DHL 2009 Annual Report Download

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SHOWING RESPECT.
DELIVERING RESULTS.
ANNUAL REPORT
2009

Table of contents

  • Page 1
    SHOWING RESPECT. DELIVERING RESULTS. T A N N UA L R E P O R 2009

  • Page 2
    ... dhl corporate brands offer a one-of-a-kind portfolio of logistics (dhl) and communications (Deutsche Post) services. The Group provides its customers with both easy to use standardised products as well as innovative and tailored solutions ranging from dialogue marketing to industrial supply chains...

  • Page 3
    ... Global Customer Solutions (gcs) hr dhl International dhl Solutions & Innovations (dsi) Board department Board member Finance, Global Business Services Lawrence Rosen Corporate Controlling Corporate Accounting and Reporting Investor Relations Corporate Finance Corporate Internal Audit / Security...

  • Page 4
    ... 644 million. Consolidated net profit • Improve net profit in line with operating business. Capital expenditure (capex) • Reduce investments from â,¬ 1.7 billion (2008) to no more than â,¬ 1.2 billion. Capital expenditure (capex) • Invested: â,¬ 1.17 billion. Capital expenditure (capex...

  • Page 5
    ... We restructured our express business and consolidated our financial position with the proceeds from the sale of Postbank. We saved more than â,¬ 1.1 billion in indirect costs with our IndEx programme. Although transported volumes were significantly down on the prior-year level, we were also...

  • Page 6
    CONTENTS GROUP MANAGEMENT REPORT 13 A CORPORATE GOVERNANCE 99 B CONSOLIDATED FINANCIAL STATEMENTS 123 C FURTHER INFORMATION 221 D Detailed table of contents

  • Page 7
    ... GROUP MANAGEMENT REPORT 13 A CORPORATE GOVERNANCE Business and Environment Capital Market Earnings, Financial Position and Assets and Liabilities Divisions Non-financial Performance Indicators Risks Further Developments and Outlook 15 28 32 45 71 83 92 99 B CONSOLIDATED FINANCIAL STATEMENTS...

  • Page 8
    ... and the environment with respect. On the following pages of this annual report, we provide an overview of how we are expressing this commitment and why we are convinced of it: LIVING LIVING LIVING LIVING RESPONSIBILITY RESPONSIBILITY - GoGreen RESPONSIBILITY - GoHelp RESPONSIBILITY - GoTeach 13...

  • Page 9
    ... logistics business and a solid mail business with new electronic value added services. Our aim is to remain Die Post für Deutschland (The Postal Service for Germany) and to become The Logistics Company for the World. Clear structures, increased co-operation and mobility within the Group...

  • Page 10
    SHOWING RESPECT. DELIVERING RESULTS. The special addition to the 2009 Annual Report

  • Page 11
    .... EXECUTING OUR STRATEGY. Deutsche Post DHL's goal is clear. We intend to win over our customers again and again every day all over the world, and we will do this by living our convictions: making transparent offers that simplify people's lives; providing easy access to transport services for...

  • Page 12
    ... g Germany" and to in er liv de r ing principle fo needs is our guid 2 ve industry for the automoti Contract logistics unication ure means of comm Evolution of a sec requirements rt po complex trans nt shipping Meeting the most rcel and docume ational express pa First-class intern ccess key measure...

  • Page 13
    2 SHOW ING RESP ECT FOR THOSE WHO NEED TO RESPOND FASTER TO CHANGING MARKETS. CONTR ACT LOGIS TICS FOR THE AUTOM OTIVE INDUS TRY Worldwide

  • Page 14
    ...at the international level. The keys to making this happen are the efficiency, quality and speed of the supply chain - components need to be manufactured, transported and delivered on time to production facilities. DHL's sustainable supply chain solutions provide these keys. We work closely with our...

  • Page 15
    SHOW ING RESP ECT FOR THOSE WHO WANT THE SPEED OF AN E-MAIL BUT WITH THE SECURITY OF A LETTER. EVOLU TION OF A SECUR E MEAN S OF COMM UNICA TION Germany

  • Page 16
    ... mail or as advertising mail. Deutsche Post's innovative letter on the internet takes our quality service online. For the first time, both business and private customers can access a fast means of communication with all the advantages of the traditional letter - accountability, confidentiality...

  • Page 17
    6 SHOWING RESPECT FOR THOSE WHO WANT TO MAKE BIG MOVES AROUND THE WORLD. MEETI NG THE MOST COMP LEX TR ANSPO RT REQU IREME NTS Worldwide

  • Page 18
    ... something we do every day. We offer customised logistics solutions around the world for the combined transport of goods by air, land and sea. As a freight forwarder, we broker between customers and freight companies and combine orders so as to reach a volume that allows us to secure cargo space and...

  • Page 19
    SHOW ING RESP ECT FOR THOSE WHO NEED TO RELY ON THEIR SHIPMENT ARRIVING TOMORROW. FIRST -CL ASS INTER NATIO NAL EXPRE SS PARCE L AND DOCU MENT SHIPP ING Worldwide

  • Page 20
    ...direct, day definite or time definite, this guarantees our customers uniquely effective express services. DELIVERING RESULTS Our customers receive express delivery services that are easy to use, convenient, fast and reliable across cultural and national borders. Deutsche Post DHL focuses on customer...

  • Page 21
    SHOW ING RESP ECT FOR THOSE WHO WANT TO HELP PRESERVE THE ENVIRONMENT. SUSTA INABI LIT Y - A KEY MEAS URE OF SUCCE SS Germany

  • Page 22
    ... aimed at improving our carbon efficiency by 30 % over 2007 levels by the year 2020. Deutsche Post DHL understands that customers and investors are becoming more and more interested in companies that are sustainable and that openly accept their corporate responsibility. 1. INCREASING INDEPENDENCE...

  • Page 23
    ...rst globally operating company in our industry to have set a measurable climate protection target. By 2020, we want to improve our carbon efficiency by 30 % over 2007 levels. DELIVERING RESULTS Through efficient transport, optimised planning and the use of alternative energy sources and innovative...

  • Page 24
    Published by Deutsche Post ag Headquarters 53250 Bonn Germany Contacts Press office Tel.: +49 (0) 228 182- 99 44 Fax: +49 (0) 228 182- 98 80 e-mail: pressestelle @ deutschepost.de Deutsche Post www.deutschepost.com dhl www.dhl.com www.dhl-brandworld.com Investor Relations Tel.: +49 (0) 228 182- ...

  • Page 25
    Deutsche Post ag Headquarters 53250 Bonn Germany www.dp-dhl.com

  • Page 26
    Dr Frank Appel, Chief Executive Officer

  • Page 27
    Letter to our Shareholders 7 1 March 2010 Financial year 2009

  • Page 28
    ...In air and ocean freight, we have secured our capacities on the most important trade lanes between Asia and Europe. Furthermore, our contract logistics business won a renowned customer in British Airways in one of our key strategic industry sectors. 1 /2 Deutsche Post DHL The Mail & Logistics Group...

  • Page 29
    ...1.9 billion in 2010. For the first time both pillars of our business will contribute nearly equally to these results - an indication of the strength of our two-pillar strategy. We want to remain Die Post für Deutschland (The Postal Service for Germany) and become The Logistics Company for the World...

  • Page 30
    GROUP MANAGEMENT REPORT GROUP MANAGEMENT REPORT A LIVING RESPONSIBILITY Since we operate all over the world, we bear a special responsibility to use our knowledge and experience for the betterment of society and to limit any negative impact our business may have on the environment. Living ...

  • Page 31
    ... 42 45 45 Overview mail express global forwarding, freight supply chain 45 46 53 61 66 NON-FINANCIAL PERFORMANCE INDICATORS 71 71 Employees Corporate responsibility Procurement Research and development Brands 71 76 79 81 81 RISKS 83 83 Opportunity and risk management Risk categories and...

  • Page 32
    ... BUSINESS ACTIVITIES AND ORGANISATION The leading mail and logistics group Deutsche Post DHL maintains a global network that offers our customers everything they need for transporting and processing goods and information, from standard products to customised solutions. We place great value...

  • Page 33
    ...• Business departments • Service departments • Regions • Departments Legal structure Based on the Group's legal entities • Deutsche Post ag • Group companies Brand names According to the brand names used in customer communication • Deutsche Post • dhl New Board members for express...

