Capital Markets Day 2012 DHL Express - Deutsche Post DHL
Capital Markets Day 2012 DHL Express - Deutsche Post DHL
Capital Markets Day 2012 DHL Express - Deutsche Post DHL
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
<strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> <strong>2012</strong><br />
<strong>DHL</strong> <strong>Express</strong><br />
Ken Allen<br />
London, 24 May <strong>2012</strong>
The management team – More than 125 years of <strong>DHL</strong> experience<br />
Charlie Dobbie,<br />
Aviation, Operations & IT<br />
<strong>DHL</strong> since 1986<br />
Jerry Hsu,<br />
Head of Asia<br />
<strong>DHL</strong> since 2001<br />
Stephen Fenwick,<br />
Head of Americas<br />
<strong>DHL</strong> since 1980<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Ken Allen,<br />
CEO<br />
<strong>DHL</strong> since 1985<br />
Alberto Nobis,<br />
CFO<br />
<strong>DHL</strong> since 2006<br />
John Pearson,<br />
Head of Europe,<br />
Marketing & Sales<br />
<strong>DHL</strong> since 1986<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
2<br />
2
The wilderness years (2002-2009)<br />
<strong>DHL</strong> <strong>Express</strong> division 10 year review (EBIT)<br />
–In €m –<br />
1.500<br />
1.000<br />
500<br />
0<br />
-500<br />
-1.000<br />
-79<br />
152<br />
117<br />
-23<br />
288<br />
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
-272<br />
-2.194<br />
-790<br />
497<br />
927<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
3
What we said at the last <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong><br />
Our margin aspiration remains at ~10% as a result of a<br />
successful execution of the 3-year plan<br />
Last <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong><br />
2010<br />
„Business<br />
Stabilization“<br />
�<br />
Source: <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong>, 23 November 2010<br />
2011<br />
„Investment for<br />
Growth“<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
<strong>2012</strong><br />
„Market Share<br />
Growth“<br />
2013-2015<br />
Provider of<br />
Choice<br />
Employer of<br />
Choice<br />
Investment of<br />
Choice<br />
• Continuous execution of “Focus” program on track<br />
– To achieve Group’s 3 bottom lines<br />
– To strive for ~10% profit margin<br />
• Defend and strengthen <strong>DHL</strong>‘s No. 1 Position in<br />
International Time Definite <strong>Express</strong> by<br />
– Increasing brand awareness<br />
– Rebuilding <strong>DHL</strong> <strong>Express</strong>‘ reputation in US, France,<br />
UK and Belgium<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
4
Business stabilization to date<br />
Shipment per day (TDI)<br />
462<br />
EBIT (in € m)<br />
490<br />
540<br />
2009 2010 2011<br />
-790<br />
CAGR 8.1%<br />
497<br />
+ 86.5%<br />
927<br />
2009 2010 2011<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Revenue (in € m)<br />
9.917<br />
CAGR 8.9%<br />
11.111<br />
11.766<br />
2009 2010 2011<br />
Reported margin vs. competition (EXPRESS segment)<br />
20.0%<br />
15.0%<br />
10.0%<br />
5.0%<br />
0.0%<br />
-5.0%<br />
-10.0%<br />
9.8%<br />
4.9%<br />
3.5%<br />
4.2%<br />
12.3%<br />
7.0%<br />
3.4%<br />
14.1% 13.9%<br />
7.3%<br />
6.0%<br />
2.1%<br />
7.4%<br />
4.4%<br />
1.3%<br />
12.8%<br />
7.8%<br />
2.9%<br />
2010 Q1 2010 Q2<br />
-1.1%<br />
2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 <strong>2012</strong> Q1<br />
-4.4%<br />
13.8% 13.5%<br />
8.3%<br />
6.5%<br />
2.6%<br />
7.4%<br />
4.4%<br />
1.8%<br />
15.4%<br />
7.9%<br />
5.2%<br />
-5.6%<br />
<strong>DHL</strong> Global TNT Global FedEx Global UPS Global bef. Pension<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
12.8%<br />
7.6%<br />
5.3%<br />
2.0%<br />
5
Strategy 2015 and <strong>DHL</strong> <strong>Express</strong> “FOCUS”<br />
Respect & Results<br />
