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ANNUAL REPORT
2010

Table of contents

  • Page 1
    ANNUAL REPORT 2010

  • Page 2
    ...Post and 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...

  • Page 3
    ... EXPRESS GLOBAL FORWARDING, FREIGHT SUPPLY CHAIN BEING YOUR CHOICE Our Strategy 2015 has gained a foothold and we are on course to becoming the provider, investment and employer of choice. In all of our divisions, we offer customers services that make their lives easier and have lasting value...

  • Page 4
    ... Labour Management hr mail Divisions Board department Board member Brand Business units / regions mail Jürgen Gerdes Deutsche Post Mail Communication Dialogue Marketing Press Services Value-Added Services Retail Outlets Pension Service dhl Global Mail Parcel Germany express Ken Allen dhl Europe...

  • Page 5
    ...dhl divisions: â,¬ 1.6 billion to â,¬ 1.7 billion. Corporate Center / Other: approximately â,¬ - 0.4 billion. Consolidated net profit Continue to improve net profit before effects from the measurement of the Postbank instruments, in line with operating business. Capital expenditure (capex) Increase...

  • Page 6
    CONTENTS A B C D GROUP MANAGEMENT REPORT 19 CORPORATE GOVERNANCE 111 CONSOLIDATED FINANCIAL STATEMENTS 137 FURTHER INFORMATION 229 Detailed table of contents

  • Page 7
    ...Mandates held by the Board of Management Mandates held by the Supervisory Board Corporate Governance Report 111 113 117 118 122 123 124 CONSOLIDATED FINANCIAL STATEMENTS Income Statement Statement of Comprehensive Income Balance Sheet Cash Flow Statement Statement of Changes in Equity Notes to the...

  • Page 8

  • Page 9
    4 p. 6 pe d a p. h s re s r e e d tu r bor fu en d he t c s , ra n 8 tio n p. t t 0 ica th a un p. 1 m lu e s a m n v o o ia l i c t t s l u n e i l at so o te Ma c re s p ic s ist o ck ha t l g t o n L y t u ilit th a ia b nt ice Rel e m ch o lop e y v m De e Th y pan com of

  • Page 10

  • Page 11
    ... of choice MAIL COMMUNICATION, THE FUTURE RESHAPED The 66 million mail items delivered each working day in Germany make Deutsche Post the largest postal company in Europe. Every day, we win over customers with reliable quality, a formidable network, decades of experience and proximity. Innovative...

  • Page 12
    ... online to the insurance company. The benefit: By using e-Postbrief, the insurance company can be absolutely certain of the customer's identity. Both parties save time and benefit from simplified handling processes. Even consumers use the e-Postbrief product to send documents quickly, securely...

  • Page 13
    5

  • Page 14
    6

  • Page 15
    ... choice LOGISTICS SOLUTIONS THAT TRANSCEND BORDERS As the world's leading logistics company, dhl streamlines complex processes, making our customers' lives easier. We're the world's largest provider of air freight and the number two in ocean freight and we work to ensure that all kinds of shipments...

  • Page 16
    ... ocean and air freight is developed using dhl seair, which offers lower transport costs with faster transit times. The benefit: Importers gain a considerable competitive edge with this reliable and cost-effective solution and reduce co emissions compared with pure air transport. Business customers...

  • Page 17
    7

  • Page 18
    8

  • Page 19
    ...our efficiency over the past few years. We are now setting our sights on organic growth in revenue and earnings. We have optimised our business portfolio and placed the changing needs of our customers more at the centre of our business. We are also helping the different areas in the Group meet their...

  • Page 20
    ... investment to investors that offers solid potential return. The solution: The company streamlined its portfolio, set clear strategic goals and developed a new finance strategy. One of Deutsche Post DHL's goals is to pay dividends equal to 40 % to 60 % of net profits. The benefit: Investors...

  • Page 21
    9

  • Page 22

  • Page 23
    ..., Deutsche Post DHL is one of the largest employers in the world. Qualified and dedicated employees are essential to long-term success. Our People Strategy therefore aims to position the Group as the employer of choice. To achieve this goal, we invest in training and professional development, make...

  • Page 24
    ... studying business administration would like to work for a diverse, international company upon graduation. The solution: She applies to participate in the Group's graduate trainee programme for potential future leaders at Deutsche Post DHL. The benefit: Young people are given responsibility and...

  • Page 25
    11

  • Page 26
    12 DR FRANK APPEL Chief Executive Officer

  • Page 27
    Letter to our Shareholders 13 1 March 2011 Financial year 2010

  • Page 28

  • Page 29
    ... Annual General Meeting an increase in the dividend to â,¬ 0.65 per share. I'd like to sincerely thank our around 470,000 employees, who received a special bonus at the end of the year in appreciation for their service. 1 /2 Deutsche Post DHL The Mail & Logistics Group PO box address Deutsche Post...

  • Page 30

  • Page 31
    ... a secure, confidential and reliable form of electronic communication onto the market. At DHL, we are getting better and better at developing integrated solutions for regions, industries and customer groups. The results of our annual employee opinion survey indicate that we have made great progress...

  • Page 32

  • Page 33
    A Group Management Report GROUP MANAGEMENT REPORT A e-Postbrief Airmail letter Registered letter Deutsche Post YOUR CHOICE. BECAUSE PERSONAL TRUST IS NUMBER ONE. Deutsche Post delivers 66 million mail items each day, six days a week, making us number one in the German mail market. One reason ...

  • Page 34
    ... Customers and quality Brands 70 70 75 79 82 82 85 FURTHER DEVELOPMENTS Report on post-balance sheet date events 87 87 OUTLOOK Overall assessment of expected performance Opportunities and risks Strategic focus Future economic parameters Revenue and earnings forecast Projected financial position...

  • Page 35
    ... The world's leading mail and logistics group Deutsche Post DHL maintains a global network that offers our customers everything they need for transporting, storing and processing goods and information, from standard products to customised solutions. We place great value on service, quality and...

  • Page 36
    ... Post DHL Corporate Center (ceo's board department, Finance and Personnel) global forwarding, freight • Global Forwarding • Freight mail Mail Communication Dialogue Marketing Press Services Value-Added Services Parcel Germany Retail Outlets Global Mail Pension Service express Europe...

  • Page 37
    ...2010, 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 38
    ...back of shares The Board of Management is authorised, subject to the approval of the Supervisory Board, to issue up to 240 million new, no-par value registered shares by or before 20 April 2014 in exchange for cash and/or non-cash contributions and thereby increase the company's share capital by up...

  • Page 39
    ... or shareholdings in companies. To date, the Board of Management has not made use of this authorisation. On 25 May 2011, the Board of Management and the Supervisory Board will make a proposal to the Annual General Meeting of Deutsche Post AG to adopt a new authorisation to issue bonds with warrants...

  • Page 40
    ...are conditional upon a change of control following a takeover bid and agreements with members of the Board of Management or employees providing for compensation in the event of a change of control Corporate Governance, page 128 f. Deutsche Post AG took out a syndicated credit line with a volume of...

  • Page 41
    ... China Japan usa Euro zone Germany Some figures are estimates, as at 15 February 2011. Source: Postbank Research, national statistics. 10.3 4.0 2.9 1.7 3.6 31.3 24.2 11.7 9.9 14.2 n/a 2.1 3.2 1.7 2.6 Asia led the global recovery in the reporting year, although the growth rate (approximately...