  • Page 34
    ... 2009, the company's share capital totalled â,¬1,209,015,874 and was composed of the same number of no-par value registered shares. Each share carries the same statutory rights and obligations and entitles the holder to one vote at the Annual General Meeting (AGM). No individual shareholder or group...

  • Page 35
    ...or shareholdings in companies. To date, the Board of Management has not made use of this authorisation. Finally, the AGM of 21 April 2009 authorised the company to buy back shares up to an amount not to exceed 10 % of the share capital existing as of that date, by or before Deutsche Post DHL Annual...

  • Page 36
    ...the company the opportunity to structure the share repurchase in an optimum manner. On 28 April 2010, the Board of Management and the Supervisory Board will propose to the AGM that both authorisations be granted for a further year. Any public offer to acquire shares in the company is governed solely...

  • Page 37
    ... Board are described in the Corporate Governance Report under Remuneration Report. The latter also forms part of the Group Management Report. ECONOMIC PARAMETERS Global economy in crisis At the start of 2009, the global economy found itself in its deepest recession in decades. The financial market...

  • Page 38
    ...barrel - its lowest level for several years. However, by mid-year oil prices were back up to US$70 due to OPEC production cuts and improved economic indicators. By year-end the price had reached nearly US$80 a barrel. a.04 Brent Crude spot price and euro / us dollar exchange rate, 2009 us $ 100 1.65...

  • Page 39
    ... 2010, however. Asia is expected to remain a global growth engine and continue to play a key role in this growth in the future. a.05 Trade volumes: compound annual growth rate 2008 - 2009 % Exports Imports Africa 2.1 2.0 0.2 2.3 3.2 âˆ'8.3 Asia Pacific 3.2 âˆ'2.1 âˆ'6.5 5.1 âˆ'6.2 âˆ'6.5 Europe...

  • Page 40
    .... The regions shown reflect our business structure. The relevant parameters and our market shares are detailed in the Divisions chapter. a.07 Market volumes Global • International mail market (outbound, 2009): â,¬ 7 bn1) • Air freight (2008): â,¬ 19.0 m tonnes2) • Ocean freight (2008): â,¬ 31...

  • Page 41
    ... on our business: 1 Globalisation The elimination of trade and customs barriers is enabling companies to develop new markets and move activities to locations that offer competitive advantages. As a result, international trade is growing along with demand for transport and logistics services. Against...

  • Page 42
    ...our logistics business. Our new Group name, Deutsche Post DHL, underscores the significance of these two pillars of our business. The Deutsche Post brand stands for a company that sets global standards in quality, technology and efficiency and has already proven itself able to very successfully meet...

  • Page 43
    ...DHL brand stands for a comprehensive product portfolio and worldwide logistics presence. Our EXPRESS, GLOBAL FORWARDING, FREIGHT, and SUPPLY CHAIN divisions operate in attractive market segments. Our goal is to continue taking advantage of the excellent growth opportunities in the logistics industry...

  • Page 44
    ...profit from operating activities (EBIT). We aim for sustained value growth in all areas of our operating business. To this end, we carefully control not only targeted profits but also the use of resources necessary to meet this goal. Executives are now expected to place greater emphasis on the asset...

  • Page 45
    ... Post shares, multi-year review 2004 2005 2006 2007 2008 2009 Year-end closing price High Low Number of shares Market capitalisation as at 31 December Average trading volume per day Annual performance including dividend Annual performance excluding dividend Beta factor2) Earnings per share3) Cash...

  • Page 46
    ... beginning to take effect. The share price moved back up, this time to stay, and our third-quarter figures confirmed that our efforts had taken hold. At this time the economic output of the major industrial countries also showed improvement for the first time in the year. The positive sentiment that...

  • Page 47
    ... were the sale of Postbank to Deutsche Bank as well as the mail business, particularly wage negotiations and the possible introduction of a value added tax on mail products. Our IR team and management spoke with investors about these and other topics in numerous individual meetings and at...

  • Page 48
    ...Reduction in net working capital of â,¬ 700 million by the end of 2009. • Cash proceeds of at least â,¬ 1 billion from the sale of non-strategic assets within 24 months. 3 Dividend • Proposed dividend increase of 20 % to â,¬ 0.90 per share for 2007 and continuous growth in the years to follow...

  • Page 49
    ... from Deutsche Post DHL in return for 50 million Deutsche Bank shares from a capital increase (first tranche). By July 2009, Deutsche Post DHL sold all of its shares in Deutsche Bank AG on the market, as planned, taking a key step towards becoming a pure-play mail and logistics group. The Group...

  • Page 50
    ... end of February 2009. We report our other business activities as continuing operations. Consistent with international practice and to improve the clarity of presentation, we no longer report the return on plan assets in connection with pension obligations as part of EBIT but under net finance costs...

  • Page 51
    ... DHL considers this error insignificant and has accounted for it in the gain from the measurement of Postbank on an equity-accounted basis for financial year 2009. Net financial income has been reduced by â,¬ 25 million as a result. The profit from continuing operations before income taxes improved...

  • Page 52
    ...At the Annual General Meeting on 28 April 2010, the Board of Management and the Supervisory Board will propose the payment of a dividend per share of â,¬0.60 for financial year 2009 (previous year: â,¬0.60). The distribution ratio based on the consolidated net profit attributable to Deutsche Post AG...

  • Page 53
    ... the cost of capital. The Group has total unsecured committed credit lines of â,¬ 2.7 billion, of which only â,¬ 0.2 billion had been drawn down as at 31 December 2009. As part of our banking policy, we ensure we spread the volumes widely and maintain long-term business relationships with financial...

  • Page 54
    ...(26 June 2009)1) Long-term: Baa 1 Short-term: p-2 Outlook: stable Rating factors • Global network, with leading market positions in international European and Asian express delivery services • Dominant position in the German mail market supports Group cash ï¬,ow generation • Global number one...

  • Page 55
    ... finance received from the European Investment Bank for mail sorting centres in Germany and an IT centre in the Czech Republic. Other financial liabilities mainly comprise the sale of Deutsche Postbank AG shares in the form of a mandatory exchangeable bond, cash collateral and a hedging liability...

  • Page 56
    ...and the Exel brand. a.26 Capex and depreciation, q 4 â,¬m mail 2008 2009 2008 express 2009 forwarding, freight 2008 2009 supply chain 20081) 2009 Corporate Center / Other 2008 2009 Consolidation 2008 2009 Continuing operations 2008 2009 Capex Depreciation on assets Capex-to-depreciation ratio 113...

  • Page 57
    ... region, the Americas and Europe. Funds of â,¬ 24 million were invested in the Freight Business Unit, where they were used primarily for terminal expansion and state-of-the-art IT. In regional terms, we focused on Germany, Scandinavia and the Benelux countries. Deutsche Post DHL Annual Report 2009

  • Page 58
    ...This increase was mainly the result of restructuring. Cash ï¬,ow statement for continuing operations a.27 Operating cash ï¬,ow by division, 2009 â,¬m mail 1,148 express - 459 global forwarding, freight 528 supply chain 432 Net cash from operating activities fell by â,¬ 2,118 million year-on-year to...

  • Page 59
    ... the European and Asian air hubs in particular and we also participated in Postbank's capital increase. The change in current financial assets led to a net cash outflow of â,¬ 659 million. The sale of the Deutsche Bank shares resulted in a cash inflow which was invested in capital market instruments...

  • Page 60
    ... to the planned sale of our business involving domestic day-definite shipments in France and the UK, we reclassified the corresponding assets as held for sale. Part of the funds obtained from the sale of Postbank was invested in short-term capital market instruments; these represented the key factor...

  • Page 61
    ...the average number of years required to pay off outstanding debt using the cash flow generated from operating activities in the year under review. It changed from an average of 0.7 years to -1.4 years. a.29 Selected indicators for net assets (continuing operations) 20081) 2009 Equity ratio Net debt...

  • Page 62
    ... Global Mail Pension Service Consolidation/Other Profit from operating activities (ebit) before non-recurring items Profit from operating activities (ebit) Return on sales (%)1) Operating cash ï¬,ow express Revenue of which Europe Americas Asia Pacific eemea (Eastern Europe, the Middle East...

  • Page 63
    ... services Special services Database administration Payments BUSINESS UNITS AND MARKET POSITIONS a.32 Domestic mail communication market, 2009 Market volume: â,¬ 6.3 billion 12.8 % Competition The Postal Service for Germany 87.2 % Deutsche Post Source: company estimate. We are Europe's largest...

