a.
n. a.
n. a.
398
398
43
43
29
14
43
43
43
988
188
187
1
800
800
129
101
28
12,559
12,430
389
341
277
8,561
2,862
34
34
34
260
235
233
1
1
25
21
4
490
369
277
8,561
2,862
34
34
34
260
235
233
1
1
25
21
4
2,716
395
2,321
15,659
13,255
107
1,567
1,031
441
15,569
12,724
129
448
448
n. a.
n. a.
n. a.
n. a.
34
34
34
260
235
233
1
1
25
21
4
n. a.
n. a.
n. a.
742
347
347
26
1
1
25
21
4
34
34
34
234
234
233
1
268
373
146
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
31 December 2018
31 December 2019
Level classification
Financial instruments
within the scope of IFRS 9
Level classification
Financial instruments
within the scope of IFRS 9
Financial
instruments
within the
scope of
IFRS 9
Other
financial
instruments
outside
IFRS 9 1
IFRS 7
fair value Level 1 Level 2 Level 3
Carrying
amount
Financial
instruments
within the
scope of
IFRS 9
Other
financial
instruments
outside
IFRS 9 1
IFRS 7
fair value
Level 1 Level 2 Level 3
10,301
8,145
2,156
9,859
7,756
2,103
14,463
6,112
67
453
7,422
409
38
1
1
37
15
8
14
6,406
5,687
6,339
5,687
67
n. a.
n. a.
n. a.
38
1
1
37
15
8
14
n. a.
n. a.
n. a.
719
652
67
23
1
1
22
8
14
15
15
15
14,254
5,591
51
1,060
7,225
327
23
1
1
22
21
1
24,555
13,736
51
3,216
7,225
327
23
1
1
22
21
1
4,895
309
4,586
451
400
51
23
1
1
22
21
1
6,051
5,600
6,000
5,600
51
n.a
n. a.
n. a.
23
1
1
22
21
1
n. a.
n. a.
n. a.
Carrying
amount
24,322
13,868
67
2,556
7,422
409
38
1
1
37
15
8
14
4,161
138
4,023
EQUITY AND LIABILITIES
Liabilities measured at cost
Non-current financial liabilities 3
Other non-current liabilities
Current financial liabilities 2
Trade payables 2
Other current liabilities 2
Liabilities at fair value through profit or loss
Non-current financial liabilities 3
Earn-out obligation
Trading derivatives
Derivatives designated as hedges
Current financial liabilities
Earn-out obligation
Trading derivatives
Derivatives designated as hedges
Not IFRS 7
Other non-current liabilities
Other current liabilities
TOTAL EQUITY AND LIABILITIES
28,521
14,501
9,859
6,444
5,687
742
15
29,473
14,277
10,301
6,074
5,600
474
1 Relates to lease receivables or liabilities.
2 The fair value is assumed to be equal to the carrying amount (IFRS 7.29a). Levels are not indicated for these financial instruments.
3 The Deutsche Post AG and Deutsche Post Finance B. V. bonds included in non-current financial liabilities are carried at amortised cost. Where required, the carrying amounts of unwound interest rate swaps were adjusted. The bonds are therefore not recognised fully at either
fair value or amortised cost. The convertible bond issued by Deutsche Post AG in December 2017 had a fair value of €1,024 million as at the reporting date. The fair value of the debt component at the reporting date was €990 million.
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MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
If there is an active market for a financial instrument (e. g. a stock
exchange), its fair value is determined by reference to the market
or quoted exchange price at the reporting date. If no fair value
is available in an active market, quoted market prices for simi-
lar instruments or recognised valuation techniques are used to
determine fair value.
As in the previous year, no financial instruments were trans-
ferred between levels in financial year 2019.
The following table documents the net gains and losses of
the categories of financial instruments:
Net gains and losses by measurement category
IFRS 13 requires financial assets to be assigned to the ap-
€ m
propriate level of the fair value hierarchy:
Level 1 comprises equity and debt instruments measured
at fair value and debt instruments measured at amortised cost
whose fair values can be determined based on quoted market
prices.
In addition to financial assets and financial liabilities meas-
ured at amortised cost, commodity, interest rate and currency
derivatives are reported under Level 2. The fair values of assets
measured at amortised cost are determined using the multiplier
method, amongst other things. The fair values of the derivatives
are measured on the basis of discounted expected future cash
flows, taking into account forward rates for currencies, inter-
est rates and commodities (market approach). For this purpose,
price quotations observable in the market (exchange rates, in-
terest rates and commodity prices) are imported from standard
market information platforms into the treasury management
system. The price quotations reflect actual transactions involv-
ing similar instruments on an active market. All significant inputs
used to measure derivatives are observable in the market.
Level 3 comprises mainly the fair values of equity invest-
ments and derivatives associated with M & A transactions. Rec-
ognised valuation models that reflect plausible assumptions are
used to calculate the fair values.
In the financial year, the financial instruments assigned to
Level 3 resulted in effects of €–20 million in other comprehen-
sive income. Another €2 million was recognised as income in the
income statement.
2018
2019
Net gains and losses on financial assets
Debt instruments at amortised cost
Net gains (+) / losses (–) recognised in profit or loss
–138
– 91
Debt instruments at fair value through profit or loss
(FVTPL)
Net gains (+) / losses (–) recognised in profit or loss
–11
– 40
Net gains / losses on financial liabilities
Debt instruments at fair value through profit or loss
(FVTPL)
Net gains (+) / losses (–) recognised in profit or loss
Debt instruments at amortised cost
Net gains (+) / losses (–) recognised in profit or loss
8
1
– 45
1
The net gains and losses mainly include the effects of fair value
measurement, impairment and disposals of financial instru-
ments. Dividends and interest are not taken into account for the
financial instruments measured at fair value through profit or
loss. Interest income and expenses and expenses from commis-
sion agreements relating to financial instruments measured at
amortised cost are recognised separately in the income state-
ment.
The following tables show the impact of netting agree-
ments based on master netting arrangements or similar agree-
ments on financial assets and financial liabilities as at the re-
porting date:
148
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GOVERNANCE
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NOTES
FURTHER INFORMATION
Offsetting – assets
€ m
At 31 December 2019
Derivative financial assets
Trade receivables
Funds
At 31 December 2018
Derivative financial assets
Trade receivables
Funds
Offsetting – liabilities
€ m
At 31 December 2019
Derivative financial liabilities
Trade payables
Funds
At 31 December 2018
Derivative financial liabilities 1
Trade payables
Funds
1 Excluding derivatives from M & A transactions.
Gross amount of assets
Gross amount of
liabilities set off
Recognised
net amount of
assets set off
Liabilities that do not
meet offsetting criteria
Collateral received
Assets and liabilities not set off
in the balance sheet
26
8,616
648
43
8,382
579
0
55
648
0
135
579
26
8,561
0
43
8,247
0
6
0
0
9
0
0
0
0
0
0
0
0
Gross amount of
liabilities
Gross amount of
assets set off
Recognised
net amount of
liabilities set off
Assets that do not
meet offsetting criteria
Collateral received
Assets and liabilities not set off
in the balance sheet
23
7,280
656
23
7,557
588
0
55
648
0
135
579
23
7,225
8
23
7,422
9
6
0
0
9
0
0
0
0
0
0
0
0
Total
20
8,561
0
34
8,247
0
Total
17
7,225
8
14
7,422
9
149
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
To hedge cash flow and fair value risks, Deutsche Post AG en-
ters 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 tables.
Settlement processes arising from services related to
postal deliveries are subject to the Universal Postal Convention
and the Interconnect Remuneration Agreement – Europe (IRA-E).