  • Page 42
    ...from which Germany profited greatly, and by the vast structural problems and high national debt that some countries faced. This situation led to massive cuts in public spending and tax increases, which had a further impact on growth. The German economy grew robustly in the reporting year, especially...

  • Page 43
    ...trade up sharply The global economic upswing had a positive impact on international trade in the reporting year. Global trade volumes, for instance, were up roughly 9 %. The upwards trend was seen particularly in exports coming out of Europe, Latin America and North America. The Asia Pacific region...

  • Page 44
    ... Domestic mail market usa (2010): â,¬ 43.5 bn 7) • International express market (2009): â,¬ 4.0 bn 8) 1) Company estimates. 2) Data based solely on export freight tonnes. Source: includes content provided by copyright © Global Insight (Deutschland) GmbH, 2010. All rights reserved, annual reports...

  • Page 45
    ... market position, a large number of our services are subject to sector-specific regulation under the Postgesetz (German postal act). Further information on this issue and legal risk is contained in the Notes to the consolidated financial statements. Note 53 Deutsche Post DHL Annual Report 2010

  • Page 46
    ..., or asset charge, from reported EBIT. By including the cost of capital in our business decisions, we encourage all divisions to use resources efficiently and organise our operating business to sustainably increase value and generate cash flow. In the reporting year, EAC served as a key performance...

  • Page 47
    ...a different trend in the level of the asset base during the reporting years. The net asset base was reduced in 2009, ending the year at a particularly low level. However, the average asset base was higher. An increase in net working capital was the primary reason for the year-on-year rise in the net...

  • Page 48
    ... improved by 11.0 %. a.12 Deutsche Post shares: multi-year review 2004 2005 2006 2007 2008 2009 2010 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...

  • Page 49
    ... nearly being reached at times. After our Capital Markets Day on 23 November, however, Deutsche Post shares declined to their year-end closing price of â,¬ 12.70 as the DAX continued to rise. Hence, over the year as a whole, our shares lost 5.9 % in value. Average trading volumes remained stable at...

  • Page 50
    ... Board of Management members and our investor relations team cultivated close contact with the capital markets at numerous individual meetings and investor conferences. Our work in the field was ranked the third-best in Europe by Institutional Investor magazine. Deutsche Post DHL Annual Report 2010

  • Page 51
    ...assessment by the Board of Management As a globally operating logistics provider, Deutsche Post DHL benefited from the recovery in the global economy in financial year 2010, recording impressive volume and revenue increases. The savings generated in the previous year improved profitability in almost...

  • Page 52
    ...% of Postbank's shares for Deutsche Bank has been recognised in profit and loss and included at its fair value in net financial income since 1 January 2010. Increase in consolidated revenue from continuing operations Consolidated revenue from continuing operations rose 11.4 % year-on-year to â,¬ 51...

  • Page 53
    ... Meeting on 25 May 2011, the Board of Management and the Supervisory Board will make a proposal to the shareholders to pay a dividend per share of â,¬ 0.65 for financial year 2010 (previous year: â,¬ 0.60). The distribution ratio based on the consolidated net profit attributable to Deutsche Post...

  • Page 54
    ... investing in the operating business. We shall also use liquidity to fund a portion of our pension liabilities. Once this has been achieved, we would aim to improve our rating to "A-" before using liquidity for additional dividend payments or share repurchases. Deutsche Post DHL Annual Report 2010

  • Page 55
    ... and strategic ï¬,exibility. • Assure low costs of capital (wacc )1). 1. Invest in the operating business. 2. Increase plan assets for German pension plans. 3. Aim for credit ratings of "a-" and "a3", respectively. 4. Pay out special dividend or execute share buy-back programme. Debt portfolio...

  • Page 56
    ...funds is net cash from operating activities. During the reporting year, the average drawdown on the Group's committed, unsecured, bilateral credit lines was only around 7 %; the total volume amounted to an annual average of â,¬ 2.7 billion. As part of our finance strategy, in December 2010 we agreed...

  • Page 57
    ... Long-term: Baa1 Short-term: p - 2 Outlook: stable Rating factors 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...

  • Page 58
    ...the reporting date, these short-term money market investments had a volume of â,¬ 1.9 billion. Cash and cash equivalents are supplemented by investment funds of â,¬ 0.4 billion that are callable at sight and are reported as current financial assets in the balance sheet. The share of investment funds...

  • Page 59
    ...Management Report Economic Position Financial position 45 Capital expenditure lower than expected a.26 Investments by region â,¬m Germany 733 635 Americas 210 123 Europe (excluding Germany) 174 300 Asia Pacific 94 78 Other regions 51 35 2010 2009 The Group's capital expenditure (capex) totalled...

  • Page 60
    ... this amount, â,¬ 198 million related to the Supply Chain business, â,¬ 15 million to Williams Lea and â,¬ 2 million to central entities. Investments were stepped up in the second half of the year and related mainly to new business activities in the Americas and Asia Pacific regions. Roughly 65 % of...

  • Page 61
    ...ow statement for continuing operations a.29 Operating cash ï¬,ow by division, 2010 â,¬m mail 1,044 express 904 global forwarding, freight 244 supply chain 272 Net cash from operating activities rose by â,¬ 683 million year-on-year in financial year 2010 to â,¬ 1,927 million. This increase is mainly...

  • Page 62
    ... of current financial assets increased it. In contrast, assets held for sale decreased by â,¬ 66 million to â,¬ 113 million following the completion of the sale of the DHL Express day-definite domestic businesses in the UK and France. Equity attributable to Deutsche Post AG shareholders increased by...

  • Page 63
    ... The dynamic gearing ratio is an indicator of internal financing capacity and expresses the average number of years required to pay off outstanding debt using the cash flow generated from operating activities in the year under review. However, as we have net liquidity, the informative value of these...

  • Page 64
    ... Marketing Press Services Value-Added Services Parcel Germany Retail Outlets 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...

  • Page 65
    ... Payment processes Mailroom services Printing services Document management BUSINESS UNITS AND MARKET POSITIONS The postal service for Germany a.34 Domestic mail communication market, 2010 Market volume: â,¬ 6.0 billion 13.4 % Competition Deutsche Post DHL is Europe's largest postal company...

  • Page 66
    ... 1 July 2010, we transferred significant parts of Williams Lea Germany from the SUPPLY CHAIN division to the MAIL division. We now report on those parts as the new Value-Added Services business unit. This business involves the components of the mail communications value chain that our customers have...

  • Page 67
    ... share in 2010 remained at the prior-year level. Sending mail and small packages internationally 39.0 % dhl 61.0 % Competition Source: company estimate. We carry mail across borders and offer international dialogue marketing services. We also serve business customers in key domestic mail markets...

  • Page 68
    ... of Williams Lea Germany from the SUPPLY CHAIN division to the MAIL division. We now report on those parts as the new Value-Added Services business unit. The previous year's segment reporting figures were adjusted accordingly. Revenue in 2010, which had 1.3 additional working days, was â,¬ 13,821...

  • Page 69
    ... prior-year level. Value-added services generate more revenue Revenue in the new Value-Added Services business unit reached â,¬ 339 million, exceeding the previous year's figure of â,¬ 328 million by 3.4 %. Growth in our document management and mailroom services was the main reason for the increase...

  • Page 70
    ... DHL Global Mail Services SAS in 2009 and lower volumes in the unaddressed mail business in the Netherlands. a.42 Mail International: volumes mail items (millions) 2009 2010 +/- % Q4 2009 Q4 2010 +/- % Global Mail 6,654 6,005 - 9.8 1,705 1,497 -12.2 Earnings affected by value added tax...