  • Page 64
    ...how companies that distribute customer or employee magazines via Deutsche Post usually send these items. Our special services include electronic address updating as well as complaint and quality management. According to a study carried out by Simon-Kucher & Partners, the German press services market...

  • Page 65
    ... method has changed. Source: company estimates. We deliver mail across borders, serve the domestic markets of countries outside of Germany and also provide special services beyond mail transport. We serve business customers in key domestic mail markets, including the USA, the Netherlands, the UK...

  • Page 66
    ... raises the level of automation and thus quality but also lowers production costs and carbon (CO2) emissions. Proximity to our customers is important to us. We operate the largest network by far of fixed-location retail outlets in Germany, consisting of some 17,000 outlets and sales points. We are...

  • Page 67
    ... account of both the nominal price for sending a standard letter (20 g) by the fastest method, and key macroeconomic factors such as purchasing power and labour costs. a.37 Mail Communication: volumes mail items (millions) Business customer letters Private customer letters Total 2008 adjusted 2009...

  • Page 68
    ...In international business, we transferred Europlus - a parcel product - to the EXPRESS division, resulting in total revenue in the Parcel Germany Business Unit only reaching the prior-year level. a.39 Parcel Germany: volumes parcels (millions) 2008 2009 +/-% Q 4 2008 Q 4 2009 +/-% Business customer...

  • Page 69
    ... the crisis The prior-year figures for profit from operating activities (EBIT) were adjusted because we no longer report the return on plan assets in connection with pension obligations as part of EBIT. It is now reported under the Group's net finance costs / net financial income. Division EBIT was...

  • Page 70
    ... Same Day dhl Day Definite Regions Europe Americas Asia Pacific eemea (Eastern Europe, the Middle East and Africa) Network 220 countries and territories 6 main hubs 22,400 Servicepoints 8.2 million customers 62,000 vehicles BUSINESS UNITS AND MARKET POSITIONS Network for time-critical shipments...

  • Page 71
    ... - the international express business. The United States will still remain an integral part of our global network, and the worldwide presence and capability of this network will guarantee us a leading position in the express market. We have continued to significantly improve our service quality and...

  • Page 72
    ... our customers with first-class service at competitive prices on all trade lanes, particularly to and from Asia and Eastern Europe. Although we saw volumes decline in our Time Definite International (TDI) product during the reporting year, the trend away from air express shipments and towards...

  • Page 73
    ... and EEMEA regions at our offices in Singapore. QUALITY Service advantage In the express business, customers consider on-time delivery an important indicator of quality. That is why we leverage a system to standardise and monitor the processes throughout our entire organisation. We can use it to...

  • Page 74
    ... strategy is our International Time Definite air traffic network. We offer competitive pricing and first-rate service on all the major trade lanes. As a profitable express service provider, we are constantly optimising our performance standards and our costs in order to expand our market leadership...

  • Page 75
    ... for Best Place to Work. Employee turnover continues to decline in this region. REVENUE AND EARNINGS PERFORMANCE Revenue and shipment volumes decline in 2009 Revenue in the EXPRESS division declined by 24.4 % in 2009 to â,¬ 10,312 million (previous year: â,¬13,637 million). Exchange rate losses...

  • Page 76
    Group Management Report Divisions express 59 a.45 express: revenue by product â,¬ m per day 2008 adjusted 2009 +/-% Q 4 2008 adjusted Q 4 2009 +/-% Total Time Definite International Time Definite Domestic Day Definite Domestic Excluding the usa Time Definite International Time Definite ...

  • Page 77
    ... by business growth in the Middle East and Africa. Strict cost management reï¬,ected in earnings performance The prior-year figures for profit from operating activities (EBIT) were adjusted because we no longer report the return on plan assets in connection with pension obligations as part of...

  • Page 78
    ... BUSINESS UNITS AND MARKET POSITIONS Global and individual transport solutions With its Global Forwarding and Freight business units, DHL is the world's largest provider of air and ocean freight services and one of the leading overland freight forwarders in Europe and the Middle East. We develop...

  • Page 79
    ... reports. DHL Freight is the second-largest overland freight forwarder in Europe and the Middle East, with approximately 10,000 employees and services in more than 53 countries. We see ourselves as a broker of freight capacity. In the overland transport business, we provide full-truckload, part...

  • Page 80
    ...only logistics company to be given this award. Supply Chain Asia, a logistics magazine, once again named us Air Freight Forwarder of the Year and Best Logistics Provider of the Year in India. All in all, our customers attest to the fact that the quality of our product offering has improved. Customer...

  • Page 81
    ..., results on trade lanes from northern Asia were weaker than in the previous year. Our business in the Middle East and Africa remained robust. a.50 Global Forwarding: revenue â,¬m 2008 2009 +/- % Q 4 2008 Q 4 2009 +/- % Air freight Ocean freight Other Total 5,388 3,418 1,779 10,585 3,957...

  • Page 82
    .... Operating cash ï¬,ow and net working capital trend encouraging The prior-year figures for EBIT were adjusted because we no longer report the return on plan assets in connection with pension obligations as part of EBIT. It is now reported under the Group's net finance costs / net financial income...

  • Page 83
    ... transport and value-added services, we ensure that products and information reach markets faster and more efficiently, and create competitive advantage for our customers. Our Supply Chain business is organised into four geographic regions. With local insight and global scale, we serve customers...

  • Page 84
    ... transport management to packaging and other value-added services. Customers in the Technology sector require fast, flexible and efficient supply chains, and the demand for integrated product and service parts logistics is increasing. We help our customers improve their cost structures, especially...

  • Page 85
    ... our market leading position. In addition, we are leveraging DHL's excellent customer relationships to win new business for Williams Lea. QUALITY Driving new business from improved customer satisfaction Corporate responsibility, page 76 f. Our goal is to lead the supply chain industry in quality...

  • Page 86
    ... market position. Our goal is to achieve long-term profitable growth in all of our markets and to supply high-quality services. In order to improve our profitability, we will continue the 5 to Thrive programme which was launched in early 2009 and which aims to reduce costs and enhance operational...

  • Page 87
    ... and new customers totalling â,¬ 1.1 billion in annualised revenue were signed by the Supply Chain Business Unit in 2009 despite the turbulent market conditions. Airline Business Solutions is a new sector we are focussing on following the contract won with British Airways. The contract renewal rate...

  • Page 88
    ...55 Number of employees (continuing operations) 2008 2009 +/- % At year-end Headcount1) Full-time equivalents2) of which mail express global forwarding, freight supply chain Corporate Center / Other of which Germany Europe (excluding Germany) Americas Asia Pacific Other regions Average for the year...

  • Page 89
    ... South America 28 % Europe (excluding Germany) 39 % Germany 1) Full-time equivalents as at 31 December. In the GLOBAL FORWARDING, FREIGHT division, the number of full-time equivalents dropped by 6.4 % to 38,859. The SUPPLY CHAIN division improved its competitive position by reducing the number of...

  • Page 90
    Group Management Report Non-financial performance indicators Employees 73 a.58 Occupational safety1) 2008 20093) Number of workplace accidents 2) 11,987 66 255,590 21.3 2 12,954 71 273,978 21.2 1 Accident rate (number of accidents per 1,000 employees per year) Number of working days lost due...

  • Page 91
    ...worked on business strategies and enhanced their leadership qualities during the year under review. We encourage our employees to gather experience in different divisions. In this way, we intend to improve co-operation within the Group as stated in our corporate strategy. In 2009, 19.1 % of internal...

  • Page 92
    Group Management Report Non-financial performance indicators Employees 75 a.61 Work-life balance1) Headcount 2008 2009 State-regulated parental leave Unpaid holiday for family reasons Part-time employees Share of part-time employees (%) 1) Includes employees of Deutsche Post ag. 2) Excluding ...

  • Page 93
    ...improved the quality of CO2 data, which we now record via our financial system. Carbon emissions from sub-contracted transport services will be detailed in the next Corporate Responsibility Report, which will also include a statement on our carbon efficiency in 2009. Deutsche Post DHL Annual Report...

  • Page 94
    ...are an important key to this process. In 2009, we asked our road transport partners if they were willing and able to report on their carbon efficiency. Based on their response, we developed a survey for the first half of 2010 to help us improve our data quality in this area. • Mobilising employees...

