DHL 2002 Annual Report Download - page 30

On the international market for air freight,demand for volume fell in the first
half of the year under review. This led to overcapacities, which in turn resulted in
falling freight prices. Our strong position as the market leader for air freight meant
that we benefited directly from the recovery in transportation volumes in the second
half of the year, allowing us to make up the initial year-on-year shortfall.
The market for ocean freight developed more positively in the year under
review than in 2001: shifts in customer needs and lower prices compared with air
freight stimulated demand. We maintained our strong position in this market in 2002.
The market for European overland transport also suffered from weak demand
in the consumer goods sector – particularly in the key German market – and
increased pressure on margins.
Banking sector undergoes consolidation
The weak global economy has triggered a structural transformation in the international
banking sector that is marked by an increased focus on core business as well as alli-
ances, mergers and takeovers of competitors. New technology and growing investment
pressure are the driving forces behind this adjustment to the increasingly demanding
economic and regulatory conditions (e.g. ). For example, financial service
providers are implementing e-commerce and multi-channel approaches in order to
expand their product and service offerings and are increasing back office efficiency
with modern technology. Although these investments will potentially allow for signifi-
cant cost reduction, they also entail extensive restructuring.
Business Developments
State aid ruling reduces consolidated net profit
Since the business structure of Deutsche Postbank group (Postbank) differs substan-
tially from the business of the other companies in the Group, the following discussion
contains key figures for the Group as well as key figures based on the Postbank at
equity financial statements. Postbank is accounted for in these financial statements as
a financial investment carried at equity (see table on page 30).
In fiscal year 2002, Deutsche Post World Net increased its consolidated revenue
by 17.6% to €39,255 million (previous year: €33,379 million). Excluding the first-time
consolidation of DHL, revenue fell by 1.0% to €33,056 million. By contrast, in local
currency, revenue rose by 0.6% to €33,592 million. Changes in euro exchange rates
resulted in negative currency effects for the Group of €536 million. The decrease
in the Group’s adjusted revenue was due to slight drops in revenue in the MAIL
Corporate Division and in the Express Europe Business Division of the EXPRESS
Corporate Division. In addition to these factors, a decline in freight rates in the
LOGISTICS Corporate Division as well as the sustained low level of interest rates on
the money and capital markets in the FINANCIAL SERVICES Corporate Division
depressed revenue slightly. In the “Postbank at equity” scenario, adjusted revenue fell
by 1.0% to €26,144 million (previous year: €26,408 million).
Basel II
29
Management Report
Economic Environment/Business Developments
Basel II: The revised Basel Capital
Accord that seeks to make the cap-
ital adequacy requirements
for banks more risk-sensitive than
the original 1988 Accord. It will
also reflect recent developments
on the financial markets and in risk
management techniques.