Annual Report 2012 pdf (5 MB) - Deutsche Post DHL

group management
EBIT after asset charge increases
Since 2008, Deutsche Post DHL has used EBIT after asset charge (EAC) as a key
performance indicator. EAC is calculated by subtracting a cost of capital component, or
asset charge, from EBIT.
By including the asset charge in our business decisions, we encourage all divisions
to use resources efficiently and to organise our operating business to increase value sustainably
whilst generating cash flow. In the reporting year, EAC served as a key performance
indicator in addition to EBIT and was also used as a basis on which to determine
management remuneration.
To calculate the asset charge, the net asset base is multiplied by the weighted average
cost of capital (WACC). The asset charge calculation is performed each month so that we
can also take fluctuations in the net asset base into account during the year.
All of our divisions use a standard calculation for the net asset base. The key components
of operating assets are intangible assets, including goodwill, property, plant and
equipment and net working capital. Provisions and operating liabilities are subtracted
from operating assets.
The Group’s WACC is defined as the weighted average net cost of interest-bearing
liabilities and equity, taking into account company-specific risk factors in a beta factor
in accordance with the Capital Asset Pricing Model.
We apply a standard WACC of 8.5 % across the divisions and this also represents a
minimum target for projects and investments within the Group. The WACC is generally
adjusted to adhere to the current situation on the financial markets. However, the goal
is not to match every short-term change but to reflect long-term trends. The WACC is
reviewed once annually. The WACC used reflects company-specific risks and the net
cost of interest-bearing liabilities and equity in the current market environment. As in
previous years, we did not change the WACC in order to prevent our internal resource
allocation from being influenced by short-term, minor fluctuations in capital market
interest rates. A constant WACC also ensures that EAC is comparable with previous years.
In our reporting for the prior years, the net asset base was broken down into current
and non-current assets and liabilities. In the year under review, the individual components
of the net asset base were regrouped to increase transparency for the drivers of
asset charges in the context of internal and external reporting. The definition of the
net asset base, the methods for calculating the asset charge and EAC have not changed.
EAC improved from €1,229 million to €1,323 million in 2012, primarily due to the
DHL divisions’ rising profitability. The asset charge increased by 11.2 %, which was predominantly
attributable to our high capital expenditures throughout the divisions.
Deutsche Post DHL Annual Report 2012
A.07 EAC calculation
EBIT
asset charge
= net asset base
× Weighted average cost of capital
EBIT after asset charge (EAC)
A.08 Net asset base calculation
operating assets
• intangible assets including goodwill
• Property, plant and equipment
• trade receivables, other operating
assets
operating liabilities
• operating provisions
• trade payables, other operating
liabilities
Net asset base
Group Management Report
Business and Environment
Group management
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