These agreements, particularly the settlement conditions, are
binding on all public postal operators for the specified contrac-
tual arrangements. Imports and exports between the parties
to the agreement during a calendar year are summarised in an
annual statement of account and presented on a net basis in the
final annual statement. Receivables and payables covered by the
Universal Postal Convention and the IRA-E agreement are pres-
ented on a net basis at the reporting date. In addition, funds are
presented on a net basis if a right of set-off exists in the normal
course of business. The tables show the receivables and payables
before and after offsetting.
43 Contingent liabilities and other financial obligations
Contingent liabilities
€ m
Guarantee obligations
Warranties
Liabilities from litigation risks
Other contingent liabilities
Total
2018
2019
102
21
304
561
988
95
22
284
485
886
In addition to provisions and liabilities, the Group has contingent
liabilities and other financial obligations.
Other contingent liabilities also include a potential obliga-
tion to make settlement payments in the USA, which had arisen
in 2014 mainly as a result of a change in the estimated settlement
payment obligations assumed in the context of the restructuring
measures in the USA, and other tax-related obligations.
Other financial obligations such as the purchase obligation
for investments in non-current assets amounted to €1,068 mil-
lion (previous year: €1,366 million).
44 Litigation
Many of the 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). As the regula-
tory authority, the Bundesnetzagentur approves or reviews such
prices, formulates the terms of downstream access and has spe-
cial supervisory powers to combat market abuse. This general
regulatory risk could lead to a decline in revenue and earnings
in the event of negative decisions.
Legal risks arise, amongst other things, from the pending
administrative court appeal by an association against the price
approval granted by the Bundesnetzagentur under the price cap
procedure for 2016 to 2018. The complaint was dismissed by
the Cologne Administrative Court, the court of first instance, by
way of a ruling handed down on 4 December 2018. The claimant
has applied to the Federal Administrative Court for a “leapfrog
appeal”, asserting that the decision by the Bundesnetzagentur
is unlawful for various reasons. The Bundesnetzagentur and
Deutsche Post AG do not share the claimant’s opinion.
In its ruling of 28 June 2016, the Bundesnetzagentur
determined that the prices for the Dialogpost “Impulspost”
product did not meet the pricing standards of the Postgesetz.
The agency ordered the prices to be adjusted immediately
(adjustment request). According to the Bundesnetzagentur,
the prices did not cover the cost of efficiently providing the
service and had anti- competitive effects. On 26 July 2016, the
Bundesnetzagentur barred Deutsche Post from charging these
prices and declared the prices invalid (prohibitive order), since at
this time Deutsche Post AG had not yet complied with the adjust-
ment request. Deutsche Post AG does not share the legal opinion
of the Bundesnetzagentur and filed an appeal with the Cologne
Administrative Court against the orders issued by the agency.
The complaints were dismissed by the Administrative Court of
Cologne. Insofar as the complaint against the adjustment request
was dismissed, Deutsche Post AG filed an appeal with Münster
Higher Administrative Court.
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 sub-
ject to individually negotiated agreements or provided on special
terms (discounts, etc.). Deutsche Post AG and the tax authorities
hold different opinions on the VAT treatment of certain products.
In the interest of resolving these issues, proceedings have been
initiated by Deutsche Post AG at the tax court with jurisdiction
in this matter,
note 43.
On 30 June 2014, DHL Express France received a state-
ment of objections from the French competition authority al-
leging anti-competitive conduct with regard to fuel surcharges
and price fixing in the domestic express business, a business
which had been divested in June 2010. The French competition
authority made its decision on 15 December 2015. The decision
to fine DHL was confirmed by the Paris Court of Appeals on
19 July 2018 and DHL Express France is appealing it before the
Cour de Cassation (Supreme Court).
In view of the ongoing or announced legal proceedings
mentioned above, no further details are given on their presenta-
tion in the financial statements.
45 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 pay-
ments for executives. All assumptions are reviewed on a quar-
terly basis. The staff costs are recognised pro rata in profit or
150
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NOTES
FURTHER INFORMATION
loss to reflect the services rendered as consideration during
the vesting period (lock-up period). In the financial year, a to-
tal of €112 million was recognised for share-based payments,
€50 million of which were cash-settled and €62 million of
which were equity-settled.
45.1 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 (deferred 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
Share Matching Scheme
Grant date of incentive shares and associated matching shares
Grant date of matching shares awarded for investment shares
Term
End of term
Share price at grant date (fair value)
Incentive shares and associated matching shares
Matching shares awarded for investment shares
Number of deferred incentive shares
Number of matching shares expected
Deferred incentive shares
Investment shares
Matching shares issued
1 Estimated provisional amount, will be determined on 1 April 2020.
2 Expected number.
months
€
€
thousands
thousands
thousands
thousands
be employed by the Group, they again receive the same number
of Deutsche Post AG shares (matching shares). Assumptions are
made regarding the conversion behaviour of executives with
respect to their relevant bonus portion. Share-based payment
arrangements are entered into each year, with 1 December (from
financial year 2015; until 2014: 1 January) of the respective year
and 1 April of the following year being the grant dates for each
year’s tranche. Whereas incentive shares and matching shares
are classified as equity-settled share-based payments, invest-
ment shares are compound financial instruments and the debt
and equity components must be measured separately. However,
in accordance with IFRS 2.37, only the debt component is meas-
ured due to the provisions of the Share Matching Scheme. The
investment shares are therefore treated as cash-settled share-
based payments.
In the first quarter of 2019, a decision was made not to
grant a variable remuneration component to executives (exclud-
ing members of the Board of Management) for the 2018 finan-
cial year. This is why there was no 2018 tranche of the Share
Matching Scheme. As an alternative, executives were granted
a voluntary investment in shares of Deutsche Post AG. This in-
vestment could be made as a contribution or in the form of freely
available Deutsche Post AG shares in the securities account. The
availability date was 1 July 2019.
€37 million of the expenses under the Share Matching
Scheme (previous year: €37 million) was attributable to equi-
ty-settled share-based payments. €25 million related to cash-set-
tled share-based payments for investment shares (previous year:
€27 million), all of which were unvested as at 31 December 2019.
Additional information on granting and settlement of these
rights can be found in
note 32 and 33.
2014 tranche
1 Jan. 2014
1 April 2015
63
2015 tranche
1 Dec. 2015
1 April 2016
52
2016 tranche
1 Dec. 2016
1 April 2017
52
2017 tranche
1 Dec. 2017
1 April 2018
52
Alternative programme
2018 tranche
–
1 March 2019
52
2019 tranche
1 Dec. 2019
1 April 2020
52
March 2019
March 2020
March 2021
March 2022
June 2023
March 2024
25.91
29.12
332
n. a.
n. a.
903
27.12
23.98
366
329
848
29.04
31.77
320
288
901
39.26
34.97
256
230
864
27.30
–
–
384
33.29
34.00 1
194 2
175
651
151
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
45.2 Long-Term Incentive Plan (2006 LTIP) for members
of the Board of Management
Since financial year 2006, the company has granted members
of the Board of Management cash remuneration linked to the
company’s long-term share price performance through the issue
of stock appreciation rights (SAR s) as part of a Long-Term In-
centive Plan (LTIP). Participation in the LTIP requires Board of
Management members to make a personal investment of 10 %
of their annual base salary by the grant date of each tranche, pri-
marily in shares.
The SAR s granted can be fully or partly exercised after the
expiration of a four-year lock-up period at the earliest, provided
absolute or relative performance targets have been achieved at
the end of this lock-up period. After expiration of the lock-up
period, the SAR s must be exercised within a period of two years
(exercise period); any SAR s not exercised expire.