Employer of Choice<br />
Motivated<br />
people<br />
“Ain’t No Mountain<br />
High Enough”<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Great Loyal<br />
service quality customers<br />
QCC<br />
Simplify customers lives<br />
Provider<br />
of Choice<br />
“Love Sweet Love” “Simplicity”<br />
Positive contribution<br />
Investment of Choice<br />
Target EBIT<br />
“Wanna be a<br />
Billionaire”<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
6
<strong>DHL</strong> EXPRESS – 2015 EBIT target and key levers<br />
€ 785m<br />
€ 288m<br />
€ 497m<br />
1)<br />
2)<br />
2010<br />
Business<br />
stabilization<br />
1) Underlying EBIT; 2) Reported EBIT<br />
€ 927m<br />
2011<br />
Invest for growth<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Key growth and margin levers<br />
1. Be strong in fastest growing regions<br />
2. Focus on TDI<br />
+13-15% CAGR<br />
3. Further improve customer satisfaction<br />
4. Continue investments in network<br />
and service<br />
5. Leverage cross BU opportunities<br />
6. Manage cost through operating leverage<br />
7. Increase brand awareness<br />
<strong>2012</strong><br />
Market share<br />
growth<br />
2013<br />
Margin<br />
acceleration<br />
2014<br />
Convergence<br />
2015<br />
Renewal<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
7
<strong>DHL</strong> EXPRESS – Time Definite International focus<br />
What?<br />
Who?<br />
Why?<br />
• Documents (e.g.<br />
contracts)<br />
• Parcels (e.g. spare parts,<br />
samples)<br />
• Full pallets and even nonconveyable<br />
• Business customers with<br />
B2B shipments<br />
• Growing B2C through<br />
international eCommerce<br />
• Time criticality<br />
• Guaranteed delivery<br />
• Full track and trace<br />
• Insured high value<br />
• Supported customs<br />
handling<br />
• “Exotic” destination<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
• Scheduled express network<br />
• Time definite products (e.g. pre 9, pre 12, next day<br />
delivery) supported by industry specific solutions<br />
(e.g. Medical <strong>Express</strong>, Collect and Return)<br />
• International door-to-door coverage<br />
• Customs expertise<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
8
The most international company in the world<br />
Presence in over 220 countries and territories, pioneering<br />
<strong>Express</strong> business in many locations<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
9
1. Strong presence in fastest growing regions<br />
External research underlines <strong>DHL</strong> EXPRESS’ TDI leadership<br />
across all regions outside the Americas<br />
Americas [€ 5,387m]<br />
UPS<br />
32%<br />
<strong>DHL</strong><br />
13%<br />
Others<br />
4%<br />
EEMEA [€ 544m]<br />
Others<br />
18%<br />
TNT<br />
17%<br />
UPS<br />
12%<br />
FedEx<br />
51%<br />
FedEx<br />
6%<br />
Europe [€ 5,788m]<br />
FedEx<br />
11%<br />
TNT<br />
16%<br />
<strong>DHL</strong><br />
47%<br />
Others<br />
12%<br />
Source: Market Intelligence 2011 (FY 2010 data, MRSC); Scope: BE, CH, DE, ES, FR, IT, NL, PL, SE, UK, IE; AE, RU, TR, ZA; AU, CN, HK, IN, JP, KR, SG, TW; US, CA, MX, BR<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Asia Pacific [€ 5,429m<br />
Others<br />
27%<br />
TNT<br />
6%<br />
UPS<br />
10%<br />
UPS<br />
23%<br />
<strong>DHL</strong><br />
38%<br />
FedEx<br />
21%<br />
<strong>DHL</strong><br />
36%<br />
<strong>DHL</strong><br />
EXPRESS‘<br />
global<br />
market share<br />
TDI of 30%<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
10
2. Focus on TDI<br />
<strong>Express</strong> strategy to focus on TDI is crucial to further drive EBIT<br />
and margin development<br />
Revenue contribution<br />
by product (FY 2011)<br />
Other;<br />
26%<br />
TDD;<br />
11%<br />
Positive TDI<br />
revenue share<br />
development<br />
1) ACS: Air Capacity Sales<br />
