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2015 Annual Report

Table of contents

  • Page 1
    2015 annual Report

  • Page 2
    ... SHAREHOLDERS 2-5 SELECTED KEY FIGURES 20 A GROUP MANAGEMENT REPORT 21 - 98 23 44 70 72 83 83 94 General Information Report on Economic Position Deutsche Post Shares Non-Financial Figures Post-Balance-Sheet Date Events Opportunities and Risks Expected Developments B CORPORATE GOVERNANCE 99 - 126...

  • Page 3
    ...LOGISTICS The life sciences and healthcare industry increasingly requires transport solutions which guarantee product integrity. We support our customers through efficient, flexible and highly reliable transport solutions along the entire supply chain. By shaping innovative solutions DHL will become...

  • Page 4
    2 DR FRanK aPPEl Chief Executive Officer Deutsche Post DHL Group - 2015 Annual Report

  • Page 5
    ...processes, compliant networks and temperature-controlled supply chains are order of the day. On the following pages, we illustrate how we serve this sensitive sector's customers with efficient, transparent, reliable and high-quality transport solutions âˆ' in other words: with smart logistics. 2015...

  • Page 6
    ... revenue is reported as a result of revised contract terms with a customer in the Supply Chain division had a negative impact on revenue. At the same time, we have seen that our business model is fundamentally intact and our profitability remains high, not least given the sound operating performance...

  • Page 7
    ..., Freight and Supply Chain, now that the expenses incurred in connection with the transformation process will no longer arise. The Corporate Center / Other result is projected to remain at around â,¬-0.35 billion. At the Annual General Meeting in May, we shall propose a dividend of â,¬0.85 per share...

  • Page 8
    6 SERIALISATION CREATES SECURITY 7 - 10 VISIBILITY CREATES TRANSPARENCY 11 - 12 STANDARDS THAT ENSURE QUALITY 13 - 15 PRESENCE SUPPORTS POTENTIAL 16 - 17 EXPERTISE IN DEVELOPING NEW MARKETS 18 - 19 Deutsche Post DHL Group - 2015 Annual Report

  • Page 9
    ... medicines pose a risk - to the health of patients and also to the reputation and success of pharmaceutical companies. In response, regulators are increasingly turning to serialisation to help minimise these dangers and improve patient safety. Open here Deutsche Post DHL Group - 2015 Annual Report

  • Page 10
    ... makes meeting regulatory challenges even greater. Facilitates the monitoring of medicines that are new to the market. P a G K In C a Regulations and standards differ from country to country, making packaging standardisation a challenge. G S S Deutsche Post DHL Group - 2015 Annual Report U TI...

  • Page 11
    ... requires investment and collaboration with printing-technology vendors, designers of security inspection systems, IT vendors and more partners. a unique identifying serial number allows the movement of units to be tracked along the entire supply chain. Deutsche Post DHL Group - 2015 Annual Report

  • Page 12
    10 Deutsche Post DHL Group - 2015 Annual Report

  • Page 13
    11 VISIBILITY CREATES TRANSPARENCY DHL offers a raft of temperature-controlled, high visibility, monitored services. In 2015, DHL introduced the lifeTrack app, the first cold-chain tracking mobile app designed for the pharmaceutical industry.

  • Page 14
    ... high on pharmaceutical company agendas, which means it's also a priority for DHL. We offer global networks and IT systems specialised for the life sciences sector. Thanks to products such as Thermonet, Ocean Secure, LifeConEx and Medical Express, DHL offers customers the high quality and regulatory...

  • Page 15
    ... QUALITY The global demand for expensive, structurally complex and temperaturesensitive biologics and specialty drugs is growing. at the same time, there are more and more regulatory requirements. To meet the industry's changing demands a new generation of supply chains needs to be developed. DHL...

  • Page 16
    ..., compliant network Standard warehousing, storage and dispatch provide value-added services and process control from order to payment. Certified life Sciences Stations close to major airports operate to Good Distribution Practice standards, ensuring customers' temperature-sensitive products are...

  • Page 17
    ... managing costs on a purchase-price basis, to encompassing all direct and indirect costs. Indirect costs such as product losses or reputational risks are typically difficult to identify and merge. They can however have a significant financial impact. b c Deutsche Post DHL Group - 2015 Annual...

  • Page 18
    ...: IMS 2012 b. Brazil India 2016 2020 OTC stands for over the counter. These are medicines that can be sold without a prescription. Source: PwC Health Research Institute; Medical Cost Trend: Behind the numbers 2015, June 2014. Source: IMS 2013. Deutsche Post DHL Group - 2015 Annual Report

  • Page 19
    ... 56 countries: more than 160 sites and over 1.8 million square metres of floor space 15 Over countries on all continents (GMP stands for good manufacturing practice.) 15 Deutsche Post DHL Group - 2015 Annual Report years of a partnership approach to solving our customers' needs in the sector

  • Page 20
    18 Deutsche Post DHL Group - 2015 Annual Report

  • Page 21
    ... In June 2015, the German logistics activities of drug manufacturer STADA were transferred to DHL, more than an outsourcing project. The focus on core competencies will save costs and ensure customer flexibility - and has opened up new markets for DHL. Deutsche Post DHL Group - 2015 Annual Report

  • Page 22
    ... RENOWNED COMPANIES MERGING THEIR CORE COMPETENCIES." DR manFRED anDUlEIT, STaDa DR manFRED anDUlEIT Vice President Corporate Governance & Corporate Compliance, STADA WOlFRam HEInISCH Vice President of Strategy Planning & Business Intelligence, STADA Deutsche Post DHL Group - 2015 Annual Report

  • Page 23
    ..., manage to involve the employees at an early stage and was thus able to provide them with information and outline their long-term perspectives. Winning trust was not only important with respect to the 144 men and women who moved from STADA to DHL, but also with regard to STADA's management board...

  • Page 24
    18 The 350 square metres cold-storage facility has 400 pallet-storing positions. This is where the highly sensitive pharmaceutical products are stored at a constant temperature of between + 2 and + 8 degrees Celsius. Deutsche Post DHL Group - 2015 Annual Report

  • Page 25
    19 The pharmaceutical products are sorted into some 28,000 containers in the small-parts warehouse, where they are prepared for shipping. a total of 80 employees work two shifts a day in the warehouse in Florstadt. Deutsche Post DHL Group - 2015 Annual Report

  • Page 26
    ... growth whilst providing our Life Sciences & Healthcare expertise to other customers", explains Wim Eringfeld. "YOU GET TO A POINT WHERE YOU SIMPLY HAVE TO SAY IT'S TIME TO LET GO. WE PUT OUR TRUST IN DHL AND IT HAS PAID OFF." WOlFRam HEInISCH, STaDa Deutsche Post DHL Group - 2015 Annual Report

  • Page 27
    19 State-of-the-art facilities extend across an area equivalent to almost five football pitches. The conveyer belt alone is almost two kilometres in length. Some 27,000 deliveries leave the Florstadt warehouse on average each month. Deutsche Post DHL Group - 2015 Annual Report

  • Page 28
    18 The facility has an automatic small-parts warehouse, covering 1,600 square metres, which can hold up to 43,000 containers. Deutsche Post DHL Group - 2015 Annual Report

  • Page 29
    19 Deutsche Post DHL Group - 2015 Annual Report

  • Page 30
    ... net profit for the period Free cash flow Net debt 3 Return on equity before taxes Earnings per share 4 Dividend per share Number of employees 6 1 2 3 4 5 6 â,¬m â,¬m â,¬m % â,¬ â,¬ EBIT / revenue. After deduction of non-controlling interests. Group management Report, page 61. Calculation...