  • Page 95
    ... Asset Management gave us a rating of 91 out of 100 points (previous year: 65 points). We scored the highest in the categories of environment, corporate citizenship, social reporting and occupational health and safety. The average score for transport and logistics companies Deutsche Post DHL Annual...

  • Page 96
    ..., thus obtaining better conditions both internationally and regionally. We entered into a co-operation agreement with AT & T in the USA and in Puerto Rico for telephone and network services. The result is lower costs and improved service. In addition, we signed a five-year agreement with T-Systems...

  • Page 97
    ... the Group. The heads of Global Sourcing and their 16 category managers work closely with regional procurement managers and report to Corporate Procurement. This allows us to pool our needs worldwide whilst satisfying the service and quality requirements of internal customers. In order to streamline...

  • Page 98
    ... Global Mail Communication • Parcel Germany • Dialogue Marketing • Press Services • Philately • Pension Service • Express • Global Forwarding • Freight • Supply Chain Sub-brand • Williams Lea The competitive edge As a globally operating service company, well-managed brands...

  • Page 99
    ...how Deutsche Post and DHL are positioned and how our brands support our strategy. Of key importance to our brand image is how customers experience their interactions with our approximately 500,000 employees worldwide. In order to make a good impression, we have provided our employees who have direct...

  • Page 100
    ... review processes Aggregate Report 5 Control 3 Overall strategy Determine Control Review results Review measures Monitor early warning indicators 4 Operating measures Plan Implement Divisions Opportunity and risk control Board of Management Internal auditors 1 2 The most important...

  • Page 101
    ...constantly by those responsible. Corporate Internal Audit is tasked with ensuring that the Board of Management's specifications are adhered to. It also reviews the quality of the entire opportunity and risk management operation. The control units regularly analyse all parts of the process as well as...

  • Page 102
    ...Germany, it also opens up new opportunities in other European postal markets. In 2009, cross-border mail in Europe between Deutsche Post AG and 13 other western European postal operators was governed by the REIMS III agreement and with another nine Eastern European postal companies by the REIMS EAST...

  • Page 103
    ...-issued for all open tax periods. The VAT exemption for postal services is based on European law (postal services directive, VAT directive) and national German law (Postgesetz (postal act), Post-Universaldienstleistungsverordnung (postal universal service ordinance), Umsatzsteuergesetz (value added...

  • Page 104
    ... that our cost structure is flexible enough to limit any potential financial consequences. We offer our products and services in a competitive market. In the mail and logistics business, customers are gained and retained by offering quality at competitive prices. Thanks to our high quality and the...

  • Page 105
    ... able to benefit from this, even in a time of crisis. Risks arising from internal processes Reliability and speed are key indicators of the quality of our logistics services. Quality can be compromised by any problems that may arise in our complex operating infrastructure with regard to posting and...

  • Page 106
    ... monitored across the Group by Risk Management, IT Audit, Data Protection and Corporate Security. The Information Security Committee provides for secure IT in the divisions. At a minimum, we aim to meet the ISO 27002 industrial safety standard. Our logistics and service processes can only function...

  • Page 107
    ...are. DHL is the only logistics company to rank in the top fifty. Internally, we measure employee satisfaction on an annual basis in a survey of all Group employees. The survey findings indicate that the dedication of our employees has steadily improved over recent years. Given the fact that 2009 was...

  • Page 108
    ... see the main risk for our business performance in the economic and regulatory environment, particularly the future general economic trend and changed conditions on the German mail market. Based on the Group's early warning system and in the estimation of the Board of Management of the Group, in the...

  • Page 109
    ... gross domestic product Global Industrial nations Emerging markets Central and Eastern Europe Former cis countries Emerging markets in Asia Middle East Latin America and the Caribbean Africa Source: International Monetary Fund (imf) world economic outlook, October 2009, update January 2010. âˆ'12...

  • Page 110
    ... on traditional mail-order companies will persist with shipment volumes expected to drop, whilst the private customer segment will benefit from e-commerce, an area in which we intend to expand our position. Developing our international express business The international express market is expected...

  • Page 111
    .... Now all teams have direct access to information showing their contribution to the company's overall performance as well as potential areas of improvement. We plan to implement this system in all branches of the Global Forwarding Business Unit by the end of 2010. Continuing to improve Supply Chain...

  • Page 112
    ...Planned restructuring measures taken in the previous year on the order of â,¬ 1 billion will reduce operating cash flow in 2010. Consolidated net profit is expected to continue to improve in 2010 in line with our operating business. Provided that the global economy continues to recover, the positive...

  • Page 113
    ... capital expenditure at approximately the previous year's level. In the Global Forwarding Business Unit, we plan to put competence centres into operation, particularly for the pharmaceuticals industry, and invest in systems to improve the transparency of shipment processes. In the Freight Business...

  • Page 114
    ... logistics company to offer our customers carbon-neutral mail, parcel and express products plus air and ocean freight transport. Opportunities arising from our strategic market positioning We are positioned to take advantage of all types of growth, whether global, regional, cross-sector or industry...

  • Page 115
    ...raise productivity, increase customer satisfaction, strictly limit costs and kick off new sales activities. Our SUPPLY CHAIN division will continue to benefit from companies' willingness to outsource logistics services given the cost pressures that still persist everywhere. We will use our resources...

  • Page 116
    ... us and our customers more competitive in the long term. +30 % carbon efficiency by 2020 Our aim: For every letter mailed, every container shipped and every square metre of space used, the Group aims to improve its carbon efficiency by 30 % over 2007 levels by 2020. Our approach: We plan to hit...

  • Page 117
    ... OF THE SUPERVISORY BOARD 101 101 SUPERVISORY BOARD 105 105 106 Members of the Supervisory Board Committees 105 105 BOARD OF MANAGEMENT 106 MANDATES HELD BY THE BOARD OF MANAGEMENT 108 108 MANDATES HELD BY THE SUPERVISORY BOARD 109 109 CORPORATE GOVERNANCE REPORT 110 110 Remuneration...

  • Page 118
    ... field of financial services and the domestic express business in the US. Advising and overseeing the Board of Management In 2009, the Supervisory Board devoted close attention to Strategy 2015. We also held detailed discussions on and monitored the Group's business performance, particularly with...

  • Page 119
    ...annual and consolidated financial statements for 2008 and approved the updated planning for financial year 2009. We also reviewed the efficiency of the Supervisory Board's work based on an updated questionnaire. The resignation from the Board of Management of John Mullen was accepted at this meeting...

  • Page 120
    Corporate Governance Report of the Supervisory Board 103 Hard work by the committees The Executive Committee met nine times during the year under review. The agenda focused primarily on Board of Management and Supervisory Board business, the development of a new remuneration system for the Board ...

  • Page 121
    ... Finance and Audit Committee, the Supervisory Board reviewed the annual and consolidated financial statements and the management reports for financial year 2009 at the financial statements meeting held on 8 March 2010. The review included the Board of Management's proposal for the appropriation of...

  • Page 122
    ... the ver.di National Executive Board and Head of the Federal Postal Services, Forwarding Companies and Logistics section, ver.di National Executive Board Wolfgang Abel Management Consultant Werner Gatzer District Chairman for Postal Services, Freight Forwarding and Logistics of the ver.di district...

  • Page 123
    ... member of the Board of Management since 1 September 2009, appointed until August 2012, responsible for Finance, including Controlling, Corporate Accounting and Reporting, Investor Relations, Corporate Finance, Corporate Audit / Security and Taxes, as well as Global Business Services. Deutsche Post...

  • Page 124
    ... Walter Scheurle Personnel Born in 1961, member of the Board of Management since 2008, appointed until March 2016, responsible for the GLOBAL FORWARDING, FREIGHT division. Bruce Edwards supply chain Hermann Ude global forwarding, freight Jürgen Gerdes mail Deutsche Post DHL Annual Report 2009

  • Page 125
    ... a. de c. v.1) (Board of Directors) Left in financial year 2009: John Allan (until 30 June 2009) Deutsche Postbank ag1) Deutsche Lufthansa ag Exel North American Logistics, s. a. de c. v.1) (Board of Directors) Exel Servicios, s. a. de c. v.1) (Board of Directors) Exel Supply Chain Services de...