TDI;<br />
63%<br />
Other,<br />
42%<br />
TDI<br />
TDD<br />
Other<br />
(incl. DDI, DDD,<br />
ACS 1) Same <strong>Day</strong>)<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
> Above <strong>DHL</strong> <strong>Express</strong> average < At or below <strong>DHL</strong> <strong>Express</strong> average<br />
Product<br />
2009<br />
TDI;<br />
58%<br />
Margin<br />
><br />
><br />
<<br />
Aspiration<br />
Other,<br />
39%<br />
2010<br />
TDI;<br />
61%<br />
Comment<br />
• Complementary offer<br />
Focus Strategy<br />
• Core competence with dedicated<br />
scheduled network<br />
• Volume shift to TD platform<br />
• Opportunistic offer for additional<br />
cost recovery<br />
• Divest over time<br />
Other,<br />
37%<br />
2011<br />
TDI;<br />
63%<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
11
Foundation<br />
100%<br />
3. Further improve customer satisfaction<br />
… supported by Certified International Specialist (CIS) training program<br />
My Role Courier<br />
100% (Feb <strong>2012</strong>)<br />
Finance<br />
100%<br />
CS Telephone<br />
Service<br />
Excellence<br />
91%<br />
Welcome to<br />
My Country<br />
In progress<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Selling in CS<br />
In progress<br />
Managing<br />
Challenging<br />
Situations in CS<br />
In progress<br />
Connecting to<br />
Customers<br />
Through Email<br />
in CS<br />
In Progress<br />
Systems Training<br />
in CS<br />
In Progress<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
12
3. Further improve customer satisfaction<br />
… supported by Certified International Specialist (CIS) training program<br />
Transit Time Study 2011 Customer Interaction Study 2011 Service Awards 2011<br />
<strong>DHL</strong> is the most reliable<br />
<strong>Express</strong> provider worldwide<br />
(Best of Breed Provider)<br />
Overall Satisfaction<br />
Customer Loyalty Index<br />
Value for Money<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Global<br />
40 awards in 19 countries<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
13
4. Continue investment into network and service quality<br />
Continuous network enhancements improve our service quality<br />
and secure the competitive advantage<br />
Hong Kong<br />
(HKG)<br />
Building of<br />
Shanghai hub:<br />
US$175m<br />
Los Angeles<br />
(LAX)<br />
• One day transit time from<br />
AP to US<br />
• Latest pick-up cut-off from<br />
US West Coast to Europe<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Expansion of<br />
Cincinnati hub:<br />
US$47m<br />
Cincinnati<br />
(CVG)<br />
New round the world flight as of March <strong>2012</strong><br />
Leipzig<br />
(LEJ)<br />
Bahrain<br />
(BAH)<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page 14
4. Leverage cross business unit opportunities<br />
Leverage of one <strong>DHL</strong> helps to manage risks and recover high<br />
investments for network expansion<br />
• Competitive transit times, round-the-world, non-stop and next-day services<br />
• Eco-friendly services through modern, efficient and well utilized aircraft<br />
HKG-CVG-BAH-HKG HKG-DEL-LEJ-BAH-DEL-HKG PVG-NRT-LAX-NRT-ICN-PVG SIN-BLR-LEJ (BLR stop added to the network not a new route)<br />
HKG-LAX-LEJ-HKG (Implementation April <strong>2012</strong>)<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
15
5. Leverage cross business unit opportunities<br />
Leverage of one <strong>DHL</strong> helps to manage risks and recover high<br />
investments for network expansion<br />
Intercon. capacity – utilization – DGF contribution<br />
CAGR +30%<br />
1.5<br />
Capacity million Tons<br />
1.0<br />
0.5<br />
0.0<br />
1) Including regional capacities<br />
WLF: 70%<br />
2009<br />
WLF: 79%<br />
2010<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
WLF: 75%<br />
2011<br />
Weight Load Factor<br />