  • Page 31
    A GROUP MANAGEMENT REPORT 21 - 98 a GROUP manaGEmEnT REPORT

  • Page 32
    ...operations Financial position Net assets Business performance in the divisions DEUTSCHE POST SHARES NON-FINANCIAL FIGURES Employees Health and safety Corporate responsibility Procurement Customers and quality Brands POST-BALANCE-SHEET DATE EVENTS OPPORTUNITIES AND RISKS Overall Board of Management...

  • Page 33
    ... DHL is uniquely positioned in the world's growth markets, with a comprehensive range of international express, freight transportation, e-commerce and supply chain management services. Deutsche Post AG is a listed corporation domiciled in Bonn, Germany. The Group is organised into the four operating...

  • Page 34
    .... The most important locations can be found in the list of shareholdings. Table A.02 provides an overview of market volumes in key regions. Our market shares are detailed in the business units and market positions chapter. market volumes 1 Global (2014) Germany (2015) A.02 22 M TONNES Air freight...

  • Page 35
    Group Management Report - GEnERal InFORmaTIOn - Business model and organisation - Business units and market positions 25 Business units and market positions POST - ECOMMERCE - PARCEL DIVISION nationwide transport and delivery network in Germany, 2015 A.03 11,000 Paketshops 2,750 Packstations ...

  • Page 36
    ... written communications for international business customers. Customers outside Germany benefit from our expertise and experience in order to do business successfully in the German market. The global market volume for outbound international mail was around â,¬6.6 billion in 2015 (previous year...

  • Page 37
    ... a global network operator that applies standardised processes, we are consistently optimising our service to keep customer commitments, respond specifically to their wishes and always deliver the best possible quality. Time-definite international shipments as our core business Our main product is...

  • Page 38
    ...indicates that we have maintained our position as global market leader. Expanding our network in the Europe region UPS 25 % DHL 1 2 3 41 % Includes the TDI express product. Country base: AT, DE, DK, ES, FR, IT, NL, RU, TR, UK. Most recent market study. Our express business in the Europe region...

  • Page 39
    ... FedEx 1 2 3 46 % Includes the TDI express product. Country base: BR, CA, CL, CO, CR, GT, MX, PA, PE, US. Most recent market study. Source: Market Intelligence 2014, annual reports and desk research. The business in the MEA (Middle East and Africa) region witnessed positive development in 2015...

  • Page 40
    ...the ability to meet the increasing demand for efficient routing and multimodal transports. The leader in a sluggish air freight market DHL 1 2,276 Data based solely upon export freight tonnes. Source: annual reports, publications and company estimates. Ocean freight market, 2014: top 4 Thousand...

  • Page 41
    Group Management Report - GEnERal InFORmaTIOn - Business units and market positions 31 SUPPLY CHAIN DIVISION Customer-centric outsourcing solutions As the world's leading contract logistics provider, we create a competitive advantage for our customers in the supply chain business by delivering ...

  • Page 42
    ... demand for packaging services, temperature-assured transport, warehousing and direct-to-market solutions is driving growth in this sector. Automotive sector growth remains strong in North America and Europe, with continued leverage of Supply Chain's in-plant and aftermarket logistics. Production...

  • Page 43
    ... markets and goals. During the reporting year, we successfully initiated a number of strategic changes, including a wage agreement for Deutsche Post AG in Germany, restructuring in the Supply Chain division and the IT renewal in the Global Forwarding business unit. Connect: We are further increasing...

  • Page 44
    ... market conditions and shipment structures. We are also cutting costs wherever possible and sensible, whilst investing in innovation and growth areas. Our Parcel Production Concept has made our sorting and transport more efficient. Founding regional companies under the umbrella of DHL Delivery GmbH...

  • Page 45
    Group Management Report - GEnERal InFORmaTIOn - Objectives and strategies 35 managing revenue and costs: Our return on sales rises when growing volumes lead to economies of scale in the network, innovation and automation improve productivity and costs are strictly managed. We minimise indirect ...

  • Page 46
    ... Choice methodology and our best-practice solutions, we aim to improve our operational performance. The Connect pillar is about connecting our people and processes to achieve efficiency gains on a global scale. A lean management structure and the use of shared service centres will improve our cost...

  • Page 47
    ... or added to net financial income / net finance costs. To enable a comparison of divisions, the return on sales is calculated as the ratio of EBIT to revenue. EBIT after asset charge promotes efficient use of resources A.17 Net income from investments accounted for using the equity method Profit...

  • Page 48
    ... and dividends, in addition to operating payment commitments and investments. Cash flow is calculated using the cash flow statement. Operating cash flow (OCF) includes items that are related directly to operating value creation. OCF is calculated by adjusting EBIT for changes in non-current assets...

  • Page 49
    ... agreements between shareholders that would limit voting rights or the transfer of shares. Members of the Board of Management receive stock appreciation rights (SAR s) each year as a long-term remuneration component under the Long-Term Incentive Plan provided that they invest in each tranche of the...

  • Page 50
    ... issue and buy-back of shares The Board of Management is authorised, subject to the consent of the Supervisory Board, to issue up to 236,267,019 new, no-par value registered shares on or before 28 May 2018 in exchange for cash and / or non-cash contributions and thereby increase the company's share...

  • Page 51
    ... some other means in accordance with section 53a of the AktG. The shares purchased may be used for any legally permissible purpose. In addition to a sale via the stock exchange or by public offer to all shareholders, it is permitted in particular to use Deutsche Post DHL Group - 2015 Annual Report

  • Page 52
    ... the supply of fuel, based upon which fuel in the value of a high double-digit million amount was obtained in the reporting year and which, in the event of a change in control, grants the supplier the right to bring the business relationship to a close without notice. Deutsche Post DHL Group - 2015...

  • Page 53
    ...Management Report. Corporate Governance, page 115 ff. Research and development As a service provider, the Group does not engage in research and development activities in the narrower sense and therefore has no significant expenses to report in this connection. Deutsche Post DHL Group - 2015 Annual...

  • Page 54
    ...of the net profit as dividend. Employee Opinion Survey Increase approval rating of key performance indicator Active Leadership to 72 %. Greenhouse gas efficiency Introduce carbon efficiency index (CEX) in the company as a non-financial indicator relevant for internal management. 1 Results 2015 EBIT...

  • Page 55
    ...and international conflicts. After adjustment for purchasing power, global economic output grew by 3.1 % (previous year: 3.4 %). Growth in global trade was also relatively moderate, whereby the estimates vary (IMF: 2.6 %; OECD: 2.0 %). Global economy: growth indicators in 2015 % China Japan USA Euro...

  • Page 56
    46 The German labour market performed positively against the backdrop of the solid upswing, with the average annual number of employed workers increasing to 43.0 million (previous year: 42.7 million). massive drop in oil prices At the end of 2015, the price for one barrel of Brent Crude was at US$...

