DHL 1999 Annual Report Download - page 27

In 1998 just 2.1 percent of all sales were generated out-
side of Germany. By 1999, external sales accounted for
21.6 percent of all Group sales. This growth was also
strongly influenced by our international acquisitions,
and most particularly by our acquisitions of Danzas
and ASG. Nearly 18 percent – or EUR 4.0 billion – of
our external sales were generated in other European
countries; nearly 2.4 percent – EUR 536 million – were
reported in North and South America. The remainder
came from other regions.
5.3 Profit from operating activities
During the 1999 business year, it was possible to
increase operating profit (EBIT) before amortization of
goodwill for the Group by 21.4 percent to EUR 1,010.9
million.Deutsche Post AG reported a profit from operat-
ing activities of EUR 911.3 million.
For the Group, the decrease in the operating margin
from 5.7 percent to 4.5 percent was firstly the result of a
reconsolidation of our logistics activities and was due
secondly to peculiarities of the banking business which,
being a commission business, generally reports smaller
selling profit margins.
The operating profit (EBIT) before amortization of
goodwill posted by the EXPRESS corporate division
was particularly gratifying, increasing from a loss of
EUR 6.6 million in 1998 to a profit of EUR 64.9 million
in 1999.We also improved our operating profit in the
MAIL corporate division by 6.9 percent to EUR 1,008.7
million.
After allowing for the financial results and income tax,
we were able to generate an annual net profit of EUR
1,117 million,compared to EUR 925 million in 1998.
All in all, the acquisitions effected during the 1999
business year have a substantial impact on our expend-
iture and earnings situation. However, increased
network capacity utilization and further cost-cutting
measures also contributed to improving our results.
5.4 Cash flow statement
Compared to the previous year,our cash flow from oper-
ating activities (before changes in net working capital)
increased from EUR 1,382 million to EUR 1,544 million.
Cash from operations improved from an outflow of
EUR 398 million in 1998 to an inflow of EUR 4,642 mil-
lion. A primary factor behind this increase was the
reduction of receivables vis-à-vis the Deutsche Post
Pensions-Service e.V.(DPPS).We prepaid our contribu-
tions for 1999 in 1998 and therefore provided for corre-
sponding receivables.However,the increase in the level of
our liabilities also had a positive effect on our cash flow.
It was therefore possible to finance the acquisitions
effected during the 1999 business year largely from the
inflow of funds from operating activities and from the
proceeds from the sale of non-essential noncurrent
assets,particularly real estate.
Some EUR 2.2 billion in cash and cash equivalents were
also acquired along with these companies, particularly
from Postbank.The total amount of cash and cash equiv-
alents within the Group rose from EUR 710 million in
1998 to EUR 1,877 million as of December 31,1999.
26