(Core TDI & Non Core (ACS) Volumes)<br />
• DGF contributes<br />
continuously around 18% to<br />
our overall cargo loads 1)<br />
• DGF is our no. 1 ACS<br />
customer<br />
• For DGF we improved from<br />
no. 8 in 2010 to the no. 3<br />
supplier in Q1 <strong>2012</strong><br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
16
6. Manage cost through operating leverage<br />
Our overall network setup as well as concrete programs support the<br />
translation of volumes into additional EBIT<br />
Overhead cost<br />
Save >1%<br />
of revenue<br />
• Reduction of Sales, general and<br />
admin expenses as % of revenue<br />
– IT Convergence<br />
– E-Com Tools<br />
– Improved span of control<br />
PuD and handling<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Save 2.5%<br />
per move p.a.<br />
• NOEP (Network Optimization and<br />
Efficiency Program) to reduce<br />
ground handling cost<br />
• Re-fleeting with shelf vehicles<br />
optimize processes and reduce<br />
fuel and emissions<br />
• Fuel price volatility: Industry wide transparent fuel surcharge mechanism<br />
• FX rate exposure: Global currency portfolio as natural hedge on currency volatility<br />
One virtual airline<br />
Stabilize<br />
• Capacity management to<br />
stabilize CpK (Cost per Kilo)<br />
• Reduction of commercial air<br />
capacity by improved forecasting<br />
• Flexible leasing arrangements<br />
• Modernization of fleet to reduce<br />
fuel and carbon emissions<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
17
7. Increase brand awareness<br />
Successful advertising will continue, supported by selected<br />
sponsorships<br />
TV<br />
Print<br />
OOH &<br />
Online<br />
@<br />
TV spot aired approx.<br />
83,000 times on more than<br />
280 TV stations<br />
Radio spot aired approx. 39,000<br />
times on over 210 radio stations<br />
1,300 Ads in approx.<br />
400 Magazines, Newspapers &<br />
Trade Press<br />
3.5 billion online banner<br />
impressions & more than<br />
5 million clicks<br />
Rolled out in 44 countries in<br />
25 languages worldwide<br />
<strong>DHL</strong> <strong>Express</strong> Presentation | <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London, 24 May <strong>2012</strong><br />
Results<br />
• <strong>DHL</strong> EXPRESS maintained highest<br />
global advertising awareness (69%)<br />
of all EXPRESS providers and<br />
improved the prior levels by 3%<br />
• Creative execution well received with<br />
79% likeability for the TV commercial<br />
and above benchmark image<br />
perception for all executions<br />
• Brand awareness is industry-leading<br />
at 92% globally with AP (95%) and<br />
EU (94%) exceeding the global score<br />
• The campaign has a strong positive<br />
influence in shaping the perception<br />
of the <strong>DHL</strong> EXPRESS image as<br />
TDI provider<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
18
International express is in our DNA<br />
PROFIT FROM THE CORE<br />
“A core business that meets a<br />
fundamental human need – and one at<br />
which you’ve become the best in the<br />
world – rarely becomes obsolete.”<br />
“A great company is more likely to die of<br />
indigestion from too much opportunity<br />
than starvation from too little.”<br />
<strong>2012</strong> <strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> | London | May <strong>2012</strong><br />
From comes growth.<br />
GOOD TO GREAT<br />
Best<br />
in the world<br />
Int.<br />
<strong>Express</strong><br />
Passion Economics<br />
By narrowing scope, one creates expansion.<br />
<strong>Deutsche</strong> <strong>Post</strong> <strong>DHL</strong> | Page<br />
19
<strong>Capital</strong> <strong>Markets</strong> <strong>Day</strong> <strong>2012</strong><br />
<strong>DHL</strong> <strong>Express</strong><br />
Ken Allen<br />
London, 24 May <strong>2012</strong>
Change language