  • Page 57
    ... the losses. Information regarding the performance of the key indices and our shares in the reporting year is available in the section on Deutsche Post shares. Regional variations in growth of international trade Page 70 f. The global trade movements of relevance to us - air and ocean freight sent...

  • Page 58
    ... 54 9 11 Imports 101 asia Pacific Exports 101 95 86 88 106 30 332 247 24 Imports 49 MEA 1 Asia Pacific Europe North America Latin America Excluding trade between European Union countries. Source: Seabury Cargo Advisory, as at 22 January 2016. Deutsche Post DHL Group - 2015 Annual Report

  • Page 59
    ... at the end of the financial year. Results of operations Selected indicators for results of operations 2014 A.26 2015 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...

  • Page 60
    ..., other operating expenses were also significantly higher than in the previous year (â,¬4,074 million). The weak euro led to an increase in currency translation expenses; in addition, restructuring expenses were incurred in the Supply Chain division. Deutsche Post DHL Group - 2015 Annual Report

  • Page 61
    ... % of net profits as dividends as a general rule. At the Annual General Meeting on 18 May 2016, the Board of Management and the Supervisory Board will therefore propose a dividend of â,¬0.85 per share for financial year 2015 (previous year: â,¬0.85) to shareholders. The distribution ratio based upon...

  • Page 62
    ... in the Global Forwarding, Freight division and changes in net working capital. Operating provisions were largely stable compared with the previous year. The rise in other non-current assets and liabilities increased the net asset base slightly. net asset base (non-consolidated) â,¬m 31 Dec. 2014 31...

  • Page 63
    ... additionally includes a sustained dividend policy and clear priorities regarding the use of excess liquidity, which is to be used to gradually increase plan assets of our German pension plans as well as paying special dividends or buying back shares. Deutsche Post DHL Group - 2015 Annual Report

  • Page 64
    ..."Baa1" ratings, respectively. • 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 • Increase plan assets of German pension plans. • Pay out special dividends or execute share buy-back...

  • Page 65
    ... The Group covers its long-term financing requirements by means of equity and debt. This ensures our financial stability and also provides adequate flexibility. Our most important source of funds is net cash from operating activities. We also have a syndicated credit facility in a total volume of...

  • Page 66
    ...Strong global footprint in the Express, Global Forwarding, Freight and Supply Chain businesses. • Fairly stable credit metrics for the current rating and adequate financial flexibility. Rating factors • Structural mail volume decline in the Post eCommerce - Parcel division due to secular changes...

  • Page 67
    ... and machinery (â,¬114 million), IT equipment (â,¬109 million), operating and office equipment (â,¬87 million) as well as aircraft (â,¬54 million). Europe (excluding Germany) 574 300 Americas 267 223 Asia Pacific 223 191 Other regions 49 70 2015 2014 Deutsche Post DHL Group - 2015 Annual Report

  • Page 68
    ... all regions. A total of â,¬27 million was invested in the Freight business unit, mainly for real estate, equipment and machinery, and software. In the Supply Chain division, capital expenditure increased to â,¬318 million, from â,¬304 million in the previous year. Around 58 % of the funds were used...

  • Page 69
    ..., increasing current financial assets. This compares with a cash inflow of â,¬200 million in 2015 from the sale of money market funds. Calculation of free cash flow â,¬m 2014 2015 Q 4 2014 Q 4 2015 A.43 1,761 Global Forwarding, Freight 487 Supply Chain 611 A.44 net cash from operating activities...

  • Page 70
    ... indicators for net assets 31 Dec. 2014 A.45 31 Dec. 2015 Equity ratio Net debt Net interest cover Net gearing FFO to debt 1 1 % â,¬m % % Financial position, page 54. 25.9 1,499 20.7 13.5 27.7 29.8 1,093 83.1 8.8 29.1 Calculation Increase in consolidated total assets The Group's total assets...

  • Page 71
    ... 2015. net debt â,¬m 31 Dec. 2014 31 Dec. 2015 A.46 Non-current financial liabilities Current financial liabilities Financial liabilities Cash and cash equivalents Current financial assets Long-term deposits 1 Positive fair value of non-current financial derivatives 1 Financial assets net debt...

  • Page 72
    ... Key figures by operating division â,¬m 2014 adjusted 2015 +/- % Q 4 2014 adjusted Q 4 2015 A.47 +/- % Post - eCommerce - Parcel Revenue of which Post eCommerce - Parcel Profit from operating activities (EBIT) Return on sales (%) 1 Operating cash flow Express Revenue of which Europe Americas...

  • Page 73
    ... in Mail Communication volumes. The Germany-wide labour strikes called by the trade union ver.di, our collective bargaining partner, at mail centres and in letter and parcel delivery operations negatively impacted volume and revenue performance. Furthermore, 2014 included additional mail volumes as...

  • Page 74
    ... of 2014 by 14.6 % (previous year: â,¬425 million). Operating cash flow increased from â,¬1,085 million to â,¬1,337 million, which was attributable mainly to active working capital management. Working capital decreased from â,¬ -278 million to â,¬ -517 million. Deutsche Post DHL Group - 2015 Annual...

  • Page 75
    ..., product revenues were translated at uniform exchange rates. These revenues are also the basis for the weighted calculation of working days. Double-digit volume growth in Europe region Revenue in the Europe region increased by 6.6 % to â,¬6,045 million in the reporting year (previous year...

  • Page 76
    ... fourth quarter of 2015, EBIT dropped by 8.3 % to â,¬319 million and return on sales from 10.2 % to 8.8 %. As a result of the improved operating profit, operating cash flow in 2015 increased by 4.3 % to â,¬1,761 million (previous year: â,¬1,689 million). Deutsche Post DHL Group - 2015 Annual Report

  • Page 77
    ... share of revenue related to industrial project business and reported under Other was 27.3 % and therefore down year-on-year (previous year: 34.8 %). Gross profit thus declined by 11.8 % compared with the prior-year period. Global Forwarding: revenue â,¬m Air freight Ocean freight Other Total 2014...

  • Page 78
    ...the prior-year figure of â,¬71 million. Net working capital was reduced sharply in the reporting year, thanks to improved receivables management, which caused an equally sharp rise in operating cash flow to â,¬487 million (previous year: â,¬181 million). Deutsche Post DHL Group - 2015 Annual Report

  • Page 79
    Group Management Report - REPORT On ECOnOmIC POSITIOn - Business performance in the divisions 69 SUPPLY CHAIN DIVISION Continued revenue growth in all regions SUPPLY CHAIN: revenue by sector, 2015 Total revenue: â,¬ 15,791 million g h f e a Revenue in the division increased by 7.2 % to â,¬15,791 ...

  • Page 80
    ...2013 2014 A.59 2015 Year-end closing price High Low Number of shares Market capitalisation as at 31 December Average trading volume per day Annual performance including dividends Annual performance excluding dividends Beta factor 2 Earnings per share 3 Cash flow per share 4 Price-to-earnings ratio...