  • Page 126
    ... Group Ltd., New Zealand (Non-Executive Director), until 30 October 2009 message ag (Non-Executive Chairman) Postea Inc. (Non-Executive Chairman) Left in financial year 2009: Prof. Dr Ralf Krüger (until 21 April 2009) sireo real estate asset management GmbH (Advisory Board) Deutsche Post DHL...

  • Page 127
    ... hgb) dp-dhl.com/en/investors.html In this Annual Corporate Governance Statement, Deutsche Post DHL presents the main components of its corporate governance structure. These include the Declaration of Conformity from the Board of Management and Supervisory Board, information on corporate governance...

  • Page 128
    ... Corporate Governance Report 111 has on the environment to a minimum. We want to lead the way in innovative and sustainable logistics solutions. The idea of sustainability drives innovations and opens up new business opportunities, which gives us competitive advantages. Our sustainability strategy...

  • Page 129
    ... year 2009, the Supervisory Board met for seven plenary meetings and 21 committee meetings, as described in the Report of the Supervisory Board starting on page 102. The Board of Management and the Supervisory Board are in regular contact regarding strategic measures, planning, business development...

  • Page 130
    ..., Corporate Development and Legal Services in the case of acquisitions. The DHL Executive Committee generally meets twice per month and the MAIL Steering Committee once. Furthermore, business review meetings take place once per quarter. These meetings are part of the strategic performance dialogue...

  • Page 131
    ..., missed or exceeded. The Group's EBIT after asset charge performance metric is the main parameter used in this calculation. For the Board of Management members in charge of the MAIL, GLOBAL FORWARDING, FREIGHT, EXPRESS and SUPPLY CHAIN divisions, the EBIT after asset charge of their respective...

  • Page 132
    ... Deutsche Post shares for the five trading days preceding the exercise date and the exercise price of the SAR. In 2009, the members of the Board of Management each invested 10 % of their annual target salary per tranche in Deutsche Post shares. When the stock appreciation rights were granted as part...

  • Page 133
    ...of the Germany Corporate Governance Code. The amount of the payment is reduced by 25 % if the Board of Management member has not reached the age of 60 upon leaving the company. If the remaining term of the Board of Management contract is less than two years and the Board of Management member has not...

  • Page 134
    ... to active members of the Group Board of Management in financial year 2009 The following table presents the total remuneration paid to active Board of Management members: b.05 Remuneration of the Group Board of Management, 2009: cash components â,¬ Non-performance-related Fixed annual remuneration...

  • Page 135
    118 b.06 Remuneration of the Group Board of Management, 2009: components with long-term incentive effect â,¬ Active board members Number of SAR Value of SAR on grant date (1 July 2009) Change in value of total SAR granted from 2006 to 2009 on 31 Dec. 2009 compared with value on grant date Dr Frank...

  • Page 136
    ... benefits increase or decrease to reflect changes in the consumer price index in Germany. b.09 Individual pension commitments under the previous system in financial year 2009 Pension commitments Pension level on 31 Dec. 2009 % Maximum pension level % Service cost for pension obligation Financial...

  • Page 137
    ... using the assessment basis applicable at the time of his appointment to the Board of Management. b.11 Individual pension commitments under the new system in financial year 2009 â,¬ Total contribution for 2009 Pension account balance as at 31 Dec. 2009 Service cost for pension obligation Financial...

  • Page 138
    ... year 2009, the members of the Supervisory Board are entitled to annual performance-related remuneration with a long-term incentive effect of â,¬300 for every 3% by which the consolidated net profit per share for financial year 2011 exceeds the consolidated net profit per share for financial year...

  • Page 139
    ...) totalled â,¬ 747,500 in 2009 (previous year: â,¬ 766,833) and performance-related remuneration â,¬ 9,263 (previous year: â,¬ 0). The following table presents the total remuneration paid to each Supervisory Board member: b.13 Remuneration paid to individual Supervisory Board members Short-term...

  • Page 140
    ...: Three strategically located dhl Disaster Response Teams with approximately 200 volunteers are ready to respond at all times anywhere in the world. We also offer our Get Airports Ready for Disaster programme to prepare local authorities and airport staff for emergency situations. drt Middle East...

  • Page 141
    ... assets Current financial assets Cash and cash equivalents Assets held for sale and liabilities associated with assets held for sale Issued capital Other reserves Retained earnings Equity attributable to Deutsche Post ag shareholders Minority interest Provisions for pensions and other employee...

  • Page 142
    Consolidated Financial Statements Income Statement 125 C.01 INCOME STATEMENT 1 January to 31 December â,¬m Note 2008 adjusted1) 2009 Continuing operations Revenue Other operating income Total operating income Materials expense Staff costs Depreciation, amortisation and impairment losses Other ...

  • Page 143
    ...losses Changes from realised gains and losses Income taxes relating to components of other comprehensive income Share of other comprehensive income of associates (after taxes) Other comprehensive income (after taxes) Total comprehensive income attributable to Deutsche Post ag shareholders Minorities...

  • Page 144
    ... assets Cash and cash equivalents Assets held for sale Current assets Total assets equity and liabilities Issued capital Other reserves Retained earnings Equity attributable to Deutsche Post AG shareholders Minority interest Equity Provisions for pensions and other employee benefits Deferred tax...

  • Page 145
    ... paid to Deutsche Post ag shareholders Dividend paid to other shareholders Issuance of shares under stock option plan Interest paid Net cash used in / from financing activities due to continuing operations Net cash from financing activities due to discontinued operations Total net cash used in...

  • Page 146
    ... attributable to Deutsche Post ag shareholders 42 Minority interest adjusted1) 43 Total equity Note Balance at 1 January 2008 Capital transactions with owner Dividend Changes in minoritiy interest due to changes in consolidated group Stock option plans (exercise) Stock option plans (issuance) 39...

  • Page 147
    ...) 2009 global forwarding, freight1) 2008 2009 supply chain1) 2008 2009 Corporate Center / Other1) 2008 2009 Consolidation1) 2008 2009 Continuing operations1) 2008 2009 Discontinued operations 2008 2009 External revenue Internal revenue Total revenue Profit / loss from operating activities...

  • Page 148
    ... for issue by a resolution of the Board of Management of Deutsche Post AG dated 19 February 2010. The consolidated financial statements are prepared in euros (â,¬). Unless otherwise stated, all amounts are given in millions of euros (â,¬ million, â,¬ m). 1 Basis of accounting 2008 2009 Number of...

  • Page 149
    ...in the period under review: Deutsche Postbank Group, Germany; DHL Global Mail Services SAS, France; DHL Container Logistics UK Ltd., UK; 4C Associates Ltd., UK. The insignificant acquisitions in financial year 2009 contributed a total of â,¬ 26 million to consolidated revenue and â,¬ -11 million to...

  • Page 150
    ... the consolidated financial statements: In addition to the changes in the consolidated group cited in Note 2, the following significant transactions affected the Group's net assets, financial position and results of operations in financial year 2009: As part of the sale of Deutsche Postbank shares...

  • Page 151
    ...reduce revenue and earnings projections for 2010 and beyond. The insolvency impacted earnings by â,¬ - 247 million in the financial year. Deutsche Post DHL withdrew from the domestic US express business with effect from the beginning of February 2009. The full range of international products remains...

  • Page 152
    ... are currently being assessed. On 18 June 2009, the IASB issued amendments to IFRS 2 (Share-based Payment), which clarify the accounting treatment of Group cash-settled share-based transactions. The amendments set out basic principles that have amended the scope of, and a number of the definitions...

  • Page 153
    ... entirety by the end of 2010. Developments at the European Commission must be awaited; the corresponding effects on the Group are being assessed. IFRIC 19 (Extinguishing Financial Liabilities with Equity Instruments) was issued on 26 November 2009. This Interpretation addresses the accounting by an...

  • Page 154
    ... cost, with the exception of specific financial instruments to be recognised at their fair value. Revenue and expense recognition 7 Accounting policies Deutsche Post DHL's normal business operations consist of the provision of logistics services. All income relating to normal business operations...

  • Page 155
    .... Value added tax arising in conjunction with the acquisition or production of items of property, plant or equipment is included in the cost if it cannot be deducted as input tax. Depreciation is generally charged using the straight-line method. The Group uses the estimated useful lives indicated...

  • Page 156
    ... methods and estimated useful lives correspond to those of comparable purchased assets. Operating leases The Group applied the fair value option for the first time for financial year 2006. Under this option, financial assets or financial liabilities may be measured at fair value through profit...