How many, if any, of the SAR s granted can be exercised
is determined in accordance with four (absolute) performance
targets based on the share price and two (relative) performance
targets based on a benchmark index. One-sixth of the SAR s
granted are earned each time the closing price of Deutsche Post
shares exceeds the issue price by at least 10, 15, 20 or 25 % at
the end of the waiting period (absolute performance targets).
Both relative performance targets are tied to the performance
of the shares in relation to the STOXX Europe 600 Index (SXXP;
ISIN EU0009658202). They are met if the share price equals
the index performance or if it outperforms the index by more
than 10 %. Performance is determined by comparing the aver-
age price of Deutsche Post shares or the average index value
during a reference and a 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 lock-up period. The average (closing)
price is calculated as the average closing price of Deutsche Post
shares in Deutsche Börse AG’s Xetra trading system. If absolute
or relative performance targets are not met by the end of the
lock-up period, the SAR s attributable to them will expire without
replacement or compensation. Each SAR exercised entitles the
Board of Management member 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.
2006 LTIP
2014 tranche
2015 tranche
2016 tranche
2017 tranche
2018 tranche
2019 tranche
Issue date
Issue price Waiting period expires
1 September 2014
1 September 2015
1 September 2016
1 September 2017
1 September 2018 1
1 September 2019
€24.14
€25.89
€28.18
€34.72
€31.08
€28.88
31 August 2018
31 August 2019
31 August 2020
31 August 2021
31 August 2022
31 August 2023
1 On the grant date of 1 November 2018 (John Gilbert), the issue price was €28.69; the waiting period ends on 31 October 2022.
The Board of Management members received a total of 2,322,978
SAR s (previous year: 1,191,840 SAR s) with a total value, at the
time of issue, of €9.90 million (previous year: €5.43 million).
A stochastic simulation model is used to determine a fair
value for the SAR s from the 2006 LTIP. As a result, an expense
of €26 million (previous year: income of €50 million) for finan-
cial year 2019 and a provision of €23 million (previous year:
€8 million) as at the balance sheet date were recognised that
were attributable entirely to the Board of Management members
(previous year: €6 million) upon expiration of the last tranche for
executives in July 2019. The provision for the rights exercisable
by the Board of Management amounted to €17 million at the re-
porting date (previous year: €5 million).
For further disclosures on share-based payment for mem-
bers of the Board of Management, see
note 46.2.
45.3 SAR Plan for executives
From July 2006 to August 2013, selected executives received
annual tranches of SAR s under the SAR Plan. This allowed 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 tar-
gets are met (see disclosures on the 2006 LTIP for members
of the Board of Management). Starting in 2014, SAR s were no
longer issued to executives under the SAR Plan.
The exercise period of the last SAR tranche (2013) expired
on 31 July 2019 and no more obligations therefore arise from
the SAR Plan for executives. The Performance Share Plan (PSP)
for executives replaces the SAR Plan.
152
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FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
45.4 Performance Share Plan for executives
The Annual General Meeting on 27 May 2014 resolved to intro-
duce the Performance Share Plan (PSP) for executives. This plan
replaces the former share-based payment system (SAR Plan) for
executives. Whereas the SAR Plan involved cash-settled share-
based payments, under the PSP shares are issued to participants
at the end of the waiting period. Under the PSP, the granting of
the shares at the end of the waiting period is also linked to the
achievement of demanding performance targets. The perfor-
mance targets under the PSP are identical with the performance
targets under the LTIP for members of the Board of Management.
Performance Share Units (PSUs) were issued to selected
executives under the PSP for the first time on 1 September 2014.
It is not planned that members of the Board of Management will
participate in the PSP. The Long-Term Incentive Plan (2006 LTIP)
for members of the Board of Management remains unchanged.
In the consolidated financial statements as at 31 Decem-
ber 2019, a total of €25 million (previous year: €26 million) has
been appropriated to capital reserves for the purposes of the
plan, with an equal amount recognised in staff costs.
The value of the PSP is measured using actuarial methods
based on option pricing models (fair value measurement).
Future dividends were taken into account, based on a
moderate increase in dividend distributions over the respective
measurement period.
The average remaining maturity of the outstanding PSUs
as at 31 December 2019 was 27 months.
Performance Share Plan
Grant date
Exercise price
Waiting period expires
Risk-free interest rate
Initial dividend yield of Deutsche Post shares
Yield volatility of Deutsche Post shares
Yield volatility of Dow Jones EURO STOXX 600 Index
Covariance of Deutsche Post shares to Dow Jones EURO STOXX 600 Index
Quantity
Rights outstanding at 1 January 2019
Rights granted
Rights lapsed
Rights settled at the end of the waiting period
Rights outstanding at 31 December 2019
2015 tranche
2016 tranche
2017 tranche
2018 tranche
2019 tranche
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
€25.89
€28.18
€34.72
€31.08
€28.88
31 August 2019
31 August 2020
31 August 2021
31 August 2022
31 August 2023
– 0.10 %
3.28 %
24.69 %
16.40 %
2.94 %
– 0.62 %
3.73 %
23.94 %
16.83 %
2.93 %
– 0.48 %
3.31 %
23.03 %
16.34 %
2.78 %
– 0.39 %
3.70 %
22.39 %
16.29 %
2.66 %
3,605,772
3,442,308
2,935,674
3,319,308
0
1,863,759
1,742,013
0
0
203,814
0
3,238,494
0
185,136
0
2,750,538
0
155,790
0
3,163,518
– 0.90 %
4.33 %
21.38 %
14.79 %
2.21 %
0
3,522,078
15,774
0
3,506,304
153
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
46 Related party disclosures
46.1 Related party disclosures (companies and Federal
Republic of Germany)
All of the companies below that are controlled by the Group
or over which the Group can exercise significant influence are
rec orded in the list of shareholdings, on the company’s website
dpdhl.com/en/investors.
Deutsche Post AG maintains a variety of relationships with
the Federal Republic of Germany (Federal Republic) and other
companies controlled by the Federal Republic of Germany.
The Federal Republic 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 author-
ities and other government agencies as independent individual
customers. The services provided for these customers are insig-
nificant in respect of Deutsche Post AG’s overall revenue.
RELATIONSHIPS WITH KFW
KfW supports the Federal Republic in continuing to privatise
companies such as Deutsche Post AG or Deutsche Telekom AG.
In 1997, KfW, together with the Federal Republic, developed a
“placeholder model” as a tool to privatise government-owned
companies. Under this model, the Federal Republic sells all or
part of its investments to KfW with the aim of fully privatising
these state-owned companies. On this basis, KfW has pur-
chased shares of Deutsche Post AG from the Federal Republic
in several stages since 1997 and executed various capital mar-
ket transactions using these shares. KfW’s current interest in
Deutsche Post AG’s share capital is 20.5 %. Deutsche Post AG is
thus considered to be an associate of the Federal Republic.
RELATIONSHIPS WITH BUNDESANSTALT FÜR POST UND
TELEKOMMUNIKATION
The Bundesanstalt für Post und Telekommunikation (BAnst PT)
is a government agency and falls under the technical and legal
supervision of the German Federal Ministry of Finance. The
BAnst PT continues to manage the social facilities such as the
postal civil servant health insurance fund, the recreation pro-
gramme, the Postbeamtenversorgungskasse (PVK – Postal civil
servant pension fund), the Versorgungsanstalt der Deutschen
Bundespost (VAP – Deutsche Bundespost institution for sup-
plementary retirement pensions) and the welfare service for
Deutsche Post AG, Deutsche Postbank AG and Deutsche Tele-
kom AG. Tasks are performed on the basis of agency agree-
ments. In 2019, Deutsche Post AG was invoiced for €137 million
(previous year: €129 million) in instalment payments relating to
services provided by the BAnst PT. Further disclosures on the
PVK and the VAP can be found in
notes 6 and 36.