  • Page 81
    ... reporting year. Our team visited all the major financial centres, including London, New York and Frankfurt am Main, as well as the emerging trading platforms in Asia. c a b a b c d 1 Germany Other USA UK As at 31 December 2015. 44.0 % 29.2 % 13.5 % 13.3 % Deutsche Post DHL Group - 2015 Annual...

  • Page 82
    ... lay a solid foundation for productive and long-term working relationships. Employee Opinion Survey in line with strategic direction Objectives and strategies, page 33 In the reporting year, we further developed the questionnaire used for our annual Group-wide employee opinion survey. In doing so...

  • Page 83
    ... planning foresees another slight increase in the number of employees in financial year 2016. number of employees 2014 2015 Employees by region 1 e d a A.65 c A.66 b +/- % Full-time equivalents at year-end 1 of which Post - eCommerce - Parcel Express Global Forwarding, Freight Supply Chain...

  • Page 84
    .... A performance measurement system, regular reporting, a number of different divisional development programmes for female junior employees and women's networks, as well as options for improving work-family balance, will contribute to this at the company level. Deutsche Post DHL Group - 2015 Annual...

  • Page 85
    ... year, we conducted a materiality analysis in which we identified the issues most important to us as regards governance, staff and the environment, set corresponding targets and established key performance indicators. Objectives and strategies, page 33 Deutsche Post DHL Group - 2015 Annual Report

  • Page 86
    ...our market position. In the reporting year, we worked together with our customers to design more environmentally friendly supply chains and thereby achieve cost-effective reductions in carbon emissions. Greenhouse gas emissions fall slightly whilst carbon efficiency improves Group management, page...

  • Page 87
    Group Management Report - nOn-FInanCIal FIGURES - Corporate responsibility 77 CO2e emissions, 2015 Total: 27.95 million tonnes 1 A.70 11% 62% 24% Ground transport Air transport Ocean transport 3% Buildings 1 Scopes 1 to 3. Fuel and energy consumption in own fleet and buildings 2014 ...

  • Page 88
    ... savings. The demand for support in the procurement of transport services for Supply Chain and Global Forwarding customers increased considerably. In the reporting year, we expanded the established financing and payment model Supplier Finance, which is now used in 19 countries across all regions. Co...

  • Page 89
    ... the next day. Although the nationwide labour strikes at mail centres and in letter and parcel delivery operations compromised the mail transit time in the reporting year, we still remain well above the legal requirement of 80 %. In order to ensure this level of quality in the long term, our quality...

  • Page 90
    ... profitability and service quality. Using a direct interface to their own IT environment, customers can use our software to send letters for digital or physical delivery. Private customers can securely organise and store their data and documents and pay bills online. The average weekly opening time...

  • Page 91
    ... end, we are bolstering our customer service and investing heavily in systems to improve process management and communication between customers and DHL employees. Quality leader in the supply chain business We want to be the quality leader in contract logistics - the company that best understands...

  • Page 92
    ...Divisions Brands Post - eCommerce Parcel Express Global Forwarding, Freight Supply Chain marketing expenditures, 2015 Volume: around â,¬429 million d c A.75 Value of Group brands continues to rise b a a Product development and communication b Other c Public & customer relations d Corporate...

  • Page 93
    ...shares in the property development companies King's Cross Central Property Trust, UK, and King's Cross Central General Partner Ltd., UK, assigned to the Supply Chain division were sold at the end of January 2016. OPPORTUNITIES AND RISKS Overall Board of Management assessment of opportunity and risk...

  • Page 94
    ... assessment of a stable to positive outlook is moreover reflected in the Group's credit ratings. 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...

  • Page 95
    ... and change Aggregate Report 3 Overall strategy / risk management / compliance Determine 5 Control Review results Manage 4 Operating measures Plan Review measures Monitor early warning indicators Implement Divisions Opportunity and risk-controlling processes Board of Management Internal auditors...

  • Page 96
    ...and risk management, Corporate 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. The...

  • Page 97
    ... apply for 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 a regulated market. Many of the...

  • Page 98
    ... on 2 January 2014, â,¬20.2 million on 2 January 2015 and â,¬20.1 million on 4 January 2016. Those payments were reported in the balance sheet under non-current assets; the earnings position remained unaffected. The European Commission has not expressed its final acceptance of the calculation of the...

  • Page 99
    ... outsourcing business processes continues. As a result, supply chains are becoming more complex and more international, but are also more prone to disruption. Customers are therefore calling for stable, integrated logistics solutions, which is what we provide with our broad-based service portfolio...

  • Page 100
    ...global operator, we are inevitably exposed to financial opportunities and risks. These are mainly opportunities or risks arising from fluctuating exchange rates, interest rates and commodity prices and the Group's capital requirements. We attempt to reduce the volatility of our financial performance...

  • Page 101
    ... Group enjoys open access to the capital markets on account of its good ratings within the industry, and is well positioned to secure long-term capital requirements. The Group's net debt amounted to â,¬1.1 billion at the end of 2015. The share of financial liabilities with short-term interest rate...

  • Page 102
    92 In the Global Forwarding, Freight division we purchase transport services from airlines, shipping companies and freight carriers rather than providing them ourselves. In the best-case scenario, we succeed in sourcing transport services on a cost-effective basis. We thus have the opportunity of ...

  • Page 103
    ... increases in both chronic and acute diseases pose another risk to sustaining our business operations. We address this risk with a systematic health management programme and cross-divisional co-operation. Employees, page 74 Health and safety, page 75 Deutsche Post DHL Group - 2015 Annual Report

  • Page 104
    ..., the situation will remain problematic for countries dependent on crude oil exports in particular. In addition, there are a number of political and structural risks whose occurrence could ultimately impact the economies of the industrial countries. Deutsche Post DHL Group - 2015 Annual Report

  • Page 105
    ... markets Central and Eastern Europe CIS countries Emerging markets in Asia Middle East and North Africa Latin America and the Caribbean Sub-Saharan Africa Source: International Monetary Fund (IMF) World Economic Outlook, January 2016 update. Growth rates calculated on the basis of purchasing power...

  • Page 106
    ... will continue to face surplus capacities and low but stable demand on the most important trade lanes. Aided by low oil prices, the European road transport market is also likely to see moderate development in 2016 similar to that of the reporting year. Deutsche Post DHL Group - 2015 Annual Report

  • Page 107
    ...of net profits as dividends as a general rule. At the Annual General Meeting on 18 May 2016, we intend to propose to the shareholders that a dividend per share of â,¬0.85 be paid for financial year 2015 (previous year: â,¬0.85). Expected financial position no change in the Group's credit rating In...

  • Page 108
    ... Global Forwarding, Freight division. In the Supply Chain division, capital expenditure is to provide selective support to the planned expansion of our business. Cross-divisionally we shall focus upon investments in vehicles and IT. Development of further indicators relevant for internal management...

  • Page 109
    B CORPORATE GOVERNANCE 99 - 126 B CORPORaTE GOVERnanCE

  • Page 110
    ... CORPORATE GOVERNANCE REPORT OF THE SUPERVISORY BOARD SUPERVISORY BOARD Members of the Supervisory Board Committees of the Supervisory Board BOARD OF MANAGEMENT MANDATES Mandates held by the Board of Management Mandates held by the Supervisory Board CORPORATE GOVERNANCE REPORT Remuneration report

  • Page 111
    ... SUPERVISORy BOaRD 101 REPORT OF THE SUPERVISORY BOARD WUlF VOn SCHImmElmann Chairman DEAR SHAREHOLDERS, In financial year 2015, Deutsche Post DHL Group's "Strategy 2020: Focus. Connect. Grow." paved the way for the company's long-term success in order to further develop its position as a world...