  • Page 157
    ... 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 of any impairment...

  • Page 158
    ... than for use in 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 5 and 50 years. The fair value is determined...

  • Page 159
    ... the federal government makes payments to the special pension fund under the terms of this guarantee, it cannot claim reimbursement from Deutsche Post AG. The benefit obligations for the Group's hourly workers and salaried employees relate primarily to pension obligations in Germany and significant...

  • Page 160
    ... assets and liabilities are calculated using the tax rates applicable in the individual countries at the balance sheet date or announced for the time when the deferred tax assets and liabilities are realised. The tax rate of 29.8 % applied to German Group companies comprises the corporation tax rate...

  • Page 161
    ... event that changes to current tax laws restrict the extent to which future tax benefits can be realised. Goodwill is regularly reported in the Group's balance sheet as a consequence of business combinations. When an acquisition is initially recognised in the consolidated financial statements, all...

  • Page 162
    ... Marketing, Press Services, Parcel Germany, Global Mail, Retail Outlets and the Pension Service. express The EXPRESS division offers international and domestic courier and express services to business and private customers. The division comprises the Express Europe, Express Americas, Express Asia...

  • Page 163
    ... Post AG's universal postal service obligation (nationwide retail outlet network, delivery every working day), and from its obligation to assume the compensation structure as the legal successor to Deutsche Bundespost, are allocated to the MAIL division. Segment assets are composed of non-current...

  • Page 164
    ... in the prior-year period, there was no revenue in financial year 2009 that was generated on the basis of barter transactions. Revenue was down year-on-year in all areas. This was due to the global recession and to our exit from the domestic US express business and exchange rate losses. The further...

  • Page 165
    ... from the domestic US express business led to a reduction in staff costs. Retirement benefit expenses include â,¬ 559 million (previous year: â,¬ 557 million) relating to contributions by Deutsche Post AG to Bundes-Pensions-Service für Post und Telekommunikation e.V. Further details can be found in...

  • Page 166
    ... operating expenses. mail express global forwarding, freight supply chain Corporate Center / Other Impairment losses 4 125 0 19 65 213 0 116 0 91 57 264 17 â,¬m Net income from associates 2008 2009 Net income from associates 2 28 Impairments of goodwill in the previous year related to DHL...

  • Page 167
    ...with IAS 12.15 (b) and IAS 12.24 (b), the Group did not recognise any deferred tax assets on these temporary differences, which relate mainly to property, plant and equipment as well as to provisions for pensions and other employee benefits. The remaining tempo- Deutsche Post DHL Annual Report 2009

  • Page 168
    ... to Deutsche Post AG shareholders. 25 Dividend per share The net profit of â,¬ 49 million attributable to minorities in financial year 2009 represented an increase of â,¬ 340 million year-onyear. The change is primarily due to the inclusion of the Deutsche Postbank Group as an equity-accounted...

  • Page 169
    ... 26.1 Overview Internally generated intangible assets Purchased Purchased brand names customer lists Other purchased intangible assets Advance payments and intangible assets under Goodwill development Total Cost Balance at 1 January 2008 Additions to consolidated group Additions Reclassi...

  • Page 170
    Consolidated Financial Statements Notes Balance sheet disclosures 153 26.2 Allocation of goodwill to cgu â,¬m 2008 2009 Total goodwill1) mail mail National mail International express global forwarding, freight dhl Global Forwarding dhl Freight Europe supply chain dhl Supply Chain Williams Lea 10...

  • Page 171
    ... ï¬,eet payments and and transport assets under equipment development Aircraft Total Cost Balance at 1 January 2008 Additions to consolidated group Additions Reclassifications Disposals Currency translation differences Balance at 31 December 2008 / 1 January 2009 Additions to consolidated group...

  • Page 172
    ... company remaining following the sale of the 22.9 % stake has been accounted for using the equity method. Since this also accounts for the largest portion of this balance sheet item, the following table only reports the assets, liabilities, income from banking transactions and net profit of Deutsche...

  • Page 173
    ... to non-current financial assets, and the accounts within the "loans and receivables" and "financial assets available for sale" categories were rearranged. The assets at fair value through profit or loss mainly consist of a put option related to the sale of the interest in Deutsche Postbank to...

  • Page 174
    ... expenses Deferred revenue Current tax receivables Income from cost absorption Creditors with debit balances Receivables from sales of assets Receivables from Group companies Receivables from employees Receivables from loss compensation (recourse claims) Receivables from cash-on-delivery Receivables...

  • Page 175
    ... accounts mainly relate to the following items: â,¬m 2008 Assets 2009 2008 Liabilities 2009 dhl Express France sas, France - Day Definite Domestic business dhl Express uk, uk - Day Definite Domestic business Deutsche Post ag - real estate dhl Supply Chain, Spain - buildings dhl Network Operations...

  • Page 176
    ... Current liabilities Total equity and liabilities 8 14 6 70 98 2 62 6 70 In addition, DHL Express UK sold its Day Definite Domestic business to Home Delivery Network (HDN), a British delivery and collection service. The sale was still subject to the cartel authorities' approval as at the balance...

  • Page 177
    ...December Number of shares 2008 2009 The equity ratio stood at 23.8 % in financial year 2009 (previous year: 23.8 % based on "Postbank at Equity"). Corporate capital is controlled by the net gearing ratio which is defined as net debt divided by the total of equity and net debt. The ratio in 2009 was...

  • Page 178
    ...â,¬ 4 million (previous year: â,¬ 9 million) relate to recognised losses from hedging transactions to acquire non-current non-financial assets. The losses were attributed to the cost of the assets. Deferred taxes on fair values also affected the hedging reserve. Deutsche Post DHL Annual Report 2009

  • Page 179
    ... shareholders in the consolidated equity from acquisition accounting, as well as their interests in profit or loss. The interests relate primarily to the following companies: â,¬m 2008 2009 43 Minority interest 41 Retained earnings Deutsche Postbank Group dhl Sinotrans International Air Courier...

  • Page 180
    Consolidated Financial Statements Notes Balance sheet disclosures 163 44.1 Pension provisions and other employee benefits by area â,¬m Germany uk Other Deutsche Postbank Group Total 31 December 2009 Provisions for pensions and other employee benefits Pension assets Net pension provisions 31 ...

  • Page 181
    ... of the present value of the obligation, the fair value of plan assets and the pension provision â,¬m Germany uk Other Deutsche Postbank Group Total 2009 Present value of defined benefit obligations at 31 December for wholly or partly funded benefits Present value of defined bene...

  • Page 182
    Consolidated Financial Statements Notes Balance sheet disclosures 165 44.5 Changes in the present value of total defined benefit obligations â,¬m Germany uk Other Deutsche Postbank Group Total 2009 Present value of defined benefit obligations at 1 January Current service cost, excluding ...

  • Page 183
    166 44.6 Changes in the fair value of plan assets â,¬m Germany uk Other Deutsche Postbank Group Total 2009 Fair value of plan assets at 1 January Employer contributions Employee contributions Expected return on plan assets Gains (+) / losses (-) on plan assets Benefit payments Transfers ...

  • Page 184
    ... 593 million of total actuarial gains on defined benefit obligations. 44.9 Changes in net pension provisions â,¬m Germany uk Other Deutsche Postbank Group Total 2009 Net pension provisions at 1 January Pension expense Benefit payments Employer contributions Employee contributions Acquisitions...

  • Page 185
    ... Germany uk Other Deutsche Postbank Group Total 2009 Current service cost, excluding employee contributions Interest cost Expected return on plan assets Recognised past service cost Recognised actuarial gains (-) / losses (+) Effects of curtailments Effects of settlements Effects of asset limit...

  • Page 186
    ... still unused by customers, and is based on studies by market research companies. It is measured at the nominal value of the stamps issued. 45.2 Miscellaneous provisions â,¬m 2008 2009 Tax provisions Litigation costs Risks from business activities Postal Civil Service Health Insurance Fund Welfare...

  • Page 187
    ...Terms and conditions Carrying amount 2008 â,¬m Carrying amount 2009 â,¬m Bank Interest rate End of term Deutsche Post International b. v., Netherlands Deutsche Post International b. v., Netherlands Deutsche Post International b. v., Netherlands Deutsche Post ag, Germany Deutsche Post ag, Germany...