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 Fehlsubventionierung im
Wohnungswesen (German Acts on the Reduction of Misdirected
Housing Subsidies) relating to housing benefits granted by
Deutsche Post AG. A lump-sum payment is made to the Federal
Republic each year after a review.
Deutsche Post AG entered into an agreement with the Ger-
man 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 trans-
ferred permanently if they successfully complete their probation.
Once a permanent transfer is completed, Deutsche Post AG con-
tributes to the cost incurred by the Federal Republic by paying a
flat fee. In 2019, this initiative resulted in 57 permanent transfers
(previous year: 22) and 5 secondments with the aim of a perma-
nent transfer in 2020 (previous year: 22).
RELATIONSHIPS WITH THE GERMAN FEDERAL EMPLOYMENT
AGENCY
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 Em-
ployment Agency. In 2019, this initiative resulted in 3 permanent
transfers (previous year: 35).
RELATIONSHIPS WITH DEUTSCHE BAHN AG AND ITS
SUBSIDIARIES
Deutsche Bahn AG is wholly owned by the Federal Republic.
Owing to this control relationship, Deutsche Bahn AG is a related
party to Deutsche Post AG. Deutsche Post DHL Group has vari-
ous business relationships with the Deutsche Bahn Group. These
mainly consist of transport service agreements.
RELATIONSHIP WITH PENSION FUNDS
The real estate with a fair value of €1,502 million (previous
year: €1,424 million) – which can be offset as plan assets – of
which Deutsche Post Pensions-Treuhand GmbH & Co. KG,
Deutsche Post Altersvorsorge Sicherung e. V. & Co. Objekt
Gronau KG and Deutsche Post Grundstücks-Vermietungs-
gesellschaft beta mbH Objekt Leipzig KG are the legal owners, is
let to Deutsche Post Immobilien GmbH. These arrangements led
to lease liabilities of €509 million as at 31 December 2019 (previ-
ous year: €493 million). In 2019, Deutsche Post Immobi lien GmbH
extinguished €21 million in lease liabilities and paid €17 million
in interest. Deutsche Post Pensions-Treuhand GmbH & Co. KG
owns 100 % of Deutsche Post Pensionsfonds AG. Further disclo-
sures on pension funds can be found in
notes 6 and 36.
154
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
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2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
RELATIONSHIPS WITH UNCONSOLIDATED COMPANIES,
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
AND JOINT OPERATIONS
In addition to the consolidated subsidiaries, the Group has dir-
ect and indirect relationships with unconsolidated companies,
investments accounted for using the equity method and joint op-
erations deemed to be related parties of the Group in the course
of its ordinary business activities.
Transactions were conducted in financial year 2019 with
major related parties, resulting in the following items in the con-
solidated financial statements:
€ m
Trade receivables
Loans
Receivables from in-house banking
Financial liabilities
Trade payables
Income 1
Expenses 2
1 Relates to revenue and other operating income. 2 Relate to materials expense and staff costs.
Deutsche Post AG issued letters of commitment in the amount of
€7 million (previous year: €8 million) for these companies. Of this
amount, €2 million (previous year: €3 million) was attributable
to investments accounted for using the equity method, €1 mil-
lion (previous year: €1 million) to joint operations and €4 million
(previous year: €4 million) to unconsolidated companies.
To / from investments accounted
for using the equity method
To / from unconsolidated
companies
2018
2019
2018
2019
5
0
5
9
1
2
1
14
0
16
1
14
12
0
7
27
0
31
0
7
14
5
1
0
2
5
3
9
46.2 Related party disclosures (individuals)
In accordance with IAS 24, the Group also reports on transac-
tions between the Group and related parties or members of their
families. Related parties are defined as the Board of Manage-
ment, the Supervisory Board and the members of their families.
There were no reportable transactions or legal transactions in-
volving these related parties in financial year 2019. In particular,
the company extended no loans to these related parties.
The remuneration of key management personnel of the
Group requiring disclosure under IAS 24 comprises the remu-
neration of the active members of the Board of Management and
the Supervisory Board.
The active members of the Board of Management and the
Supervisory Board were remunerated as follows:
€ m
Short-term employee benefits
(excluding share-based payment)
Post-employment benefits
Termination benefits
Share-based payment 1
Total
2018
2019
14
3
4
–34
–13
16
2
0
12
30
1 Gain on the reversal of the SAR provision in financial year 2018, owing to the share
price performance at that time.
As well as the aforementioned benefits for their work on the
Supervisory Board, the employee representatives 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
appropriate 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 €38 million at the reporting date (previous year: €41 million).
155
Deutsche Post DHL Group – 2019 Annual Report
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FINANCIAL STATEMENTS
NOTES
FURTHER INFORMATION
The share-based payment amount relates to the relevant
expense recognised for financial years 2018 and 2019; further
details can be found in
notes 45.2 and 46.3. The expense is item-
ised in the following table:
of Management members received a total of 2,322,978 SAR s
(previous year: 1,191,840 SAR s), which at the issue date were
valued at €9.9 million (previous year: €5.4 million).
Share-based payment
Thousands of €
Dr Frank Appel, Chairman
Ken Allen
Oscar de Bok (since 1 October 2019)
Dr h. c. Jürgen Gerdes (until 12 June 2018)
John Gilbert (until 30 September 2019)
Melanie Kreis
Dr Tobias Meyer (since 1 April 2019)
Dr Thomas Ogilvie
John Pearson (since 1 January 2019)
Tim Scharwath
Share-based payment 1
2018
SAR s
–18,183
– 5,769
–
– 6,161
–2,916
–1,271
–
–39
–
–39
2019
SAR s
5,026
3,519
–
–
1,595
1,518
60
276
60
292
–34,378
12,346
1 Gain on the reversal of the SAR provision in financial year 2018, owing to the share
price performance at that time.
46.3 Remuneration disclosures in accordance with the HGB
BOARD OF MANAGEMENT REMUNERATION
The remuneration paid to members of the Board of Manage-
ment in financial year 2019 totalled €13.6 million (previous
year: €11.4 million). Non-performance-related components
(fixed and fringe benefits) accounted for €8.2 million (previous
year: €8.1 million) and €5.5 million (previous year: €3.3 million)
was attributable to the annual bonus paid as a performance-
related component. An additional €2.9 million (previous year:
€0.6 million) of the annual bonus was transferred to the medi-
um-term component (deferral). In financial year 2019, the Board
FORMER MEMBERS OF THE BOARD OF MANAGEMENT
Benefits paid to former members of the Board of Management or
their surviving dependants amounted to €6.3 million (previous
year: €9.6 million). The defined benefit obligation (DBO) for cur-
rent pensions calculated under IFRS s was €100 million (previous
year: €94 million).
REMUNERATION OF THE SUPERVISORY BOARD
The total remuneration of the Supervisory Board in financial
year 2019 amounted to €2.6 million (previous year: €2.7 million);
€2.4 million of this amount was attributable to a fixed compo-
nent, as in the prior year, and €0.2 million to attendance allow-
ances (previous year: €0.3 million).
Further information on the itemised remuneration of the
Board of Management and the Supervisory Board can be found
in the remuneration report, which forms part of the Group Man-
agement Report.
SHAREHOLDINGS OF THE BOARD OF MANAGEMENT AND
SUPERVISORY BOARD
As at 31 December 2019, 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 Article 19 of the Market
Abuse Regulation can be viewed on the company’s website at
dpdhl.com / en / investors.