  • Page 112
    ...Board in 2015, we approved the 2016 business plan after extensive discussions and set the Board of Management's performance targets for 2016. In addition, a share capital increase was resolved upon for the purpose of financing a share buy-back to settle share-based payments due to executives in 2016...

  • Page 113
    ...finance a share buy-back to settle share-based payments due to executives in 2016. The Committee recommended that the Supervisory Board approve the proposals. The Committee discussed the Group's performance and the internal control and risk management system at regular intervals during the year. The...

  • Page 114
    ...Supervisory Board reviewed the 2015 annual and consolidated financial statements and the management reports, including the appropriation of the net retained profit as proposed by the Board of Management, at the financial statements meeting held on 8 March 2016. All Supervisory Board members received...

  • Page 115
    ... Postal Services Group at ver.di national administration Jörg von Dosky Chair of the Group and Company Executive Representation Committee, Deutsche Post AG Thomas Koczelnik Chair of the Group Works Council, Deutsche Post AG anke Kufalt Chair of the Works Council, DHL Global Forwarding GmbH, Hamburg...

  • Page 116
    ... August 2017 mElanIE KREIS Human Resources Born in 1971 Member since October 2014 Appointed until October 2017 Left the company during the reporting year: Roger Crook Global Forwarding, Freight Born in 1957 Member from March 2011 until 27 April 2015 Deutsche Post DHL Group - 2015 Annual Report

  • Page 117
    Corporate Governance - BOaRD OF manaGEmEnT 107 JOHn GIlBERT Supply Chain Born in 1963 Member since March 2014 Appointed until March 2017 JÃœRGEn GERDES Post - eCommerce - Parcel Born in 1964 Member since July 2007 Appointed until June 2020 KEn allEn Express Born in 1955 Member since February ...

  • Page 118
    ... Board) "Marguerite 2020": European Fund for Energy, Climate Change and Infrastructure, Luxembourg (Supervisory Board) Elmar Toime Postea Inc., USA (Non-Executive Chairman) Blackbay Ltd., United Kingdom (Non-Executive Director) Qatar Postal Services Company, Qatar (Non-Executive Director) Employee...

  • Page 119
    ... CORPORaTE GOVERnanCE REPORT 109 CORPORATE GOVERNANCE REPORT annual Corporate Governance Statement pursuant to section 289 a of the Handelsgesetzbuch (HGB - German Commercial Code) This annual Corporate Governance Statement contains information about the main components of Deutsche Post DHL Group...

  • Page 120
    .... Within Deutsche Post DHL Group, the Chief Compliance Officer is responsible for the compliance management system and reports directly to the Chief Financial Officer. The Chief Compliance Officer is supported by the Global Compliance Office, which Deutsche Post DHL Group - 2015 Annual Report

  • Page 121
    ... of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the Board Member for Human Resources, the Board of management also includes four operating divisions: Post - eCommerce - Parcel, Express, Global Forwarding, Freight, and Supply Chain. Group management functions are...

  • Page 122
    ... contact with other Board of Management members between Supervisory Board meetings. The Supervisory Board carries out an annual efficiency review of the work of the Supervisory Board, which includes assessing co-operation with the Board of Management. The efficiency review for financial year 2015...

  • Page 123
    ... the accounting process, the effectiveness of the internal control system, the risk management and internal auditing systems, and the audit of the financial statements. It examines corporate compliance issues and discusses the half-yearly and quarterly financial reports with the Board of Management...

  • Page 124
    ... women (35 %) are members of the Supervisory Board. The Supervisory Board has set a target quota of 1:7 for the number of women on the Board of Management, which applies until the end of the Annual General Meeting in 2018, after which the target will increase to 2:8 (25 %) by the end of the AGM in...

  • Page 125
    ... company's business is also appropriately reflected in the extensive international experience of many Supervisory Board members. Remuneration report The remuneration report also forms part of the Group Management Report. Remuneration structure of the Group Board of management in financial year 2015...

  • Page 126
    ...eCommerce - Parcel, Express, Global Forwarding, Freight and Supply Chain divisions, the EAC of their respective division is also a key parameter. The Group's reported free cash flow is one of the targets applicable to all members of the Board of Management. Furthermore, an employee-related target is...

  • Page 127
    ...last 20 consecutive trading days prior to the issue date. The performance period is the last 60 trading days before the end of the waiting period. The average (closing) price is calculated as the average closing price of Deutsche Post shares in Deutsche Börse AG's Xetra trading system. A maximum of...

  • Page 128
    ...condition that the required EAC, an indicator of sustainability, be reached. The members of the Board of Management were granted a total of 1,936,470 SAR s in financial year 2015 with a total value of â,¬6.66 million (previous year: â,¬7.30 million) at the time of issue (1 September 2015). The total...

  • Page 129
    ...year 2015 or for the previous year. In addition, the long-term remuneration (LTIP with a four-year waiting period) granted in the reporting year or in the previous year is reported at the fair value at the time granted. With respect to pension commitments, the pension expense, i. e. the service cost...

  • Page 130
    ... the Board of management members who left the company in financial year 2015 â,¬ Roger Crook Global Forwarding, Freight (until 27 April 2015) 2014 2015 Min. 2015 B.07 Max. 2015 a) non-performance-related remuneration Base salary Fringe benefits Total (lit. a) b) Performance-related remuneration...

  • Page 131
    ... Gilbert Supply Chain (since 11 March 2014) 2014 2015 Melanie Kreis Human Resources (since 31 October 2014) 2014 2015 Lawrence Rosen Finance, Global Business Services 2014 2015 Payments Base salary Fringe benefits Total One-year variable remuneration Multi-year variable remuneration Medium-term...

  • Page 132
    ...rgen Gerdes have direct, final-salary-based pension commitments on the basis of their individual contracts, providing for benefits in case of permanent disability, death or retirement. If the contract of a member ends after at least five years of service on the Board of Management, the entitlements...

  • Page 133
    ... plan, the company credits an annual amount of 35 % of the annual base salary to a virtual pension account for the Board of Management member concerned. The maximum contribution period is 15 years. The pension capital accrues interest at an annual rate equal to the "iBoxx Corporates AA 10+ Annual...

  • Page 134
    ... 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. Deutsche Post DHL Group - 2015 Annual Report

  • Page 135
    ... per share for financial year 2015 exceeds the consolidated net profit per share for financial year 2012. Since this condition was not met, no performance-related remuneration with a long-term incentive effect will be paid out for financial year 2013. Deutsche Post DHL Group - 2015 Annual Report

  • Page 136
    ... net profit per share for financial year 2014 exceeds the consolidated net profit per share for financial year 2011. The total amount of the variable remuneration for 2012 was â,¬616,250. Of that amount, â,¬21,250 was attributable to one Supervisory Board member who left the company prior to 2014...