  • Page 71
    ... dhl Day Definite Regions Europe Americas Asia Pacific eemea (Eastern Europe, the Middle East and Africa) Network 220 countries and territories 3 main global hubs 32,300 Service Points 2.8 million customers 62,000 vehicles BUSINESS UNITS AND MARKET POSITIONS Network for time-definite shipments...

  • Page 72
    ...delivery to customers in Europe and the United States, respectively. Well positioned in the global express business DHL has enjoyed a strong global positioning in the international express business for many years and is the international express market leader in all regions outside of North America...

  • Page 73
    ...most reliable and fastest international express service provider in China, a key market in Asia Pacific. Furthermore, our global leadership team co-operates closely with experienced local managers. For instance, Board of Management member Ken Allen was elected to the board of management of the joint...

  • Page 74
    ...-year quarter. Per-day shipment volumes for the TDI product line increased by 6.4 %. Revenue and volumes in our DDD product line declined, mainly due to the sale of our day-definite domestic businesses in the UK and France. a.47 express: revenue by product â,¬ m per day Time Definite International...

  • Page 75
    ...%. The increase resulted from significantly higher shipment volumes across all product lines and higher fuel surcharge revenues. Business in the eemea region improved steadily Business in the EEMEA region (Eastern Europe, the Middle East and Africa) continued to improve in 2010, with revenue growth...

  • Page 76
    ... MARKET POSITIONS Customised global transport solutions With its Global Forwarding and Freight business units, DHL is the world's leader in air and ocean freight services and one of the leading overland freight forwarders in Europe, the Middle East and North Africa. We develop customised transport...

  • Page 77
    ... dsv REVENUE AND EARNINGS PERFORMANCE 2.3 % dhl Revenue and earnings improve considerably in freight forwarding business The GLOBAL FORWARDING, FREIGHT division increased revenue in the reporting year by 27.6 % to â,¬ 14,341 million (previous year: â,¬ 11,243 million). The total includes positive...

  • Page 78
    ... revenue increased particularly in our growth markets of South America, North Asia and the Middle East as well as Central Europe. Air freight revenue in the reporting year was up 37.3 % on the prior year. a.52 Global Forwarding: revenue â,¬m Air freight Ocean freight Other Total 2009 adjusted 2010...

  • Page 79
    ... reporting year after having felt the impact of the restructuring costs in 2009, thanks to a marked increase in overall productivity and the successful turnaround of loss-making national companies. On 1 January 2010, the EXPRESS division transferred responsibility for the domestic freight business...

  • Page 80
    ... distribution, managed transport and value-added services, business process outsourcing, supply chain management and consulting as well as lead logistics provider solutions. We ensure that our customers' products and information reach their markets quickly and efficiently, thus securing them crucial...

  • Page 81
    Group Management Report Divisions supply hain division 67 Customers in the Technology sector require fast, flexible and efficient supply chains. Demand for integrated product and service logistics is increasing. Our portfolio ranges from inbound-to-manufacturing services and warehouse and ...

  • Page 82
    ... region, 2010 Total revenue: â,¬ 13,301 million 8 % Asia Pacific 29 % Americas 63 % Europe / Middle East / Africa SUPPLY CHAIN division to the MAIL division. The prior-year segment reporting figures were adjusted accordingly. Revenue and earnings in the SUPPLY CHAIN division developed positively...

  • Page 83
    ... end-of-year bonus. Operating cash flow decreased to â,¬ 272 million in the reporting year (previous year: â,¬ 424 million) due to the restructuring measures introduced in 2009. We maintained our efficient working capital position as revenue continued to rise. Deutsche Post DHL Annual Report 2010

  • Page 84
    ...57 Number of employees (continuing operations) 2009 2010 +/- % At year-end Headcount 1) Full-time equivalents 2) of which mail3) express 3) global forwarding, freight 3) supply chain 3) Corporate Center / Other of which Germany Europe (excluding Germany) Americas Asia Pacific Other regions Average...

  • Page 85
    ... domestic day-definite express business in the UK and France. Staff levels in the Americas, Asia Pacific and the other regions, however, have grown. Our current planning calls for maintaining the total number of employees at the current level in financial year 2011. On our way to employer of choice...

  • Page 86
    ... and safety organisation's quality management system yet again in the reporting year. a.60 Occupational safety1) 2009 20104) Number of workplace accidents 2) 13,014 71 3) 17,283 96 376,873 21.8 0 Accident rate (number of accidents per 1,000 employees per year) Number of working days lost due...

  • Page 87
    ... Betriebslenkerprogramm in the reporting year. Based on systematic succession planning, 156 employees will receive career development guidance and support as they move from mail carrier to management positions. The EXPRESS division launched the Certified International Specialist programme, providing...

  • Page 88
    ... the employer of choice. The fourth edition of our Group-wide survey in 2010 saw a clear rise in the response rate to 79 % (previous year: 76 %). All 11 key performance indicators saw improvements. The highest marks went to customer promise with 77 %, co-operation with 74 % and working conditions...

  • Page 89
    Group Management Report Non-Financial Performance Indicators Corporate responsibility 75 Making the most of our creativity Our staff submit ideas and suggestions for improvement to contribute to our company's success. In 2010, their suggestions numbered 227,803. We used many of them to improve ...

  • Page 90
    ...in 2012, we plan to also use our financial system to standardise how we report the carbon emissions of sub-contractors for all divisions. Carbon efficiency is a key indicator in our strategic planning and is one of the criteria we use to make major investment decisions. We affirmed this in our Group...

  • Page 91
    ... Airports Ready for Disaster project held readiness training sessions together with the UN Development Programme at Kathmandu Tribhuvan International airport and four regional airports in Nepal. More training is planned in 2011 in disasterprone regions in Asia. Deutsche Post DHL Annual Report 2010

  • Page 92
    ... internships within the Group and additional courses such as foreign languages and computer skills. UPstairs kicks off in 2011 with 50 scholarship holders in South Africa, Indonesia, Mexico and Romania. We plan to be awarding a total of 600 scholarships by 2014. Deutsche Post DHL Annual Report 2010

  • Page 93
    .... Our next Corporate Responsibility Report will also be published on our website in the second quarter of 2011. dp-dhl.com/responsibility Procurement Marginal rise in expenditure a.66 Procurement expenses, 2010 Volume: â,¬ 8.5 billion 3 % Air ï¬,eet 8 % Production systems 9 % Network supplies 13...

  • Page 94
    ... work closely with regional procurement managers and report to the head of Corporate Procurement. This allows us to bundle the Group's worldwide requirements and still meet the local needs of the business units. In addition, strategic procurement was reorganised into Global Sourcing Operations...

  • Page 95
    ... of regions with energy-efficient lighting. The new lights not only reduce energy costs and carbon emissions, they also offer a brighter working environment. We also retrofitted office spaces in Asia. We are testing vehicles with environmentally friendly drive systems in a number of test projects...

  • Page 96
    ... order to take early advantage of new products and ideas. 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. Customers and quality Innovative...

  • Page 97
    ... per year. We regard working practices that protect the environment as a key yardstick of quality. In Germany, we therefore employ a TÃœV Nord-certified environmental management system in our mail and parcel businesses. As part of our GoGreen initiative, we offer consumers and business customers...