47 Auditor’s fees
The fee for the auditor of the consolidated financial state-
ments, PricewaterhouseCoopers GmbH Wirtschaftsprüfungs-
gesellschaft, amounted to €10 million in financial year 2019 and
was recognised as an expense.
Auditor’s fee
€ m
Audit services
Other assurance services 1
Tax advisory services
Other services 1
Total
1 Rounded below €1 million.
2019
10
0
0
0
10
The audit services category includes the fees for auditing the
consolidated financial statements and for auditing the annual
financial statements prepared by Deutsche Post AG and its Ger-
man subsidiaries. The fees for reviewing the interim reports, ac-
companying auditors in connection with the implementation of
new accounting requirements and the fees for voluntary audits
beyond the statutory audit engagement, such as audits of the
internal control system, are also reported in this category.
Other assurance services related in particular to voluntary
audits of financial information and certificates for the internal
control system. Other services mainly comprised services re-
lating to further development of the internal control systems
outside the financial organisation.
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NOTES
FURTHER INFORMATION
48 Exemptions under the HGB and
local foreign legislation
For financial year 2019, the following German subsidiaries have
exercised the simplification options under section 264(3) of the
HGB or section 264b of the HGB and, if applicable, section 291
of the HGB:
• Agheera GmbH
• Albert Scheid GmbH
• CSG GmbH
• CSG.PB GmbH
• CSG.TS GmbH
• Danzas Deutschland Holding GmbH
• Deutsche Post Adress Beteiligungsgesellschaft mbH
• Deutsche Post Assekuranz Vermittlungs GmbH
• Deutsche Post Beteiligungen Holding GmbH
• Deutsche Post Customer Service Center GmbH
• Deutsche Post DHL Beteiligungen GmbH
• Deutsche Post DHL Corporate Real Estate
Management GmbH
• Deutsche Post DHL Corporate Real Estate
Management GmbH & Co. Logistikzentren KG
• Deutsche Post DHL Express Holding GmbH
• Deutsche Post DHL Research and Innovation GmbH
• Deutsche Post Dialog Solutions GmbH
• Deutsche Post Direkt GmbH
• Deutsche Post IT Services (Berlin) GmbH
(formerly: 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 Services GmbH
• Deutsche Post Mobility GmbH
• Deutsche Post Shop Essen GmbH
• Deutsche Post Shop Hannover GmbH
• Deutsche Post Shop München GmbH
• DHL Airways GmbH
• DHL Automotive GmbH
• DHL Automotive Offenau GmbH
• DHL Consulting GmbH
• DHL Delivery GmbH
• DHL Express Customer Service GmbH
• DHL Express Germany GmbH
• DHL Express Network Management GmbH
• DHL Fashion Retail Operations GmbH
• DHL FoodLogistics 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 Inventory Finance Services GmbH
• DHL Paket GmbH
• DHL Paketzentrum Obertshausen GmbH
• DHL Solutions Fashion GmbH
• DHL Solutions GmbH
• DHL Sorting Center GmbH
• DHL Supply Chain (Leipzig) GmbH
• DHL Supply Chain Management GmbH
• DHL Supply Chain VAS GmbH
• DHL Trade Fairs & Events GmbH
• Erste End of Runway Development Leipzig GmbH
• Erste Logistik Entwicklungsgesellschaft MG GmbH
• European Air Transport Leipzig GmbH
• Gerlach Zolldienste GmbH
• interServ Gesellschaft für Personal- und
Beraterdienstleistungen mbH
• it4logistics GmbH
• Saloodo! GmbH
• StreetScooter GmbH
• yunexus GmbH
The following companies in the UK make use of the audit exemp-
tion under section 479A of the UK Companies Act:
• DHL Exel Supply Chain Limited
• Exel Freight Management (UK) Limited
• Exel Investments Limited
• Exel Overseas Limited
• Freight Indemnity and Guarantee Company Limited
• Ocean Group Investments Limited
• Ocean Overseas Holdings Limited
• Power Europe Development Limited
• Power Europe Operating Limited
49 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 Conform-
ity with the German Corporate Governance Code for financial
year 2019 required by section 161 of the AktG. This Declara-
dcgk.de and at
tion of Conformity can be accessed online at
dpdhl . com / en / investors.
50 Significant events after the reporting date and
other disclosures
After the Chinese government introduced measures to contain
the coronavirus outbreak in early 2020, trade volumes in subse-
quent weeks weakened, not only on the inbound and outbound
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RESPONSIBILITY STATEMENT
INDEPENDENT AUDITOR’S REPORT
FURTHER INFORMATION
China trade lanes but also in other countries of Asia; constraints
on industrial production are also expected outside of China. The
Group currently sees more significant effects for the Global
Forwarding business unit and the Express division, where the
business is particularly affected with regards to cross-border
trade flows into and out of China. The other business units have
been affected only marginally to date. The impact on the Group’s
full-year results cannot be estimated with any precision at this
time. In case of a longer duration or a worsening of the current
situation over the next months, the negative effects for the Group
are likely to outweigh the positives.
On 28 February 2020 the Group decided to concentrate
on operating the existing StreetScooter fleet. The realignment
of StreetScooter is expected to result in a one-off expense of
€300 million to €400 million outside of the company’s core
business for the current financial year. In addition to the result
from current StreetScooter operations, this will largely comprise
depreciation and impairment losses on current and non-current
assets and restructuring costs.
There were no other significant events after the report-
ing date.
RESPONSIBILITY
STATEMENT
To the best of our knowledge, and in accordance with the appli-
cable reporting principles, the consolidated financial statements
give a true and fair view of the assets, liabilities, financial posi-
tion and profit or loss of the Group, and the management report
of the Group, which is combined with the management report
of Deutsche Post AG, 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.
INDEPENDENT
AUDITOR’S REPORT
Bonn, 14 February 2020
To Deutsche Post AG, Bonn
Addition of disclosures related to material subsequent events
to the notes to the consolidated financial statements and the
group management report: these subsequent events concern
the impact of the coronavirus on the earnings forecast for 2020
and the decision to restructure StreetScooter into an operator of
the existing fleet of vehicles.
Bonn, 9 March 2020
Deutsche Post AG
The Board of Management
Dr Frank Appel
Ken Allen
Oscar de Bok
Melanie Kreis
Report on the Audit of the Consolidated
Financial Statements and of the Group
Management Report
Audit Opinions
We have audited the consolidated financial statements of
Deutsche Post AG, Bonn, and its subsidiaries (the Group), which
comprise the consolidated statement of financial position as
at December 31, 2019, the consolidated statement of com-
prehensive income, consolidated statement of profit or loss,
consolidated statement of changes in equity, and consolidated
statement of cash flows for the financial year from January 1
to December 31, 2019, and notes to the consolidated financial
statements, including a summary of significant accounting
policies. In addition, we have audited the group management
report of Deutsche Post AG, which is combined with the Compa-
ny’s management report, for the financial year from January 1
to December 31, 2019. In accordance with the German legal
requirements, we have not audited the content of those parts of
the group management report listed in the “Other Information”
section of our auditor’s report.
Dr Tobias Meyer
Dr Thomas Ogilvie
In our opinion, on the basis of the knowledge obtained in
John Pearson
Tim Scharwath
the audit,
• the accompanying consolidated financial statements com-
ply, in all material respects, with the IFRS s as adopted by the
EU, and the additional requirements of German commer-
cial law pursuant to § [Article] 315e Abs. [paragraph] 1 HGB
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FURTHER INFORMATION
[Handelsgesetzbuch: German Commercial Code] and, in com-
pliance with these requirements, give a true and fair view of
the assets, liabilities, and financial position of the Group as at
December 31, 2019, and of its financial performance for the
financial year from January 1 to December 31, 2019, and
• the accompanying group management report as a whole pro-
vides an appropriate view of the Group’s position. In all material
respects, this group management report is consistent with the
consolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities and
risks of future development. Our audit opinion on the group
management report does not cover the content of those parts
of the group management report listed in the “Other Informa-
tion” section of our auditor’s report.