  • Page 137
    C O N S O LID A T E D FIN A N CIA L S TAT E M E N T S 127 - 204 C C COnSOlIDaTED FInanCIal STaTEmEnTS

  • Page 138
    ... 26 - Investment property 27 - Investments accounted for using the equity method 28 - Financial assets 29 - Other assets 30 - Deferred taxes 31 - Inventories 32 - Trade receivables 33 - Income tax assets and liabilities 34 - Cash and cash equivalents 35 - Assets held for sale and liabilities...

  • Page 139
    ... 2014 2015 C.01 Revenue Other operating income Total operating income Materials expense Staff costs Depreciation, amortisation and impairment losses Other operating expenses Total operating expenses Net income from investments accounted for using the equity method Profit from operating activities...

  • Page 140
    ...to profit or loss Change due to remeasurements of net pension provisions IFRS 3 revaluation reserve Other changes in retained earnings Income taxes relating to components of other comprehensive income Share of other comprehensive income of investments accounted for using the equity method (after tax...

  • Page 141
    ... - BalanCE SHEET 131 BALANCE SHEET C.03 â,¬m Note 31 Dec. 2014 31 Dec. 2015 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...

  • Page 142
    ...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...

  • Page 143
    ... of net pension provisions Other changes Balance at 31 December 2014 Balance at 1 January 2015 Capital transactions with owner Dividend Transactions with non-controlling interests Changes in non-controlling interests due to changes in consolidated group Issue of shares or other equity instruments...

  • Page 144
    ...number of joint operations German Foreign number of investments accounted for using the equity method German Foreign 90 685 139 658 1 1 1 1 1 14 1 15 At the beginning of 2015, Deutsche Post DHL Group founded 49 regional companies under the umbrella of DHL Delivery GmbH to secure the increased...

  • Page 145
    ... equity interest 1 Total cost Less net assets Difference Plus non-controlling interests 2 Goodwill 1 7 2 9 10 -1 3 2 SUPPLY CHAIN SEGMENT In December 2015, DHL Supply Chain Limited (DHL SC Ltd.), UK, sold its food procurement business. GLOBAL FORWARDING, FREIGHT SEGMENT The fine art transportation...

  • Page 146
    .... SUPPLY CHAIN SEGMENT In December 2014, DHL Supply Chain Limited, UK, sold its Digital Solutions Business by way of an asset deal. GLOBAL FORWARDING, FREIGHT SEGMENT In July 2014, activities not forming part of the core business of Hull Blyth (Angola) Ltd., Angola, including the related non-current...

  • Page 147
    ...The following are not relevant for the consolidated financial statements: amendments to IAS 27, Equity Method in Separate Financial Statements. 1 The effective date was amended for companies within the EU. This is a departure from the original standard. Deutsche Post DHL Group - 2015 Annual Report

  • Page 148
    ... lifetime expected loss model (simplified approach) will in future apply. Customer credit quality will directly impact the impairment process in the future. Any fluctuations will be directly reflected in net income. IFRS 9 will also more closely align hedge accounting with risk management objectives...

  • Page 149
    ...the year in which they are incurred. In addition to direct costs, the production cost of internally developed software includes an appropriate share of allocable production overhead costs. Any borrowing costs incurred for qualifying assets are included in the production cost. Value added tax arising...

  • Page 150
    140 Useful lives Years 1 Impairment Internally developed software Purchased software Licences Customer relationship 1 up to 10 up to 5 term of agreement up to 20 The useful lives indicated represent maximum amounts specified by the Group. The actual useful lives may be shorter due to ...

  • Page 151
    ... 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. Deutsche Post DHL Group - 2015 Annual Report

  • Page 152
    ... hedged item and the risk to be hedged, the Group uses fair value hedges and cash flow hedges. The carrying amounts of financial assets not carried at fair value through profit or loss are tested for impairment at each balance sheet date and whenever there are indications of impairment. The amount...

  • Page 153
    ...the supply of services, for administrative purposes, or for sale in the normal course of the company's business. It is measured 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...

  • Page 154
    ... underfunded according to information provided by the funds. There is no information from the plans that would indicate any change from the contribution rates set by current collective agreements. Deutsche Post DHL Group does not represent a significant level to any fund in terms of contributions...

  • Page 155
    .... Deferred taxes 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...

  • Page 156
    ... - 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. Deutsche Post DHL Group - 2015 Annual Report

  • Page 157
    ... losses from intra-group deliveries and services not realised by sale to third parties are eliminated. Unrealised gains and losses from business transactions with investments accounted for using the equity method are eliminated on a proportionate basis. Deutsche Post DHL Group - 2015 Annual Report

  • Page 158
    ... The employee numbers are expressed as average numbers of FTE s. Information about geographical regions â,¬m Germany 1 Jan. to 31 Dec. 2014 2015 Europe (excluding Germany) 2014 2015 2014 Americas 2015 2014 Asia Pacific 2015 Other regions 2014 2015 2014 Group 2015 External revenue Non-current assets...

  • Page 159
    ... rail, road, air and sea. The division's business units are Global Forwarding and Freight. SUPPLY CHAIN The Supply Chain division delivers customised logistics solutions to its customers based on globally standardised modular components including warehousing, transport and value-added services. In...

  • Page 160
    ... â,¬m 2014 2015 Total assets 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 Center / Other Total for reportable...

  • Page 161
    ... to the sale of shares in UK companies King's Cross Central Property Trust and King's Cross Central General Partner Ltd. The increase in income from currency translation is largely due to the change in the exchange rate for the euro. In the course of the exit from the US domestic Express business in...

  • Page 162
    ... the UK, the USA and the Netherlands - in the amount of â,¬317 million (previous year: â,¬276 million). The average number of Group employees in the year under review, broken down by employee group, was as follows: Employees (annual average) Headcount 2014 2015 Hourly workers and salaried employees...

  • Page 163
    ... â,¬m net income from investments accounted for using the equity method 0 1 3 4 2014 2015 5 2 0 120 0 3 1 335 Net income from associates Net income from joint ventures net income from investments accounted for using the equity method 5 0 5 2 0 2 Deutsche Post DHL Group - 2015 Annual Report

  • Page 164
    ... in the IFRS financial statements and in the opening tax accounts amounted to â,¬334 million as at 31 December 2015 (previous year: â,¬319 million). The effects from deferred tax assets of German Group companies not recognised for tax loss carryforwards and temporary differences relate primarily to...

  • Page 165
    ... the average 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 share-based payment systems (as at 31 December 2015: 5,423,718 shares; previous year...

  • Page 166
    ... purchased intangible assets. Internally generated intangible assets relate to development costs for internally developed software. Other than goodwill, only brand names that are acquired in their entirety are considered to have indefinite useful lives. Deutsche Post DHL Group - 2015 Annual Report

  • Page 167
    Consolidated Financial Statements - nOTES - Balance sheet disclosures 157 24.2 allocation of goodwill to CGU s â,¬m 2014 2015 Total goodwill Post - eCommerce - Parcel Express Global Forwarding, Freight DHL Global Forwarding DHL Freight Supply Chain DHL Supply Chain Williams Lea 11,109 906 3,918...