  • Page 188
    ... End of term Asset 2008 2009 dhl Aviation (Netherlands) b. v., Netherlands Deutsche Post Immobilien GmbH, Germany dhl Express (us) Inc., usa scm Supply Chain Management Inc., Canada Barclays Mercantile Business Financing Limited, London Lorac Investment Management sarl Wachovia Financial Services...

  • Page 189
    ... liabilities 1 Jan. 2008 adjusted1) 2008 adjusted1) 2009 Tax liabilities Incentive bonuses Compensated absences Payable to employees and members of executive bodies Liabilities from the sale of residential building loans, of which non-current: 281 (2008: 113; 1 January 2008: 106) Deferred income...

  • Page 190
    ... European and Asian air hubs. On balance, the change in current financial assets resulted in cash outflows of â,¬ 659 million. Cash was received from the sale of Deutsche Bank shares which was invested on the capital market. Cash paid for investments in subsidiaries and other business units dropped...

  • Page 191
    ...as against 2008, whereas cash used for changes in current financial liabilities in the amount of â,¬ 548 million clearly exceeded the previous year's amount by â,¬ 211 million. The dividend payment to shareholders (â,¬ 725 million) accounts for the largest share of cash paid for financing activities...

  • Page 192
    ...The non-current liabilities "2 to 3 years" include the mandatory exchangeable bond (zero bond) of â,¬ 2,568 million plus interest in financial year 2009. It was issued in February 2009 and fully subscribed to by Deutsche Bank, see Note 3. The settlement of the liability does not result in cash flows...

  • Page 193
    ... hedged as at 31 December 2009. The fair value of currency forwards was measured on the basis of discounted future cash flows, taking forward rates on the foreign exchange market into account. The currency options were measured using the Black & Scholes option pricing model. Of the unrealised gains...

  • Page 194
    ... the share of instruments with short-term interest lock-ins in the course of 2009. The proportion between notional volumes of instruments with short-term and with long-term interest rate lock-ins remained largely well balanced. The effect of interest rate changes on the Group's financial position...

  • Page 195
    ...equity by â,¬ 30 million (previous year: â,¬ 38 million). Market price risk As part of the "Amendment Agreement Regarding the Acquisition of Shares in Deutsche Postbank AG", Deutsche Post AG acquired derivative financial instruments relating to the transfer of Postbank shares. These are conditional...

  • Page 196
    ... "Financial assets recognised at fair value through profit or loss". From that point of time, fair value changes in the shares and options are offset in net finance costs / net financial income. Credit risk The credit risk incurred by the Group is the risk that counterparties fail to meet their...

  • Page 197
    ... in 2008 for internal financing and investments were extended in 2009. As only the net positions were extended, the notional volume of the corresponding currency-related hedging transactions significantly dropped against 31 December 2008. The put and call options on the shares of Deutsche Postbank...

  • Page 198
    ... of diesel and marine diesel fuels, which cannot be passed on to customers, were hedged using commodity swaps. The fair value of these cash flow hedges amounted to â,¬ 1 million as at year-end (previous year: â,¬ 0 million). There were minor inefficiencies. Deutsche Post DHL Annual Report 2009

  • Page 199
    ... balance sheet as at 31 December 2009 â,¬m Carrying amount Carrying amount measured in accordance with IAS 39 Financial assets and liabilities recognised at fair value through profit or loss Trading Fair value option Available-for-sale financial assets assets Non-current financial assets at cost...

  • Page 200
    Consolidated Financial Statements Notes Other disclosures 183 Other financial instruments outside the scope of IAS 39 Loans and receivables / Other financial liabilities Held-to-maturity assets... 0 0 -28 0 0 0 0 -269 -6,841 -84 0 -281 0 -683 -57 -4,861 -236 0 - Deutsche Post DHL Annual Report 2009

  • Page 201
    ... value nor at amortised cost. 2) Prior-period amount adjusted: in 2008, â,¬61 million were recognised under non-current financial assets. The asset related to investments in associates. Recognised in a separate balance sheet account in these financial statements. Deutsche Post DHL Annual Report...

  • Page 202
    Consolidated Financial Statements Notes Other disclosures 185 Other financial instruments outside the scope of IAS 39 Loans and receivables / Other financial liabilities Held-to-maturity assets...32 0 0 0 0 - 531 -3,293 -103 0 -116 0 - 873 - 549 - 5,016 -355 0 - Deutsche Post DHL Annual Report 2009

  • Page 203
    ... liabilities generally have short maturities; the amounts carried in the balance sheet are similar to their fair values. Available-for-sale financial assets include shares in partnerships and corporations in the amount of â,¬ 97 million (previous year â,¬ 158 million). There is no active market for...

  • Page 204
    ...US express business (previous year: â,¬ 404 million). The increase in the aircraft item is mainly due to the fleet expansion at AeroLogic GmbH. In the previous year, â,¬ 139 million of the leasing obligations related to the Deutsche Postbank Group. Maturity structure of lease payments â,¬m 2008 2009...

  • Page 205
    ... the company was thereby granted state aid incompatible with EU law. According to the decision opening the investigation, the Commission intends to examine all public transfers, public guarantees, statutorily granted exclusive rights, the price regulation of letter services and the public funding...

  • Page 206
    ...shares equals the stock price of Deutsche Post AG as at the grant date (â,¬ 11.48). For the grant of variable remuneration portions, â,¬ 5 million were recognised in equity in the consolidated financial statements as at 31 December 2009. In 2010, this system will be applied to other Group executives...

  • Page 207
    ...Deutsche Post shares and the fixed issue price, if demanding performance targets were met. Long-Term Incentive Plan (2006 ltip) for members of the Board of Management before the end of the lock-up period. The average (closing) price is calculated as the average closing price of Deutsche Post shares...

  • Page 208
    ...a solid majority in the Annual General Meeting due to its average presence there, a dependent relationship exists between Deutsche Telekom and the federal government. Therefore, Deutsche Telekom is a related party to Deutsche Post AG. In financial year 2009, the Group provided goods and services for...

  • Page 209
    ... in the consolidated financial statements: â,¬m 2008 2009 Short-term employee benefits (less share-based remuneration) Post-employment benefits Termination benefits Share-based remuneration Total 13 2 0 1 16 16 2 4 2 24 The post-employment benefits are recognised as the service cost resulting...

  • Page 210
    Consolidated Financial Statements Notes Other disclosures 193 The share-based remuneration amount relates to the sharebased remuneration expense recognised in financial years 2008 and 2009. It is itemised in the following table: Share-based remuneration thousands of â,¬ Stock options 2008 SAR ...

  • Page 211
    ... and the Supervisory Board can be found in the Corporate Governance Report. The Remuneration Report contained in the Corporate Governance Report also forms part of the Group management report. Shareholdings of the Board of Management and Supervisory Board The remuneration of former members of the...

  • Page 212
    ... Print Solutions GmbH Declaration of Conformity with the German Corporate Governance Code 58 On 7 December 2009, the Board of Management and the Supervisory Board of Deutsche Post AG together submitted the Declaration of Conformity with the German Corporate Governance Code for financial year 2009...

  • Page 213
    196 61 Name List of shareholdings Affiliated companies included in the consolidated financial statements Headquarters Group equity share % Currency Equity thousands Net income thousands Europe abis GmbH Aerocar b. v. Albert Scheid GmbH Applied Distribution Group Ltd. asg uk Ltd.5) Axial s. a.5)...

  • Page 214
    ... the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Deutsche Post Finance b. v. Deutsche Post Fleet GmbH Deutsche Post Global Mail (Belgium) n. v. Deutsche Post Global Mail (France) sas Deutsche Post Global Mail (Netherlands...

  • Page 215
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Express (Denmark) a / s dhl Express (France) sas dhl Express (Hellas) s. a. dhl Express (Hungary) Ltd. dhl Express (Iceland) ehf dhl Express...

  • Page 216
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Freight (Netherlands) b. v. dhl Freight and Contract Logistics (uk) Ltd. dhl Freight Finland Oy dhl Freight Germany Holding GmbH dhl Freight...

  • Page 217
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Logistics (Hungary) Ltd. dhl Logistics (Schweiz) ag dhl Logistics (Slovakia) spol. s r. o. dhl Logistics (Ukraine) Ltd.1) dp Air Cargo Service...