  • Page 98
    ...around the world. Our relentless drive to improve our processes has paid off: customer satisfaction showed significant improvement based on a customer survey in 2010. Eight out of 10 customers confirm DHL as their provider of choice in the supply chain business. Deutsche Post DHL Annual Report 2010

  • Page 99
    ... customers. Brands a.67 Brands and business units Deutsche Post DHL global forwarding, freight dhl Division Brand mail Deutsche Post dhl express dhl supply chain dhl Brand area • Mail Communication • Dialogue Marketing • Value-Added Services • Press Services • Philately • Pension...

  • Page 100
    ... both domestically and internationally. Clear positioning and a lasting impression facilitate purchasing and investment decisions. Guided by market research, we invested over â,¬ 100 million in the year under review in developing and promoting our brand performance. Based on our One DHL approach, we...

  • Page 101
    ... sector and in key markets. By the end of 2011, 60% of those who purchase logistics services should be considering DHL as a potential supplier. Our goal is to be amongst the world's 50 most valuable brands. FURTHER DEVELOPMENTS Report on post-balance sheet date events No further significant...

  • Page 102
    ... / risk management / compliance 5 Control Review results Review measures Monitor early warning indicators 4 Determine Manage Operative measures Plan Implement Divisions Opportunity and risk controlling processes Board of Management Internal auditors Deutsche Post DHL Annual Report 2010

  • Page 103
    .... The Global Compliance Office he heads develops Group-wide standards and supports the divisions' activities in this area. Operating measures: As part of the strategy, the divisions determine the measures to be used to take advantage of opportunities and manage risks. They use cost-benefit analyses...

  • Page 104
    ... of choice, which is why we are aligning our services even more closely to the needs of our customers. We are also improving our cost structures and processes. A number of key factors have a strong impact on our business and open up numerous opportunities. Deutsche Post DHL Annual Report 2010

  • Page 105
    ... increasingly requesting energy-efficient transport and climateneutral products. We lead our sector in this area, offering carbon-neutral mail, parcel and express products plus air and ocean freight transport. Utilising our employees' ideas Our Idea Management programme promotes corporate innovation...

  • Page 106
    ... Post AG due to increased competition in Germany, it also opens up new opportunities in other European postal markets. In 2010, Deutsche Post AG participated in cross-border mail exchange with 22 European postal operators on the basis of the REIMS agreement. Deutsche Post DHL Annual Report 2010

  • Page 107
    ... savings generated in recent years, we consider ourselves in a position to keep any potential risk to our projected earnings from competition at a fairly low level. Our various Group initiatives also play a key role in securing our strong competitive position. Deutsche Post DHL Annual Report 2010

  • Page 108
    ... to further improving security aspects and the sustainability of security measures, particularly so that our customers, business partners and employees will benefit. Risks arising from corporate strategy Over the past two years, the Group has responded to key strategic issues. We initiated...

  • Page 109
    ...our ability to continuously improve our existing business and to grow in our most important market segments and customer solutions. Risks arising from internal processes The mark of the quality of logistics services is the extent to which they are supplied reliably and on time. To ensure that these...

  • Page 110
    ... data centres. All software is updated frequently to address bugs, close gaps in security and increase functionality. We employ a patch management process, a defined procedure for managing software upgrades, to control risks that could arise from out-dated software or from software upgrades. We...

  • Page 111
    ... year, employee approval ratings for "working conditions" improved by six percentage points to 73 %, and the ratings for "learning and development" rose by five percentage points to 63 %. In 2010, we also began introducing career paths for success-critical positions and job families. This secures...

  • Page 112
    ... laws, unclaimed property must either be returned to its rightful owner or the home country of the most recent owner or, if this is not known, the country in which the company is domiciled. The probability of a significant financial impact on the Group is fairly low. Deutsche Post DHL Annual Report...

  • Page 113
    ... competitive position Deutsche Post DHL is the market leader in the German mail business and in nearly all of our logistics activities. We operate all over the world and are able to offer our customers comprehensive services that extend to all modes of transport and links in the supply chain. Our...

  • Page 114
    ... DHL brand stands for a wide product spectrum and a global logistics presence. Our EXPRESS, GLOBAL FORWARDING, FREIGHT and SUPPLY CHAIN divisions operate in attractive market segments. We want to continue taking advantage of the excellent growth opportunities in the logistics industry. Our guiding...

  • Page 115
    ..., we intend to adapt our parcel network in order to process rising parcel volumes faster and give customers real-time parcel tracking information. A new production system allows us to more efficiently sort and transport parcels, saving costs along the way. Deutsche Post DHL Annual Report 2010

  • Page 116
    ...our quality control centres we track shipments globally and adapt processes dynamically to enable us to guarantee quick delivery, even in the event of unforeseen circumstances. Reliability and speed are vital to our position as experts in international shipping. Deutsche Post DHL Annual Report 2010

  • Page 117
    ... in air and ocean freight and in overland transport. Our goal is to achieve steady, organic growth that exceeds the market average. To achieve this goal, we pursue three approaches: • Developing and engaging our staff Our business operates with a low level of non- current assets. The high quality...

  • Page 118
    ... locations around the world, 12 in Greater China and the North Asia Pacific region alone. We are able to serve these new and somewhat volatile markets at low costs because we manage freight capacities centrally. We plan to take advantage of these conditions to further expand the air freight network...

  • Page 119
    ...are learning to better understand our customers' business objectives and strategies, which enables us to offer them true added value. Feedback from customers and customer surveys also assist us in continuously enhancing the effectiveness of our sales activities. Deutsche Post DHL Annual Report 2010

  • Page 120
    ... Global Industrial nations Emerging markets Central and Eastern Europe cis countries Emerging markets in Asia Middle East and North Africa Latin America and the Caribbean Africa south of the Sahara Source: International Monetary Fund (imf) world economic outlook, October 2010, updated January 2011...

  • Page 121
    ...to tap into new business related to our core competency, mail. In the parcel market, we expect to benefit from business customer and consumer activities in the online marketplace and we intend to expand our position in this market. Developing our international express business Experience shows that...

  • Page 122
    ... product offering and increasing development of our broad DHL customer base. To capture these opportunities, we shall continue our Growth Through Excellence strategy with the objectives of continuously improving existing business and profitably growing new business. Deutsche Post DHL Annual Report...

  • Page 123
    ... on the projected earnings trend for 2011 and the planned increase in capital expenditure, we expect the FFO to debt performance metric to remain at approximately the prior-year level and the rating agencies to continue to rank our credit quality as appropriate. Deutsche Post DHL Annual Report 2010

  • Page 124
    ... capital expenditure in 2011. Investments will relate mainly to the maintenance and expansion of our global network in order to sustain our high quality level in light of increasing volumes. We also plan to selectively enhance our footprint in a number of countries and regions based on our strategy...

  • Page 125
    ... GOVERNANCE B Parcel B Corporate Governance Document shipment Small package dhl YOUR CHOICE. BECAUSE FLEXIBILITY MEANS FREEDOM. dhl is a partner of both business customers and consumers for routine parcel shipping to destinations in Germany, Europe and the world as well as for time-definite...

  • Page 126
    ... THE SUPERVISORY BOARD 113 117 117 117 SUPERVISORY BOARD Members of the Supervisory Board Committees of the Supervisory Board BOARD OF MANAGEMENT 118 122 123 124 128 MANDATES HELD BY THE BOARD OF MANAGEMENT MANDATES HELD BY THE SUPERVISORY BOARD CORPORATE GOVERNANCE REPORT Remuneration report

  • Page 127
    ... of changes to value added tax legislation. All significant decisions were discussed in detail with the Board of Management. It also informed us in a timely and comprehensive manner regarding business performance, key business transactions and projects in the divisions, compliance organisation and...