  • Page 168
    ... has paid advances in connection with uncompleted transactions. Assets under development relate to items of property, plant and equipment in progress at the balance sheet date for whose production internal or third-party costs have already been incurred. Deutsche Post DHL Group - 2015 Annual Report

  • Page 169
    ... year: â,¬65 million). 27 â,¬m 2014 Investments accounted for using the equity method Investments accounted for using the equity method changed as follows: Associates 2015 2014 Joint ventures 2015 2014 Total 2015 Balance at 1 January Disposals Impairment losses Changes in Group's share of equity...

  • Page 170
    ... associates â,¬m 2014 2015 The Group plans to sell Güll GmbH, Germany, and PresseService Güll GmbH, Switzerland, which are both accounted for using the equity method. The Group holds 51 % of the shares of each joint venture. The companies were reclassified as assets held for sale and liabilities...

  • Page 171
    ... tax receivables Pension assets, non-current only Receivables from private postal agencies Income from cost absorption Creditors with debit balances Receivables from insurance business Receivables from loss compensation (recourse claims) Receivables from employees Receivables from cash-on-delivery...

  • Page 172
    ...with assets held for sale The amounts reported in this item mainly relate to the following items: â,¬m 2014 Assets 2015 2014 Liabilities 2015 Exel Inc., USA - real estate (Supply Chain segment) nugg.ad GmbH, Germany - equity interest (PeP segment) Güll GmbH, Germany, and Presse-Service Güll GmbH...

  • Page 173
    ... sales planned by various companies are reported under Other. As part of early fleet renewal activities, the number of legacy aircraft is to be reduced. DHL Aviation (Netherlands) B. V., the Netherlands, European Air Transport Leipzig GmbH, Germany, and DHL International GmbH, Germany, report...

  • Page 174
    ... used for the purposes of listing on a stock exchange outside Germany. In addition, the Board of Management remains authorised to acquire treasury shares using derivatives. Deutsche Post AG acquired treasury shares for the total amount of â,¬31 million (average price of â,¬29.42 per share) in order...

  • Page 175
    ... Statements - nOTES - Balance sheet disclosures 165 36.4 Disclosures on corporate capital The equity ratio was 29.8 % in financial year 2015 (previous year: 25.9 %). 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...

  • Page 176
    ... 2015. This corresponds to a dividend of â,¬0.85 per share. Information on the change due to remeasurements of net pension provisions before tax can be found in note 42.6. At 1 January Transactions with non-controlling interests Comprehensive income Changes from unrealised gains and losses Changes...

  • Page 177
    ... dividend â,¬m Dividend per share â,¬ DHL Sinotrans International Air Courier Ltd., China Blue Dart Express Limited, India Exel Saudia LLC, Saudi Arabia Other companies non-controlling interests 143 8 6 47 204 176 12 9 64 261 Dividend distributed in financial year 2015 for the year 2014 Dividend...

  • Page 178
    ... plan also provides for invalidity benefits and surviving dependents' benefits. Retirement arrangements with a similar structure are available to executives below the management board level and to specific employee groups through deferred compensation. Deutsche Post DHL Group - 2015 Annual Report

  • Page 179
    ...of defined benefit retirement plans. Of these risks, the interest rate risk and investment risk in particular are still deemed to be significant. The information below on pension obligations is broken down into the following areas: Germany, UK and Other. Deutsche Post DHL Group - 2015 Annual Report

  • Page 180
    ... sheet items The balance sheet items were calculated as follows: â,¬m Germany UK Other Total 2015 Present value of defined benefit obligations at 31 December Fair value of plan assets at 31 December Surplus (-) / deficit (+) at 31 December Effects of asset ceilings at 31 December net pension...

  • Page 181
    ... Financial Statements - nOTES - Balance sheet disclosures 171 42.2 Present value of defined benefit obligations The present value of defined benefit obligations changed as follows: â,¬m Germany UK Other Total 2015 Present value of defined benefit obligations at 1 January Current service cost...

  • Page 182
    ... in the euro zone or the UK, 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. For the annual pension increase in Germany, agreed rates in...

  • Page 183
    ... Statements - nOTES - Balance sheet disclosures 173 If one of the significant financial assumptions were to change, the present value of the defined benefit obligations would change as follows: % Change in assumption Germany Change in present value of defined benefit obligations UK Other Total...

  • Page 184
    ... as follows: â,¬m Germany UK Other Total 31 December 2015 Equities Fixed income securities Real estate Alternatives Insurances Cash Other Fair value of plan assets 31 December 2014 Equities Fixed income securities Real estate Alternatives Insurances Cash Other Fair value of plan assets 753 1,461...

  • Page 185
    ...amounting to â,¬438 million are expected with regard to net pension provisions in 2016. Of this amount, â,¬193 million is attributable to the Group's expected direct benefit payments and â,¬245 million to expected employer contributions to pension funds. Deutsche Post DHL Group - 2015 Annual Report

  • Page 186
    ... UK by largely closing the defined benefit arrangements as well as by setting fixed rates of increase and / or by partially capping increases or partially providing for lump sum payments. Additionally, there is a positive correlation with interest rates. Deutsche Post DHL Group - 2015 Annual Report

  • Page 187
    ... Financial Statements - nOTES - Balance sheet disclosures 177 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 diversification and using risk...

  • Page 188
    ...relate to the negative fair values of derivative financial instruments. 44.1 Bonds The following table contains further details on the company's most significant bonds. The bonds issued by Deutsche Post Finance B. V. are fully guaranteed by Deutsche Post AG. Deutsche Post DHL Group - 2015 Annual...

  • Page 189
    ... in profit or loss. 44.2 Finance lease liabilities Finance lease liabilities mainly relate to the following items: Interest rate % 2014 â,¬m 2015 â,¬m Leasing partner End of term Asset Deutsche Post Immobilien GmbH, Germany DHL Express (Austria) GmbH, Austria Deutsche Post AG, Germany Deutsche...

  • Page 190
    ...risk because most of these instruments bear floating rates of interest at market rates. 46 Trade payables Most of the trade payables have a maturity of less than one year. The reported carrying amount of trade payables corresponds to their fair value. Deutsche Post DHL Group - 2015 Annual Report

  • Page 191
    ....2 net cash used in investing activities Cash flows from operating activities are calculated by adjusting consolidated net profit / loss for tax expenses, net financial income / net finance costs and non-cash factors, as well as taxes paid, changes in provisions and in other non-current assets and...

  • Page 192
    ... increased amount of cash paid to acquire property, plant and equipment, and intangible assets. 47.3 net cash used in financing activities The following table shows the calculation of free cash flow: Calculation of free cash flow â,¬m 2014 2015 net cash from operating activities Sale of property...

  • Page 193
    ... 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 assigned to the banks are reviewed on a daily basis. The Group's Board of Management is informed internally at...

  • Page 194
    ...currency-related value at risk (95 % / one-month holding period) for the portfolio totalled â,¬5 million (previous year: â,¬6 million) at the reporting date; the current limit was a maximum of â,¬5 million. The notional amount of the currency forwards and currency swaps used to manage balance sheet...

  • Page 195
    ...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...