  • Page 218
    ... Freight Management (Ireland) Ltd.5) Exel Freight Management (uk) Ltd. Exel Freight sas Exel Frigoliner GmbH Exel Gallieni Exel Gironde s. a. Exel Group Holdings (Nederland) b. v. Exel Head Office Services Ltd. Exel Healthcare (Belgium) n. v. Exel Holdings Ltd. Exel Insurance Ltd. Exel International...

  • Page 219
    ... in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands f. x. Coughlin b. v. fact Denmark a / s Fashion Logistics Ltd. First Mail Düsseldorf GmbH Formation e-Document Solutions Ltd. Freight Indemnity and Guarantee Company Ltd...

  • Page 220
    ... financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Ocean Transport & Trading Ltd. Orbital Secretaries Ltd.5) Outrack Credit (uk) Ltd.5) Packaging Datastore Ltd. Packaging Management Group Ltd. Performance International n. v. Pharma Logistics...

  • Page 221
    ...in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Werbeagentur Janssen GmbH Williams Lea Belgium b. v. b. a. Williams Lea Czech Republic, s. r. o. Williams Lea Deutschland GmbH Williams Lea Direct Marketing Solutions GmbH...

  • Page 222
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Co Manufacturing Packing sc México dhl Corporate Services sc México dhl Customer Support (Costa Rica) s. a. dhl Customs (Costa Rica) s. a. dhl...

  • Page 223
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl of Curacao n. v. dhl Panama s. a. dhl Regional Logistics sc México dhl Regional Services Inc. dhl Solutions (usa), Inc. dhl Specialized Services...

  • Page 224
    ... (India) Pvt Ltd. danzas Intercontinental Inc. Danzas Pty. Ltd. Danzas Zhong Fu Freight Agency Co. Ltd. danzasmal Domestic Logistics Services Sdn. Bhd. Deutsche Post Global Mail (Australia) Pty. Ltd. dhl (Chengdu) Service Ltd. dhl Air Freight Forwarder Sdn. Bhd. dhl Asia Pacific Shared Services Sdn...

  • Page 225
    ... Affiliated companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Exel Supply Chain Phils., Inc. dhl Express (Australia) Pty. Ltd. dhl Express (Brunei) Sdn. Bhd. dhl Express (Cambodia) Ltd. dhl Express...

  • Page 226
    ...statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Sinotrans International Air Courier Ltd. dhl Supply Chain (Australia) Pty. Ltd. dhl Supply Chain (Hong Kong) Ltd. dhl Supply Chain (Malaysia) Sdn. Bhd. dhl Supply Chain (New Zealand) Ltd. dhl Supply...

  • Page 227
    210 Affiliated companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Air Freight Forwarder (Egypt) wll dhl Aviation (Nigeria) Ltd. dhl Aviation Pte. Ltd. dhl Aviation Pty. Ltd. dhl Aviation Kenya Ltd. ...

  • Page 228
    ...s. a. dhl Logistics ooo dhl Mozambique Lda. dhl Operations bv Jordan Services with Limited Liability dhl Qatar Ltd. dhl Regional Services (Indian Ocean) Ltd. dhl Regional Services Ltd. dhl Supply Chain (South Africa) Pty. Ltd. dhl Swaziland Pty. Ltd. dhl Worldwide Express & Company llc dhl Worldwide...

  • Page 229
    ... companies not included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Europe 4c Trademark Management Ltd.5) 4cx Hellas s. a.4) 4cx Import and Export s. a.4) Airborne Express (Netherlands) b. v.4) Airborne Express...

  • Page 230
    ... companies not included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands International Garment Services Ltd.5) it4logistics ag2) kxc (exel) gp investment ltd.4) kxc (exel) lp investment ltd.4) Letteralter Ltd.4) Mail...

  • Page 231
    ... Radix Group International Inc.4) Safe Way Argentina s. a.4) sf Capital Corp.2), 3) sia dhl Express Colombia Ltda.4) Skyhawk Transport Ltd.4) Southlake Financial Services l. p.4) Spectrum Supply Chain Services Inc.4) Spectrum Supply Chain Services Partnership l.p.2), 3) sscs Inc.4) Summit Logistics...

  • Page 232
    ... disclosures 215 Affiliated companies not included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Asia Pacific Concorde Air Logistics Ltd. dhl China Ltd. dhl Customs Brokerage Corp. Exel Logistics Delbros Philippines...

  • Page 233
    ... (quota consolidation) Name Headquarters Group equity share % Currency Equity thousands Net income thousands Europe AeroLogic GmbH Exel Delamode Logistic SrL. Americas ec Logistica s. a. ev Logistics Innogistics llc LifeConEx llc Asia Pacific Parcel Direct Group Pty. Ltd.1) Couriers Please Pty...

  • Page 234
    Consolidated Financial Statements Notes Other disclosures 217 Associated companies (accounting treatment in the consolidated financial statements following the equity method) Name Headquarters Group equity share % Currency Equity thousands Net income thousands pb Firmenkunden ag8) pb Spezial-...

  • Page 235
    ... / Main Poland, Lodz Germany, Essen Germany, Gruenwald 50.00 50.00 50.00 50.00 eur 0 - - - 0 - - - Non-consolidated associated companies Name Headquarters Group equity share % Currency Equity thousands Net income thousands Europe Airmail Center Frankfurt GmbH4) Automotive Logistics (uk) Ltd...

  • Page 236
    ..., the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together...

  • Page 237
    ...by Deutsche Post AG, Bonn, comprising the income statement and the statement of comprehensive income, the balance sheet, the cash flow statement, the statement of changes in equity and the notes to the consolidated financial statements, together with the group management report for the business year...

  • Page 238
    ... advance themselves and broaden their skills. They learn to act responsibly, to develop themselves and improve their chances of getting a job. We are committed to a number of initiatives at schools, universities and to vocational training. As founding partner of Teach First Deutschland, for instance...

  • Page 239
    INDEX 223 223 GLOSSARY 224 224 GRAPHS AND TABLES 225 225 CONTACTS 226 226 MULTI-YEAR REVIEW IV IV EVENTS VI VI

  • Page 240
    ... 149, 151, 153 Working capital 27, 31, 41, 52, 60, 65, 70, 173 T Trade volumes 22 f. Training 73 S Segment reporting 130, 145 f. Share capital 17 ff., 160, 194 Share price 29 f. Shareholder structure 30 Staff costs 34, 71, 125, 137, 141, 148 Strategy 2015 25 f., 81, 101 Supervisory Board 17 ff., 101...

  • Page 241
    .... Day Definite Delivery of shipments on a specified day. dhl Solutions & Innovations New unit that brings together the Group's existing innovation drivers - including the dhl Innovation Centre - develops innovative solutions and promotes cross-divisional co-operation. Dialogue marketing Market...

  • Page 242
    ...45 Business and environment a.01 Organisational structure of Deutsche Post DHL 15 a.02 Group structure from different perspectives a.03 Global economy: growth indicators for 2009 a.04 Brent Crude spot price and euro / us dollar exchange rate, 2009 a.05 Trade volumes: compound annual growth rate 2008...

  • Page 243
    ... Ordering a copy of the Annual Report External e-mail: ir @ deutschepost.de Online: dp-dhl.com/en/investors.hml Internal GeT and dhl Webshop Mat. no. 675-601-522 Published on 16 March 2010 English translation Deutsche Post Corporate Language Services et al. The English version of the Annual Report...

  • Page 244
    ...adjusted 2008 adjusted 2009 Revenue mail express logistics global forwarding, freight supply chain financial services services Divisions total Corporate Center/ Other (until 2004: Other / Consolidation; until 2006: Consolidation; until 2007: Corporate Center / Other and Consolidation) Consolidation...

  • Page 245
    ... at equity)12) Key stock data (Diluted) earnings per share13) Cash ï¬,ow per share13), 14) Dividend distribution Payout ratio (distribution to consolidated net profit) Dividend per share Dividend yield (based on year-end closing price) (Diluted) price / earnings ratio16) Number of shares carrying...

  • Page 246
    ... Business Services Conference (London) Deutsche Bank Industrials Conference (Chicago) ubs Transport Conference (London) Sanford C. Bernstein's Strategic Decisions Conference (London) Nordea Markets's Transport Seminar (Copenhagen) Goldman Sachs Shipping & Freight Forwarding Symposium (London) dp-dhl...

  • Page 247
    Deutsche Post ag Headquarters Investor Relations 53250 Bonn Germany www.dp-dhl.com