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that
our audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of the
group management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial state-
ments and of the group management report in accordance with
§ 317 HGB and the EU Audit Regulation (No. 537 / 2014, referred
to subsequently as “EU Audit Regulation”) in compliance with
German Generally Accepted Standards for Financial Statement
Audits promulgated by the Institut der Wirtschaftsprüfer [Insti-
tute of Public Auditors in Germany] (IDW). We performed the
audit of the consolidated financial statements in supplementary
compliance with the International Standards on Auditing (ISAs).
Our responsibilities under those requirements, principles and
standards are further described in the “Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements and of
the Group Management Report” section of our auditor’s report.
We are independent of the group entities in accordance with
the requirements of European law and German commercial
and professional law, and we have fulfilled our other German
professional responsibilities in accordance with these require-
ments. In addition, in accordance with Article 10 (2) point (f) of
the EU Audit Regulation, we declare that we have not provided
non-audit services prohibited under Article 5 (1) of the EU Audit
Regulation. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opin-
ions on the consolidated financial statements and on the group
management report.
Key Audit Matters in the Audit of the Consolidated
Financial Statements
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consoli-
dated financial statements for the financial year from January 1
to December 31, 2019. These matters were addressed in the
context of our audit of the consolidated financial statements as
a whole, and in forming our audit opinion thereon; we do not
provide a separate audit opinion on these matters.
In our view, the matters of most significance in our audit were
as follows:
1 Recoverability of goodwill
2 Pension obligations and plan assets
Our presentation of these key audit matters has been structured
in each case as follows:
1 Matter and issue
2 Audit approach and findings
3 Reference to further information
Hereinafter we present the key audit matters:
1 Recoverability of goodwill
1
In the consolidated financial statements of Deutsche Post AG,
goodwill amounting to EUR 11.3 billion is reported under
the balance sheet item “Intangible assets”, representing
approximately 22 % of total assets and 81 % of the Group’s
reported equity. Goodwill is tested for impairment by the
Company on an annual basis as of the balance sheet date
or if there are indications that goodwill may be impaired.
The impairment test of goodwill is based on the recoverable
amount, which is determined by applying a measurement
model using the discounted cash flow method. This matter
was of particular significance in our audit, because the re-
sult of this measurement depends to a large extent on the
estimation of future cash inflows by the Company’s exec-
utive directors and the discount rate used, and is therefore
subject to considerable uncertainty.
2 We satisfied ourselves as to the appropriateness of the
future cash inflows used in the calculation by, inter alia,
comparing this data with the current budgets in the three-
year plan prepared by the executive directors and approved
by the Company’s supervisory board, and reconciling it
against general and sector-specific market expectations.
With the knowledge that even relatively small changes
in the discount rate can have a material impact on the re-
coverable amount calculated using this method, we also
focused our testing on the parameters used to determine
the discount rate applied, including the weighted average
cost of capital, and evaluated the Company’s calculation
procedure. Due to the materiality of goodwill and the fact
that its measurement also depends on economic conditions
which are outside of the Company’s sphere of influence, we
carried out our own additional sensitivity analyses for those
cash-generating units with low headroom (recoverable
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amount compared with the carrying amount) and found
that the respective goodwill is sufficiently covered by the
discounted future cash inflows. Overall, the measurement
parameters and assumptions used by the executive direc-
tors are reproduceable.
The Company’s disclosures regarding goodwill are con-
tained in note 21 of the notes to the consolidated financial
statements.
3
2 Pension obligations and plan assets
1
In the consolidated financial statements of Deutsche Post AG
a total of EUR 5.1 billion is reported under the balance sheet
item “Provisions for pensions and similar obligations”. The
net pension provisions of EUR 4.9 billion (after consideration
of reported plan assets of EUR 0.2 billion) were calculated
on the basis of the present value of the obligations amount-
ing to EUR 18.6 billion, netted against the plan assets of
EUR 13.7 billion, which were measured at fair value. The ob-
ligations from defined benefit pension plans were measured
using the projected unit credit method in accordance with
IAS 19. This requires in particular that assumptions be made
as to the long-term salary and pension trend as well as aver-
age life expectancy. Furthermore, the discount rate must be
determined as of the balance sheet date by reference to the
yield on high-quality corporate bonds with matching curren-
cies and consistent terms. Changes to these measurement
assumptions are recognized directly in equity as actuarial
gains or losses. Changes in the financial measurement pa-
rameters resulted in actuarial losses of EUR 2.1 billion. In our
view, these matters were of particular significance, as the
measurement of the pension obligations and plan assets is
to a large extent based on the estimates and assumptions
made by the Company’s executive directors.
2 With the knowledge that estimated values bear an increased
risk of accounting misstatements and that the executive
directors’ measurement decisions have a direct and sig-
nificant effect on the consolidated financial statements,
we assessed the appropriateness of the values adopted,
in particular the measurement parameters used in the cal-
culation of the pension provisions, inter alia on the basis
of actuarial reports made available to us and taking into
account the expert knowledge of our internal specialists
for pension valuations. Our evaluation of the fair values of
plan assets was in particular based on bank confirmations
submitted to us, as well as other statements of assets and
real estate appraisals. On the basis of our audit procedures,
we were able to satisfy ourselves that the estimates and as-
sumptions made by the executive directors were sufficiently
documented and supported to justify the recognition and
measurement of the material pension provisions.
The Company’s disclosures relating to provisions for pen-
sions and similar obligations are contained in note 36 of
the notes to the consolidated financial statements.
3
Other Information
The executive directors are responsible for the other informa-
tion. The other information comprises the following non-audited
parts of the group management report:
• the statement on corporate governance pursuant to § 289 f
HGB and § 315 d HGB included in the “Declaration on Corpo-
rate Governance and Non-financial Group Report” section of
the group management report
• the separate non-financial report pursuant to § 289 b Abs. 3 HGB
and § 315 b Abs. 3 HGB
The other information comprises further the remaining parts
of the annual report – excluding cross-references to external
information – with the exception of the audited consolidated fi-
nancial statements, the audited group management report and
our auditor’s report.
Our audit opinions on the consolidated financial state-
ments and on the group management report do not cover the
other information, and consequently we do not express an audit
opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read
the other information and, in so doing, to consider whether the
other information
• is materially inconsistent with the consolidated financial state-
ments, with the group management report or our knowledge
obtained in the audit, or
• otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Executive Directors and the
Supervisory Board for the Consolidated Financial
Statements and the Group Management Report
The executive directors are responsible for the preparation of
the consolidated financial statements that comply, in all mate-
rial respects, with IFRS s as adopted by the EU and the additional
requirements of German commercial law pursuant to § 315 e
Abs. 1 HGB and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view
of the assets, liabilities, financial position, and financial per-
formance of the Group. In addition the executive directors are
responsible for such internal control as they have determined
necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements, the ex-
ecutive directors are responsible for assessing the Group’s ability
to continue as a going concern. They also have the responsibility
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for disclosing, as applicable, matters related to going concern. In
addition, they are responsible for financial reporting based on
the going concern basis of accounting unless there is an inten-
tion to liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.
Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole,
provides an appropriate view of the Group’s position and is, in
all material respects, consistent with the consolidated financial
statements, complies with German legal requirements, and ap-
propriately presents the opportunities and risks of future devel-
opment. In addition, the executive directors are responsible for
such arrangements and measures (systems) as they have consid-
ered necessary to enable the preparation of a group management
report that is in accordance with the applicable German legal
requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
The supervisory board is responsible for overseeing the
Group’s financial reporting process for the preparation of the
consolidated financial statements and of the group management
report.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements and of the Group Management Report
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
whether the group management report as a whole provides an
appropriate view of the Group’s position and, in all material re-
spects, is consistent with the consolidated financial statements
and the knowledge obtained in the audit, complies with the
German legal requirements and appropriately presents the op-
portunities and risks of future development, as well as to issue an
auditor’s report that includes our audit opinions on the consoli-
dated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with
§ 317 HGB and the EU Audit Regulation and in compliance with
German Generally Accepted Standards for Financial Statement
Audits promulgated by the Institut der Wirtschaftsprüfer (IDW)
and supplementary compliance with the ISAs will always detect
a material misstatement. Misstatements can arise from fraud
or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consol-
idated financial statements and this group management report.
We exercise professional judgment and maintain profes-
sional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group manage-
ment report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evi-
dence that is sufficient and appropriate to provide a basis for our
audit opinions. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements
and measures (systems) relevant to the audit of the group
management report in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose
of expressing an audit opinion on the effectiveness of these
systems.
• Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates made
by the executive directors and related disclosures.
• Conclude on the appropriateness of the executive directors’ use
of the going concern basis of accounting and, based on the au-
dit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we con-
clude that a material uncertainty exists, we are required to draw
attention in the auditor’s report to the related disclosures in the
consolidated financial statements and in the group manage-
ment report or, if such disclosures are inadequate, to modify
our respective audit opinions. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to
cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
and whether the consolidated financial statements present the
underlying transactions and events in a manner that the con-
solidated financial statements give a true and fair view of the
assets, liabilities, financial position and financial performance
of the Group in compliance with IFRS s as adopted by the EU
and the additional requirements of German commercial law
pursuant to § 315 e Abs. 1 HGB.
• Obtain sufficient appropriate audit evidence regarding the fi-
nancial information of the entities or business activities within
the Group to express audit opinions on the consolidated finan-
cial statements and on the group management report. We are
responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit
opinions.
• Evaluate the consistency of the group management report
with the consolidated financial statements, its conformity with
German law, and the view of the Group’s position it provides.
• Perform audit procedures on the prospective information pre-
sented by the executive directors in the group management
report. On the basis of sufficient appropriate audit evidence
we evaluate, in particular, the significant assumptions used
by the executive directors as a basis for the prospective infor-
mation, and evaluate the proper derivation of the prospective
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information from these assumptions. We do not express a sep-
arate audit opinion on the prospective information and on the
assumptions used as a basis. There is a substantial unavoidable
risk that future events will differ materially from the prospec-
tive information.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficien-
cies in internal control that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with the relevant independ-
ence requirements, and communicate with them all relationships
and other matters that may reasonably be thought to bear on
our independence, and where applicable, the related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most sig-
nificance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter.
Other Legal and Regulatory
Requirements
German Public Auditor Responsible
for the Engagement
Further Information pursuant to Article 10 of the EU Audit
Regulation
We were elected as group auditor by the annual general meet-
ing on May 15, 2019. We were engaged by the supervisory
board on August 8, 2019. We have been the group auditor of
Deutsche Post AG, Bonn without interruption since the Company
first met the requirements as a public interest entity within the
meaning of § 319 a Abs. 1 Satz 1 HGB in the financial year 2000.
We declare that the audit opinions expressed in this audi-
tor’s report are consistent with the additional report to the audit
committee pursuant to Article 11 of the EU Audit Regulation
(long-form audit report).
The German Public Auditor responsible for the engagement is
Verena Heineke.
Düsseldorf, 14 February 2020 / limited to the amendments
stated in the “Reference to Supplementary Audit” section above:
9 March 2020.
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Dietmar Prümm
Wirtschaftsprüfer
(German Public Auditor)
Verena Heineke
Wirtschaftsprüferin
(German Public Auditor)
Reference to Supplementary Audit
We issue this auditor’s report on the amended consolidated finan-
cial statements and amended group management report on the
basis of our audit, duly completed as at 14 February 2020, and
our supplementary audit completed as at 9 March 2020 related
to the addition of disclosures related to material subsequent
events to the notes to the consolidated financial statements and
the group management report. These subsequent events concern
the impact of the coronavirus on the earnings forecast for 2020
and the decision to restructure StreetScooter into an operator of
the existing fleet of vehicles. We refer to the presentation of the
amendments by the executive directors in the amended notes
to the consolidated financial statements, note 50 “Significant
events after the reporting date and other disclosures”, as well
as the amended group management report, sections “report on
economic position”, “expected developments” and “opportunities
and risks”.
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FURTHER INFORMATION
163 – 167
164 MULTI-YEAR REVIEW
166 GLOSSARY
167 CONTACTS
167 FINANCIAL CALENDAR
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
MULTI-YEAR REVIEW
MULTI-YEAR REVIEW
Key figures, 2014 to 2019
€m
Revenue
Post & Parcel Germany
Express
Global Forwarding, Freight
Supply Chain
eCommerce Solutions
Total for the divisions
Corporate Functions (until 2017: Corporate Center / Other)
Consolidation
Total
Profit / loss from operating activities (EBIT)
Post & Parcel Germany
Express
Global Forwarding, Freight
Supply Chain
eCommerce Solutions
Total for the divisions
Corporate Functions (until 2017: Corporate Center / Other)
Consolidation
Total
Consolidated net profit for the period
Cash flow / capex / depreciation, amortisation and impairment losses
Net cash from operating activities
Net cash used in investing activities
Net cash used in financing activities
Free cash flow
Capex 1
Depreciation, amortisation and impairment losses
Assets and capital structure
Non-current assets
Current assets
Equity (excluding non-controlling interests)
Non-controlling interests
Non-current provisions and liabilities
Current provisions and liabilities
Total assets
2014
adjusted
2015
2016
adjusted
2017
adjusted
2018
adjusted
2019
15,686
12,491
14,924
14,737
–
57,838
1,345
–2,553
56,630
1,298
1,260
293
465
–
3,316
–352
1
2,965
2,177
3,040
–1,087
–2,348
1,345
1,876
1,381
22,902
14,077
9,376
204
13,804
13,595
36,979
16,131
13,661
14,890
15,791
–
60,473
1,269
–2,512
59,230
1,103
1,391
–181
449
–
2,762
–351
0
2,411
1,719
3,444
–1,462
–1,367
1,724
2,024
1,665
23,727
14,143
11,034
261
12,734
13,841
37,870
17,078
13,748
13,737
13,957
–
58,520
1,279
–2,465
57,334
1,446
1,544
287
572
–
3,849
–359
1
3,491
2,781
2,439
–1,643
–1,233
444
2,074
1,377
24,166
14,129
11,087
263
12,127
14,818
38,295
18,161
15,049
14,482
14,152
–
61,844
1,387
–2,787
60,444
1,503
1,736
297
555
–
4,091
–350
0
3,741
2,853
3,297
–2,091
–1,087
1,432
2,268
1,471
23,916
14,756
12,637
266
11,370
14,399
38,672
15,108
16,147
14,978
13,350
3,834
63,417
1,624
–3,491
61,550
683
1,957
442
520
–27
3,575
– 414
1
3,162
2,224
5,796
–2,777
–3,039
1,059
2,648
3,292
34,804
15,666
13,590
283
20,131
16,466
50,470
15,484
17,101
15,128
13,436
4,045
65,194
1,477
–3,330
63,341
1,230
2,039
521
912
– 51
4,651
– 521
–2
4,128
2,776
6,049
–2,140
– 4,112
867
3,617
3,684
37,117
15,052
14,117
275
20,904
16,873
52,169
164
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
MULTI-YEAR REVIEW
Employees / staff costs
Number of employees 2
Full-time equivalents 3
Average number of employees 2
Staff costs
Staff cost ratio 4
Key figures revenue / income / assets and capital structure
Return on sales 5
Return on equity (ROE) before taxes 6
Return on assets 7
Tax rate 8
Equity ratio 9
Net debt 10
Net gearing 11
Key stock data
Basic earnings per share 12
Diluted earnings per share 13
Cash flow per share 12, 14
Dividend distribution
Payout ratio 17
Dividend per share
Dividend yield
Price-to-earnings ratio 18
Price-to-cash flow ratio 19
Number of shares as at 31 December
Year-end closing price
High
Low
Market capitalisation as at 31 December
Average trading volume per day 20
Annual performance including dividends
Annual performance excluding dividends
Beta factor 21
2014
2015
2016
2017
2018
2019
At 31 Dec.