  • Page 128
    ... financial control parameters, its credit rating and the use of liquidity. We also reviewed the results of the efficiency review of the work of the Supervisory Board. At the Supervisory Board meeting held on 15 June 2010, the Board of Management informed us that the sale of the day-definite express...

  • Page 129
    ... organisation and compliance management, as well as the findings of the reviews carried out by Internal Audit. It also approved the Audit Plan 2011. With regard to accounting, the committee discussed with the auditors the main features of the internal control system and the risk management system...

  • Page 130
    ... Finance and Audit Committee, the Supervisory Board reviewed the annual and consolidated financial statements and the management reports for financial year 2010 at the financial statements meeting held on 9 March 2011. The review included the Board of Management's proposal for the appropriation of...

  • Page 131
    ... Head of National Postal Services Group at ver.di national administration Heinrich Josef Busch 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 Member of the Works Council, dhl Global...

  • Page 132
    118 BOARD OF MANAGEMENT DR FRANK APPEL Chief Executive Officer Born in 1961 Member since November 2002, ceo since February 2008 Appointed until October 2012 Deutsche Post DHL Annual Report 2010

  • Page 133
    Corporate Governance Board of Management 119 LAWRENCE ROSEN Finance, Global Business Services WALTER SCHEURLE Personnel Born in 1957 Member since September 2009 Appointed until August 2012 Born in 1952 Member since April 2000 Appointed until March 2013 Deutsche Post DHL Annual Report 2010

  • Page 134
    120 JÃœRGEN GERDES mail KEN ALLEN express Born in 1964 Member since July 2007 Appointed until June 2015 Born in 1955 Member since February 2009 Appointed until February 2012 Deutsche Post DHL Annual Report 2010

  • Page 135
    Corporate Governance Board of Management 121 HERMANN UDE global forwarding, freight BRUCE EDWARDS supply chain Born in 1961 Member since March 2008 Appointed until March 2016 Born in 1955 Member since March 2008 Appointed until March 2016 Deutsche Post DHL Annual Report 2010

  • Page 136
    ... v.1) (Board of Directors) Tibbett & Britten Group Limited1) (Board of Directors) Williams Lea Group Limited1) (Board of Directors) Williams Lea Holdings plc1) (Board of Directors, Chair) Jürgen Gerdes Global Mail, Inc.1) (Board of Directors) 1) Group mandate. Deutsche Post DHL Annual Report 2010

  • Page 137
    ... GmbH (Administrative Board) Dr Ulrich Schröder "Marguerite 2020": European Fund for Energy, Climate Change and Infrastructure (Supervisory Board) Elmar Toime Blackbay Ltd., United Kingdom (Non-Executive Director) Postea Inc., usa (Non-Executive Chairman) Deutsche Post DHL Annual Report 2010

  • Page 138
    ... the needs of our employees and customers. As a globally operating company and corporate citizen, we bear great responsibility for the environment and the living conditions in the regions in which we operate. This is a responsibility that we take seriously. Our sustainability strategy rests on the...

  • Page 139
    ... Board. In addition to the board departments of the Chief Executive Officer (CEO), the CFO and the Board Member for Personnel, the Board of Management also includes the operating board departments of MAIL, GLOBAL FORWARDING, FREIGHT, EXPRESS and SUPPLY CHAIN. Deutsche Post DHL Annual Report 2010

  • Page 140
    ... year. Special meetings are held whenever significant events so dictate. In financial year 2010, the Supervisory Board met for four plenary meetings, 17 committee meetings and a closed meeting, as described in the Report of the Supervisory Board. The Board of Management and the Supervisory Board...

  • Page 141
    ...Finance, Corporate Development and Legal Services in the case of acquisitions. The DHL Executive Committee and the MAIL Steering Committee each meet at least once a month. Furthermore, business review meetings take place once per quarter. These meetings are part of the strategic performance dialogue...

  • Page 142
    ... (EAC), 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 EAC of their respective division is also a key parameter. Furthermore, an employee-related target is agreed on...

  • Page 143
    ...difference between the average closing price of Deutsche Post shares for the five trading days preceding the exercise date and the exercise price of the SAR. In 2010, the members of the Board of Management each invested 10 % of their annual base salary as a personal financial investment. The waiting...

  • Page 144
    ... of the change of control, the Board of Management member is entitled to payment to compensate the remaining term of his Board of Management contract. Such payment is limited to 150 % of the severance payment cap pursuant to the recommendation of the German Corporate Governance Code. The amount...

  • Page 145
    ... paid to the Group Board of Management in 2010: share-based component with long-term incentive effect â,¬ Value of sar s on grant date (1 July 2010) Change in value of total sar s granted from 2007 to 2010 on 31 Dec. 2010 compared with value on grant date Active board members Number of sar s Dr...

  • Page 146
    ... arrangements, the pension level increases gradually based on either the period of service or the periods of appointment on the Board of Management. Subsequent pension benefits increase or decrease to reflect changes in the consumer price index in Germany. Deutsche Post DHL Annual Report 2010

  • Page 147
    Corporate Governance Corporate Governance Report Remuneration report 133 b.09 Board of Management pension commitments under the previous system in financial year 2010: individual breakdown Pension commitments Pension level on 31 Dec. 2010 % Maximum pension level % Service cost for pension ...

  • Page 148
    ... using the assessment basis applicable at the time of his appointment to the Board of Management. b.11 Board of Management pension commitments under the new system in financial year 2010: individual breakdown â,¬ Total contribution for 2010 Present value (dbo) as at 31 Dec. 2010 Service cost...

  • Page 149
    ... Governance Corporate Governance Report Remuneration report 135 The variable remuneration component for financial year 2010, which is geared towards sustainable corporate development, will amount to â,¬ 1,000 for each â,¬ 0.02 by which the consolidated net profit per share for financial year 2012...

  • Page 150
    ... 2008, the former remuneration system provides for 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 2010 exceeds the consolidated net profit per share for financial year 2007. In order...

  • Page 151
    ... Pallet dhl YOUR CHOICE. BECAUSE WE TRANSCEND BORDERS. dhl is the world's largest provider of air freight services, the number two for ocean freight services and one of the leading overland freight forwarders in Europe, the Middle East and North Africa. We develop customised transport solutions...

  • Page 152
    ... of Conformity with the German Corporate Governance Code Significant events after the balance sheet date List of shareholdings 186 199 199 200 201 202 206 206 206 206 207 Basis of accounting Consolidated group Significant transactions New developments in international accounting under the ifrs...

  • Page 153
    Consolidated Financial Statements Income Statement 139 C.01 INCOME STATEMENT 1 January to 31 December â,¬m Note 2009 2010 Continuing operations Revenue Other operating income Total operating income Materials expense Staff costs Depreciation, amortisation and impairment losses Other operating ...

  • Page 154
    ...(after tax) Total comprehensive income attributable to Deutsche Post ag shareholders attributable to non-controlling interests 19 693 2,630 165 31 522 20 0 0 1 0 3 - 49 - 67 109 366 -256 6 -16 0 0 0 123 383 1,076 1,070 6 -1 0 1 93 668 3,298 3,197 101 Deutsche Post DHL Annual Report 2010

  • Page 155
    ... 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 Non-controlling interests Equity Provisions for pensions and similar obligations Deferred tax...

