DHL 2004 Annual Report Download - page 54

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Operating expenses before goodwill amortization increased by 7.7% year-on-year
to € 41,186 million (previous year: € 38,245 million). The rise was principally the result
of a marked increase in materials expenses to € 20,546 million, which exceeded the prior-
year figure of €18,466 million by 11.3%. There were two main reasons for this: initial
full-year consolidation of companies acquired and rises in fuel and transport costs. As a
result of acquisitions, staff costs also rose, from €13,329 million to €13,744 million, by
3.1%. The ratio of staff costs to revenue for the Group as a whole fell from 33.3% to 31.8%.
Depreciation and amortization (excluding goodwill amortization) increased by 4.2% to
€1,451 million (previous year: €1,392 million) and other operating expenses grew by 7.7%
in total to € 5,445 million (previous year: € 5,058 million). Both were mainly the result of
the expansion of the consolidated group.
Profit from operating activities before goodwill amortization (EBITA) for the
Group recorded encouraging growth. Thanks to healthy business development in the
LOGISTICS and FINANCIAL SERVICES Corporate Divisions in particular, it rose 12.5%
to € 3,347 million (previous year: € 2,975 million). Currency effects led to EBITA growth
of € 47 million.
Our original forecast was for an increase in EBITA in the 5-10% range; during the
year, we revised the range upwards to 7.5-12.5%. This was due to the net income from
Postbank’s IPO. The return on sales based on EBITA improved from 7.4% to 7.8%.
Profit from operating activities before goodwill amortization (EBITA) in the
“Postbank at equity” scenario amounted to € 2,677 million in the year under review (pre-
vious year: € 2,451 million), while the return on sales remained on a par with the previous
year at 7.2%.
Goodwill amortization in the year under review was € 370 million (previous year:
€ 319 million). The increase was largely the result of the acquisition of Airborne Inc. in
the previous year. From 2005 on, goodwill will no longer be amortized. As before, impair-
ment tests are required to be carried out at least once a year.
Profit from operating activities (EBIT) improved by 12.1% to € 2,977 million (pre-
vious year: € 2,656 million).
Net finance costs totaled € 821 million (previous year: € 741 million) in the period
under review. The deterioration can be attributed mainly to a 15.7% change in net other
finance costs to € 825 million (previous year: € 713 million). Since 2003, this item has
contained the interest cost on provisions for pensions and other interest-bearing pro-
visions. In the year under review, this amount rose by € 59 million to € 637 million and
was therefore the main reason for the deterioration in net finance costs. Net finance costs
also increased due to write-downs of financial assets and financial instruments of € 22
million. Net income from associates amounted to € 4 million (previous year: € –28 mil-
lion); the prior-year figure included losses on the sale of the interest in DHL Airways.
Profit from ordinary activities increased by 12.6% to € 2,156 million (previous year:
€1,915 million) reflecting the healthy development of the Group’s operating business.
The tax rate fell from 29.9% in the previous year to 20.0% for the year under review.
This reduction is mainly because we were able to reduce the provision for additional taxes
from tax audits.
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