At 31 Dec.
€ m
%
%
%
%
%
%
€ m
%
€
€
€
€ m
%
€
%
millions
€
€
€
€ m
shares
%
%
488,824
443,784
484,025
18,189
32.1
5.2
26.3
8.2
15.5
25.9
1,499
13.5
1.71
1.64
2.51
1,030
49.7
0.85
3.1
15.8
10.8
1,211.2
27.05
28.43
22.30
32,758
4,019,689
5.1
2.1
0.94
497,745
450,508
492,865
19,640
33.2
4.1
19.7
6.4
16.4
29.8
1,093
8.8
1.27
1.22
2.84
1,027
66.7
0.85
3.3
20.4
9.1
1,212.8
25.96
31.08
23.15
31,483
4,351,223
– 0.9
– 4.0
0.95
508,036
459,262
498,459
19,592
34.2
6.1
27.7
9.2
11.2
29.6
2,261
16.6
2.19
2.10
2.03
1,270
48.1
1.05
3.4
14.3
15.4
1,240.9
31.24
31.35
19.73
38,760
3,497,213
23.6
20.3
0.97
519,544
472,208
513,338
20,072
33.2
6.2
27.5
9.7
14.3
33.4
1,938
13.1
2.24
2.15
2.72
1,409
51.9
1.15
2.9
17.7
14.6
1,228.7
39.75
40.99
30.60
48,841
2,613,290
30.6
27.2
0.99
547,459
499,018
534,370
20,825
33.8
5.1
19.3
7.1
14.0
27.5
12,303
47.0
1.69
1.66
4.71
1,419
68.4
1.15
4.8
14.1
5.1
1,236.5
23.91
40.96
23.72
29,411
3,770,866
–36.9
–39.8
0.97
546,924
499,250
544,282
21,610
34.1
6.5
24.6
8.0
20.1
27.6
13,367
48.2
2.13
2.09
4.90
1,546 15, 16
58.9
1.25 15
3.7
16.0
6.9
1,236.5
34.01
34.91
23.54
42,053
3,109,350
47.1
42.2
1.00
1 As of 2017: capex relating to assets acquired. 2 Headcount including trainees. 3 Excluding trainees. 4 Staff costs / revenue. 5 EBIT / revenue. 6 Profit before income taxes / average equity (including non-controlling interests). 7 EBIT / average total
assets. 8 Income taxes / profit before income taxes. 9 Equity (including non-controlling interests) / total assets. 10
weighted number of shares outstanding is used for the calculation. 13 The average weighted number of shares outstanding is adjusted for the number of all potentially dilutive shares. 14 Cash flow from operating activities. 15 Proposal. 16 Estimate.
17 Excluding one-off effects, 2015: 45.8 %, 2018: 55.4 %, 2019: 59.4%. 18 Year-end closing price / basic earnings per share. 19 Year-end closing price / cash flow per share. 20 Volumes traded via the Xetra trading venue. 21 Three-year beta; source: Bloomberg.
Combined Management Report, page 45. 11 Net debt / net debt and equity (including non-controlling interests). 12 The average
165
Deutsche Post DHL Group – 2019 Annual Report
EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
GLOSSARY
GLOSSARY
Dialogue marketing
Market-orientated activities that apply direct communications to selectively
reach target groups using a personal, individualised approach.
B2C
The exchange of goods, services and information between businesses and
consumers.
German federal network agency ( Bundesnetzagentur)
German national regulator for electricity, gas, telecommunications, post
and railway.
German 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. The
initiation of a legislative procedure for a new Postal Act is expected in the
course of 2020.
Packstation
Parcel machine where parcels and small packages can be deposited and
collected around the clock.
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.
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.
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.
Customer Solutions & Innovation (CSI)
DHL’s cross-divisional commercial and innovation unit.
Gateway
Collection point for goods intended for export and for further distribution
of goods upon import.
Hub
Collection point for transferring and connecting international shipments
from and to multiple countries.
Lead Logistics Partner (LLP)
A logistics service provider who assumes the organisation of all or key
logistics processes for the customer.
Medical Express
The transport of time-critical or temperature-crit ical medical shipments
such as blood and tissue samples to medical facilities, hospitals,
laboratories or research institutes, usually related to clinical trials of new
medications.
Multimodal transport
Combines a minimum of two different means of transport for a shipment,
such as air, sea, rail and ground.
Supply chain
A series of connected resources and processes from sourcing materials
to delivering goods to consumers.
Time Definite
Delivery of time-critical shipments by a pre- selected time.
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 and 8 feet wide (6 × 2.4 metres).
This Report contains forward-looking statements. Forward-looking statements are not historical facts. They also include statements concerning assumptions and expectations. These statements are based upon current plans, estimates
and projections, and the information available to Deutsche Post AG at the time this Report was completed. They should not be considered to be assurances of the future performance and results contained therein. Instead, they depend
on a number of factors and are subject to various risks and uncertainties (particularly those described in the “Opportunities and risks” section) and are based on assumptions that may prove to be inaccurate. It is possible that actual
performance and results may differ from the forward-looking statements made in this Report. Deutsche Post AG assumes no obligation beyond the statutory requirements to update the forward-looking statements made in this Report.
If Deutsche Post AG updates one or more forward-looking statements, no assumption can be made that the statement(s) in question or other forward-looking statements will be updated regularly.
166
Deutsche Post DHL Group – 2019 Annual Report EDITORIAL
MANAGEMENT REPORT
2019 FINANCIAL YEAR
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
CONTACTS
FINANCIAL CALENDAR
FINANCIAL CALENDAR
2020
Results of the first quarter of 2020
2020 Annual General Meeting
Dividend payment
Results of the first half of 2020
Results of the first nine months of 2020
2021
Results of financial year 2020
Results of the first quarter of 2021
2021 Annual General Meeting
Dividend payment
Results of the first half of 2021
Results of the first nine months of 2021
Further dates, updates as well as information on live webcasts:
dpdhl.com/en/investors
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
ONLINE VERSION
An online extract and a complete PDF file are available on the internet:
annualreport2019.dpdhl.com
ORDERING
External
E-mail: ir @ dpdhl.com
dpdhl.com/en/investors
PUBLICATION
Published on 10 March 2020.
Internal
GeT and DHL Webshop
Mat. no. 675-602-551
The English version of the 2019 Annual Report of Deutsche Post DHL Group 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. Deutsche Post
Corporate Language Services et al.
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12 May
13 May
18 May
5 August
10 November
9 March
5 May
6 May
11 May
5 August
4 November
167
Deutsche Post DHL Group – 2019 Annual Report