  • Page 156
    ... Income taxes paid Net cash from operating activities before changes in working capital Changes in working capital Inventories Receivables and other current assets Liabilities and other items Net cash from operating activities due to continuing operations Net cash used in operating activities due...

  • Page 157
    ...Retained earnings 41 Equity attributable to Deutsche Post ag shareholders 42 Noncontrolling interests 43 Total equity Note Balance at 1 January 2009 Capital transactions with owner Dividend Changes in non-controlling interests due to changes in consolidated group Share Matching Scheme (issuance...

  • Page 158
    ... a true and fair view of the Group's net assets, financial position and results of operations. The consolidated financial statements consist of 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...

  • Page 159
    ... Carrying amount Adjustments Fair value The following table shows the disposal and deconsolidation effects of companies and business areas in financial year 2010. DHL Express (uK) Ltd., UK, sold its day-definite domestic business in March. â,¬ 12 million in expenses was recognised by DHL Express UK...

  • Page 160
    ... reported as an equity-accounted investment under investments in associates. The effects of the planned Postbank sale are as follows: Effects of the planned Postbank sale â,¬m 2009 2010 balance sheet Investments in associates Non-current financial assets Financial liabilities income statement Net...

  • Page 161
    ... increased to â,¬ 1,653 million as at 31 December 2010. Changes in this fair value at the subsequent reporting dates may continue to affect net finance costs /net financial income; Note 18. Further details on the accounting treatment of the investment in Deutsche Postbank AG in financial year 2010...

  • Page 162
    ... a significant effect on Deutsche Post DHL's consolidated financial statements. The forward transaction (planned sale of Postbank shares) embedded in the mandatory exchangeable bond was recognised in profit or loss effective 1 January 2010 and will be measured at fair value in subsequent periods, as...

  • Page 163
    ... Adjustments 2009 adjusted Net cash used in investing activities Cash paid to acquire non-current assets Subsidiaries and other business units Net cash from financing activities Cash paid for transactions with non-controlling interests 0 -12 -12 - 53 12 - 41 Deutsche Post DHL Annual Report 2010

  • Page 164
    ... companies is determined by the primary economic environment in which they mainly generate and use cash. Within the Group, the functional currency is predominantly the local currency. In the consolidated financial statements, assets and liabilities are therefore translated at the closing rates...

  • Page 165
    .... 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 166
    ...are accounted for using the equity method in accordance with IAS 28 (Investments in Associates). Based on the cost of acquisition at the time of purchase of the investments, the carrying amount of the investment is increased or reduced annually to reflect the share of earnings, dividends distributed...

  • Page 167
    Consolidated Financial Statements Notes Basis of preparation 153 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 loss is ...

  • Page 168
    ... used are recognised in the balance sheet as amounts due to banks. Share-based payment In a number of countries, the Group maintains defined benefit pension plans based on the pensionable compensation and length of service of employees. These pension plans are funded via external plan assets...

  • Page 169
    ...of its estimates. Financial liabilities 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...

  • Page 170
    ...the plan assets, changes in the discount rate used for the Group's benefit plans generally have little or no effect on the expense or the carrying amount of the provisions recognised in the following financial year. The Group has operating activities around the globe and is subject to local tax laws...

  • Page 171
    ... unforeseeable changes in these assumptions - 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...

  • Page 172
    ..., freight 20091) 2010 Corporate Center / Other 2009 2010 Continuing operations 2009 2010 Discontinued operations 2009 2010 mail 1 Jan. to 31 Dec. 20091) 2010 20091) express 2010 supply chain 20091) 2010 Consolidation 20091) 2010 External revenue Internal revenue Total revenue Profit / loss...

  • Page 173
    ... transferred from DHL Express Sweden to DHL Freight Sweden effective 1 January 2010. The prior-year figures were adjusted accordingly. The main geographical areas in which the Group is active are Germany, Europe, the Americas, Asia Pacific and Other regions. External revenue, non-current assets and...

  • Page 174
    ...-current financial assets including investments in associates Other non-current assets Deferred tax assets Income tax assets Receivables and other assets Current financial assets Cash and cash equivalents Segment assets of which Corporate Center / Other Total for reportable segments Consolidation...

  • Page 175
    ... increase in the materials expense is due on the one hand to higher aircraft fuel prices, and on the other hand to higher transportation costs as a result of the expansion of business activities. Other expenses include a large number of individual items. 14 â,¬m Staff costs / employees 2009 2010...

  • Page 176
    ... employers. Retirement benefit expenses consist of additions to provisions for pensions and similar obligations as well as contributions to defined contribution pension plans. Detailed information can be found in Notes 7 and 44. The average number of Group employees in the year under review, broken...

  • Page 177
    ... Financial Statements Notes Income statement disclosures 163 16 â,¬m Other operating expenses 17 â,¬m 2009 2010 Net income from associates 2009 2010 Expenses from disposal of assets Other business taxes Travel and training costs Cost of purchased cleaning, transport and security services...

  • Page 178
    ... recognised in the balance sheet for companies that reported a loss in the previous year as, based on tax planning, realisation of the tax asset is probable. Tax-exempt income and non-deductible expenses mainly include the effect from the planned sale of Postbank. In financial year 2010, as in the...

  • Page 179
    ... net profit by the average number of shares. Basic earnings per share for financial year 2010 were â,¬ 2.10 (previous year: â,¬ 0.53). Basic earnings per share 2009 2010 24 Earnings per share Consolidated net profit attributable to Deutsche Post ag shareholders Weighted average number of shares...

  • Page 180
    ... 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 2009 Additions to consolidated group Additions Reclassi...

  • Page 181
    ...forecasts take into account growth in the respective national business operations and in international trade, and the ongoing trend towards outsourcing logistics activities. Cost estimates for the transportation network and services also have an impact on value in use. The pre-tax cost of capital is...

  • Page 182
    ... buildings Technical Other equipequipment, office ment and and operating machinery equipment Advance Vehicle ï¬,eet payments and and transport assets under equipment development Aircraft Total Cost Balance at 1 January 2009 Additions to consolidated group Additions Reclassifications Disposals...

  • Page 183
    ... The following assets are carried as non-current assets resulting from finance leases: â,¬m 2009 2010 Since March 2009, the 39.5% interest in the Deutsche Postbank Group has been accounted for using the equity method. Since this also accounts for the largest portion of this balance sheet item, the...

  • Page 184
    ... relates to tax loss carryforwards in Germany and â,¬ 112 million (previous year: â,¬ 57 million) to foreign tax loss carryforwards. Income tax liabilities All income tax assets and liabilities are current and have maturities of less than one year. Deutsche Post DHL Annual Report 2010

  • Page 185
    ... 2010 Current financial assets 2009 2010 Trade receivables Prepaid expenses Deferred revenue Current tax receivables Income from cost absorption Creditors with debit balances Receivables from Group companies Receivables from employees Receivables from insurance business Receivables from loss...

  • Page 186
    ... in the resolution by the Annual General Meeting. In addition, the Board of Management has been authorised to acquire own shares using derivatives. As at the reporting date in the previous year, Deutsche Post AG did not hold any own shares on 31 December 2010. KfW Free ï¬,oat Share capital as at 31...