  • Page 196
    ... values due to the individual counterparties' credit quality. This was not the case for any of the counterparties as at 31 December 2015. Default risks are continuously monitored in the operating business. The aggregate carrying amounts of financial assets represent the maximum default risk. Trade...

  • Page 197
    ...December 2015. CASH FLOW HEDGES The Group uses currency forwards and currency swaps to hedge the cash flow risk from future foreign currency operating revenue and expenses. The fair values of currency forwards and currency swaps amounted to â,¬-15 million at the reporting date (previous year: â,¬-18...

  • Page 198
    ... profit or loss Trading Fair value option Available-for-sale financial assets ASSETS Non-current financial assets at cost at fair value Trade receivables at cost Other current assets at cost outside IFRS 7 Current financial assets at cost at fair value Cash and cash equivalents Total ASSETS EQUITY...

  • Page 199
    ... 0 45 50 0 0 0 0 5 0 0 55 867 246 n. a. n. a. n. a. n. a. 69 n. a. - 4,467 0 142 0 419 0 7,069 355 0 12,452 0 17 0 0 0 62 0 0 0 79 141 0 0 0 26 0 0 0 0 167 5,192 17 142 n. a. n. a. 108 n. a. n. a. n. a. - Deutsche Post DHL Group - 2015 Annual Report

  • Page 200
    ... profit or loss Trading Fair value option Available-for-sale financial assets ASSETS Non-current financial assets at cost at fair value Trade receivables at cost Other current assets at cost outside IFRS 7 Current financial assets at cost at fair value Cash and cash equivalents Total ASSETS EQUITY...

  • Page 201
    ... carrying amounts as at the reporting date are approximately equivalent to their fair values. Not included are financial investments in equity instruments for which there is no quoted price in an active market and which therefore have to be measured at cost. Deutsche Post DHL Group - 2015 Annual...

  • Page 202
    ... ratios result in lower fair values. No financial instruments were transferred between levels in financial year 2015. The following table shows the effect on net gains and losses of the financial instruments categorised within level 3 as at the reporting date: Deutsche Post DHL Group - 2015 Annual...

  • Page 203
    ... 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 creates a conditional right of set-off that can only be enforced by taking legal action. To hedge cash flow and fair value risks...

  • Page 204
    ...Assets and liabilities not set off in the balance sheet Gross amount of liabilities Gross amount of assets set off Assets that do not meet offsetting criteria Collateral provided Total liabilities at 31 December 2015 Derivative financial liabilities 1 Trade payables liabilities at 31 December 2014...

  • Page 205
    ... on 2 January 2014, â,¬20.2 million on 2 January 2015 and â,¬20.1 million on 4 January 2016. Those payments were reported in the balance sheet under non-current assets; the earnings position remained unaffected. The European Commission has not expressed its final acceptance of the calculation of the...

  • Page 206
    ... the applicable provisions of European Community law. Due to the legal uncertainty resulting from the new legislation, Deutsche Post AG is endeavouring to clarify certain key issues with the tax authorities, note 49. On 30 June 2014, DHL Express France received a statement of objections from the...

  • Page 207
    ... a cash settlement equal to the difference between the average closing price of Deutsche Post shares during the last five trading days before the exercise date and the issue price of the SAR. The members of the Board of Management each invest 10 % of their fixed annual remuneration (annual base...

  • Page 208
    ...to the Board of Management. â,¬15 million of the total provision (previous year: â,¬6 million) related to rights exercisable at the reporting date. 52.4 Performance Share Plan for executives Performance Share Plan 2014 tranche 2015 tranche Grant date Exercise price Waiting period expires Risk-free...

  • Page 209
    ... its non-controlling interest, has a secure majority at the Annual General Meeting due to its average presence there. Deutsche Telekom AG is therefore a related party of Deutsche Post AG. In financial year 2015, Deutsche Post DHL Group provided goods and services (mainly transport services for...

  • Page 210
    ... 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 â,¬31 million as at the reporting date (previous year: â,¬34 million). The share...

  • Page 211
    ...members of the Board of Management in financial year 2015 including the components with a long-term incentive effect totalled â,¬17.4 million (previous year: â,¬20.9 million). Of this amount, â,¬7.1 million (previous year: â,¬7.6 million) is attributable to non-performance-related components (annual...

  • Page 212
    ... Center GmbH DHL Supply Chain (Leipzig) GmbH DHL Supply Chain Management GmbH DHL Supply Chain VAS GmbH DHL Trade Fairs & Events GmbH DHL Verwaltungs GmbH Erste End of Runway Development Leipzig GmbH Erste Logistik Entwicklungsgesellschaft MG GmbH European Air Transport Leipzig GmbH FIRST MAIL...

  • Page 213
    ... the DHL divisions' access to the French e-commerce market. The investment supports the expansion of the collection point network and special delivery services for Relais Colis' e-commerce customers. Relais Colis will be accounted for using the equity method in the consolidated financial statements...

  • Page 214
    ... and fair view of the net assets and financial position of the Group as at 31 December 2015 as well as the results of operations for the business year then ended, in accordance with these requirements. Report on the Group management Report We have audited the consolidated financial statements of...

  • Page 215
    D FURTHER INFORMATION 205 - 212 D FURTHER InFORmaTIOn

  • Page 216
    D 207 208 209 210 212 212 FURTHER INFORMATION INDEX GLOSSARY GRAPHS AND TABLES MULTI-YEAR REVIEW PUBLICATION SERVICE CONTACTS FINANCIAL CALENDAR

  • Page 217
    ... 202 Working capital 37 f., 52, 59, 64, 68, 78, 157 O Ocean freight 24, 30, 47, 67 f., 96 Oil price 30, 46, 50 f., 65, 67, 94 ff. Operating cash flow 38, 44, 53 f., 59, 62, 70, 181, 210 Opportunities and risk management 84 ff. Outlook 44, 56, 84, 94 ff. Deutsche Post DHL Group - 2015 Annual Report

  • Page 218
    ...-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. Day Definite Delivery of shipments on a specified day. DHL Customer Solutions & Innovation...

  • Page 219
    ... to the Board of Management members who left the company in financial year 2015 B.10 Share-based component with long-term incentive effect 105 105 108 108 112 A.03 Nationwide transport and delivery network in Germany, 2015 25 A.04 Domestic mail communication market, business customers, 2015 A.05...

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    ... Mail) Express Global Forwarding, Freight Supply Chain Divisions total Corporate Center / Other Consolidation Total (continuing operations) Discontinued operations Consolidated net profit / loss for the period Cash flow / capex / depreciation, amortisation and impairment losses Net cash from / used...

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    ... 2014 2015 Employees / staff costs (continuing operations) 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...

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    ...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 IR APP With the Deutsche Post DHL IR app you can receive investor relations and financial media news directly on your iPad. Deutsche Post DHL Group - 2015 Annual Report

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    FINANCIAL CALENDAR 2016 11 MAY 2016 Interim Report as at 31 March 2016 18 MAY 2016 2016 Annual General Meeting (Frankfurt am Main) 19 MAY 2016 Dividend payment 3 AUGUST 2016 Interim Report as at 30 June 2016 8 NOVEMBER 2016 Interim Report as at 30 September 2016 2017 8 MARCH 2017 2016 Annual ...

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