  • Page 187
    Consolidated Financial Statements Notes Balance sheet disclosures 173 39.4 Disclosures on corporate capital The equity ratio was 28.3 % in financial year 2010 (previous year: 23.8 %). The company's capital is monitored using the net gearing ratio which is defined as net debt divided by the total ...

  • Page 188
    .... No capital gains tax (investment income tax) will be withheld on the distribution. This balance sheet item includes adjustments for the interests of non-Group shareholders in the consolidated equity from acquisition accounting, as well as their interests in profit or loss. The interests relate...

  • Page 189
    ...plan assets was determined by reference to long-term bond yields (government and corporate). In this process, suitable risk premiums were applied on the basis of historical market returns and current market expectations taking plan asset structures into account. Deutsche Post DHL Annual Report 2010

  • Page 190
    ...fair value of plan assets and the pension provisions â,¬m Germany uk Other Total 2010 Present value of total defined benefit obligations at 31 December for wholly or partly funded benefits Present value...206 8,886 3,463 12,349 -7,019 -1,199 0 7 4,138 375 4,513 Deutsche Post DHL Annual Report 2010

  • Page 191
    Consolidated Financial Statements Notes Balance sheet disclosures 177 44.5 Changes in the present value of total defined benefit obligations â,¬m Germany uk Other Total 2010 Present value of total defined benefit obligations at 1 January Current service cost, excluding employee contributions ...

  • Page 192
    178 44.6 Changes in the fair value of plan assets â,¬m Germany uk Other Total 2010 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 Acquisitions Settlements Currency...

  • Page 193
    Consolidated Financial Statements Notes Balance sheet disclosures 179 44.8 Gains and losses â,¬m Actual return on plan assets Expected return on plan assets Experience gains (+) / losses (-) on plan assets1) 2006 Total 2007 Total 2008 Total 2009 Total 2010 Total â,¬m Experience gains (+) / losses...

  • Page 194
    180 44.10 Pension expense â,¬m Germany uk Other Total 2010 Current service cost, excluding employee contributions Interest cost Expected return on plan assets Recognised past service cost Amortisation of unrealised gains (-) / losses (+) Effects of curtailments Effects of settlements Effects of ...

  • Page 195
    ... 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 2009 2010 Tax provisions Litigation costs Risks from business activities Postal Civil Service Health Insurance Fund Welfare...

  • Page 196
    ... rate End of term Asset 2009 2010 Deutsche Post Immobilien GmbH, Germany dhl Express (us) Inc., usa scm Supply Chain Management Inc., Canada Deutsche Post ag, Germany Lorac Investment Management Sarl Wachovia Financial Services; Wells Fargo Bank of Nova Scotia t-Systems International GmbH, Germany...

  • Page 197
    ...46.4 Financial liabilities at fair value through profit or loss The other financial liabilities mainly result from the transactions related to the planned sale of Deutsche Postbank shares. Financial liabilities consist of a mandatory exchangeable bond on 60 million Postbank shares, cash collateral...

  • Page 198
    ... more than three months, and correspond to the cash and cash equivalents reported on the balance sheet. The effects of currency translation and changes in the consolidated group are adjusted when calculating cash and cash equivalents. 49 Cash ï¬,ow disclosures Deutsche Post DHL Annual Report 2010

  • Page 199
    ...previous year, the change in current financial assets resulted in net cash outflows of â,¬ 659 million. Cash was received from the sale of Deutsche Bank shares which was invested on the capital market. The sales of the day-definite domestic express business in France and the UK led to a cash outflow...

  • Page 200
    ... financial risks. Any use of derivatives for speculative purposes is therefore not permitted under the Group's internal guidelines. The aim of liquidity management is to ensure that the Deutsche Post DHL Group and the Group companies are in a position to meet their payment obligations on time...

  • Page 201
    Consolidated Financial Statements Notes Other disclosures 187 The maturity structure of primary financial liabilities within the scope of IFRS 7 based on cash flows is as follows: Maturity structure: remaining maturities â,¬m Less than 1 year More than 1 year to 2 years More than 2 years to 3 ...

  • Page 202
    ... balance sheet currency risks within the Group are centralised at Deutsche Post AG through the in-house bank function. The centralised risks are aggregated by Corporate Treasury to calculate a net position per currency and hedged externally based on value at risk limits. The currency-related value...

  • Page 203
    ... Group's risk position. Hypothetical changes in exchange rates have an effect on the fair values of Deutsche Post AG's external derivatives that is reported in profit or loss; they also affect the foreign currency gains and losses from remeasurement at the closing date of the in-house bank balances...

  • Page 204
    ... exchange price of Deutsche Postbank shares, the fair value falls below the carrying amount of the equity investment, a write-down is recognised. It is reversed up to the amount of amortised cost in accordance with the equity method, should the share price increase. Deutsche Post DHL Annual Report...

  • Page 205
    ... charged on the positive fair values due to the individual counterparties' credit quality. This was not the case for any of the counterparties as at 31 December 2010. Default risks are continuously monitored in the operating business. The aggregate carrying amounts of financial assets represent the...

  • Page 206
    ... used in the Group and their fair values. Derivatives with amortising notional volumes are reported in the full amount at maturity. Derivative financial instruments â,¬m 2009 Notional amount Notional Fair value amount of assets Fair value of liabilities 2010 Less Total fair than 1 value year Assets...

  • Page 207
    ...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,¬ 5 million as at year-end (previous year: â,¬ 1 million). There was minor hedge ineffectiveness. Deutsche Post DHL Annual Report 2010

  • Page 208
    ...the balance sheet as at 31 December 2010 â,¬m Carrying amount Carrying amount by measurement category in accordance with IAS 39 Financial assets and liabilities at fair value through profit or loss Trading Fair value option Available-for-sale financial assets assets Non-current financial assets at...

  • Page 209
    Consolidated Financial Statements Notes Other disclosures 195 Other financial instruments outside the scope of IAS 39 Loans and receivables / other financial liabilities Held-to-maturity assets Derivatives designated as hedging instruments Lease receivables / finance lease liabilities Fair value ...

  • Page 210
    ...the balance sheet as at 31 December 2009 â,¬m Carrying amount Carrying amount by measurement category in accordance with IAS 39 Financial assets and liabilities at fair value through profit or loss Trading Fair value option Available-for-sale financial assets assets Non-current financial assets at...

  • Page 211
    Consolidated Financial Statements Notes Other disclosures 197 Other financial instruments outside the scope of IAS 39 Loans and receivables / other financial liabilities Held-to-maturity assets Derivatives designated as hedging instruments Lease receivables / finance lease liabilities Fair value ...

  • Page 212
    ...shares measured at cost were sold in the financial year. Available-for-sale financial assets measured at fair value relate to equity and debt instruments. Financial assets at fair value through profit or loss include securities to which the fair value option was applied, in order to avoid accounting...

  • Page 213
    ... increase in the net income in the financial assets and liabilities at fair value through profit or loss category is attributable to the initial recognition of the forward entered into as part of the planned sale of the Deutsche Postbank AG shares. Dividends and interest are not taken into account...

  • Page 214
    ...and competitive services. This also relates to co-operation agreements between Deutsche Post AG and Deutsche Postbank AG as well as between Deutsche Post AG and the business parcel service marketed by DHL Vertriebs GmbH. Deutsche Post AG and Deutsche Postbank AG hold that the new investigation lacks...

  • Page 215
    ... 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 invested 10 % of their fixed annual remuneration (annual base salary) as a personal financial investment in 2010. The number...

  • Page 216
    ... LTIP and the 2006 SAR Plan (Board of Management and executives) was recognised as at the balance sheet date in the amount of â,¬ 37 million (previous year: â,¬ 16 million). The federal government is a customer of Deutsche Post AG and as such uses the company's services. Deutsche Post AG has direct...

  • Page 217
    ... at the Annual General Meeting due to its average presence there, a dependent relationship exists between Deutsche Telekom and the federal government. Deutsche Telekom is therefore a related party of Deutsche Post AG. In financial year 2010, Deutsche Post DHL provided goods and services worth...

  • Page 218
    ...-3 30 13 0 - 47 -20 -4 Post-employment benefits are recognised as the service cost resulting from the pension provisions for active members of the Board of Management. The share-based payment amount relates to the relevant expense recognised for financial years 2009 and 2010. It is itemised in the...

  • Page 219
    ... to the active members of the Board of Management in financial year 2010 including the components with a long-term incentive effect totalled â,¬ 17.0 million (previous year: â,¬ 22.2 million). Of this amount, â,¬ 7.1 million (previous year: â,¬ 9.8 million) is attributable to non-performance-related...

  • Page 220
    ... Solutions GmbH 58 Declaration of Conformity with the German Corporate Governance Code In December 2010, the Board of Management and the Supervisory Board of Deutsche Post AG jointly submitted the Declaration of Conformity with the German Corporate Governance Code for financial year 2010 required...

  • Page 221
    ... Deutsche Post Customer Service Center GmbH Deutsche Post DHL Corporate Real Estate Management GmbH Deutsche Post DHL Inhouse Consulting GmbH Deutsche Post DHL Market Research and Innovation GmbH Deutsche Post Direkt GmbH Deutsche Post Finance b. v. Deutsche Post Fleet GmbH Deutsche Post Global Mail...

  • Page 222
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Deutsche Post Global Mail (Netherlands) b. v. Deutsche Post Global Mail (Switzerland) ag Deutsche Post Global Mail (uk) Limited 5) Deutsche Post...

  • Page 223
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands dhl Express (Ireland) Ltd. dhl Express (Italy) S. r. l. dhl Express (Luxembourg) s. a. dhl Express (Netherlands) b. v. dhl Express (Norway) as dhl...

  • Page 224
    ...dhl Global Mail ooo dhl Global Management GmbH dhl Group Services nv / sa dhl Holding (France) sas dhl Holding (Italy) S. r. l. dhl Holdings (Ireland) Ltd. dhl Home Delivery GmbH dhl Hub Leipzig GmbH dhl Information Services (Europe) s. r. o. dhl Inter Limited 5) dhl International (Albania) Ltd. dhl...

  • Page 225
    ... GmbH dhl Trade Fairs and Events (uk) Limited dhl Vehicle Services (uk) Limited dhl Vertriebs GmbH & Co. ohg dhl Verwaltungs GmbH dhl Voigt International GmbH dhl Wahl International GmbH dhl Worldwide Express Logistics nv / sa dhl Worlwide Network nv / sa dz Specialties b. v. European Air Transport...

  • Page 226
    ... as Exel Environmental Developments Limited Exel Europe Limited Exel Finance (1986) Limited 5) Exel Finance Limited Exel France sa Exel Freight Management (uk) Limited 5) Exel Freight sas Exel Gallieni sarl Exel Gironde sa Exel Group Holdings (Nederland) b. v. Exel Head Office Services Limited Exel...

  • Page 227
    Consolidated Financial Statements Notes Other disclosures 213 Affiliated companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Güll GmbH Henderson Line Limited 5) Higgs International Limited Historia Sp....

  • Page 228
    ... consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Scherbauer Spedition GmbH 7b) Selektvracht b. v. sermat Services Maritimes Aériens et Transit s a sgb Speditionsgesellschaft mbH Speedmail International Limited 5) StarBroker...

  • Page 229
    ... a. dhl Aviation Americas, Inc. 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 Customs Brokerage Ltd. dhl de Guatemala s. a. 7a) dhl Dominicana sa dhl Exel Supply Chain (Argentina) s. a. dhl Express...

  • Page 230
    ...7b) dhl Information Services (Americas), Inc. dhl International Antilles sarl dhl International Express Ltd. dhl International Haiti sa dhl Logistics (Brazil) Ltda. dhl Management Cenam s. a. dhl Metropolitan Logistics sc México dhl Network Operations (usa), Inc. dhl Nicaragua, s. a. dhl of Curacao...

  • Page 231
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands f. x. Coughlin do Brasil Ltda. Freshlink Canada Ltd. Genesis Logistics Inc. Giorgio Gori usa, Inc. Global Mail, Inc. Global Mail Terminal Operations...

  • Page 232
    ... companies included in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Asia-Pacific Information Services Sdn. Bhd. Beijing Sinotrans Express Co., Ltd. Blue Dart Aviation Ltd.6) Blue Dart Express Limited Danzas (China...

  • Page 233
    ... k. k. dhl Supply Chain Singapore Pte. Ltd. dhl Worldwide Express (Bangladesh) Private Limited dhl-vnpt Express Ltd. Dongguan dhl Supply Chain Co., Ltd. Exel (Australia) Pty Ltd. Exel Consolidation Services Limited Exel Distribution (Thailand) Ltd. Exel Japan (Finance) Ltd. Exel Logistics (China) Co...

  • Page 234
    ...in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands pt dhl Global Forwarding Indonesia Shanghai Danzas Freight Agency Co. Ltd. Shanghai Quan Yi Express Limited Company (apex 3) Shanghai Quan Yi Express Limited Company (apex...

  • Page 235
    ...Operations bv Jordan Services with Limited Liability dhl Qatar Limited 7b) dhl Regional Services (Indian Ocean) Ltd. dhl Regional Services Limited 5) dhl Senegal sarl dhl Supply Chain (South Africa) (Pty) Ltd. dhl Swaziland (Proprietary) Ltd. dhl Worldwide Express & Company llc dhl Worldwide Express...

  • Page 236
    ... Post Pensions-Treuhand GmbH & Co. kg 2), 9) dhl Employee Benefit Fund asbl / vzw 2), 9) dhl Exel Supply Chain Limited 4), 5) dhl Pensions Investment Fund Limited 4), 5) dhl Systems Limited 3), 9) dhl Trustees Limited 4), 5) dhl uk Pension Trustees Limited 5), 9) dmw-Expo 3), 9) Elan International...

  • Page 237
    ...in the consolidated financial statements Name Headquarters Group equity share % Currency Equity thousands Net income thousands Exel Overseas Finance 2), 8) Exel Sand and Ballast Company Limited 5), 9) Exel Secretarial Services Limited 4), 5) Exel Share Scheme Trustees Limited 5), 9) Exel Taskforce...

  • Page 238
    ... Lea Group Quest Trustees Limited 5), 9) Williams Lea International Limited 5), 9) Americas Axis Logistics Inc.9) Deutsche Post World Net usa Inc.4) dhl Consumer Services sc México 2), 9) dhl Express (Belize) Limited 2), 9) dhl Global Forwarding (Brazil) Logistics Ltda. 4) dhl Holdings n. v. 8) dhl...

  • Page 239
    ... 2,910 Associated companies (accounting treatment in the consolidated financial statements using the equity method) Name Headquarters Group equity share % Currency Equity thousands Net income thousands Europe Betriebs-Center für Banken ag 11) Betriebs-Center für Banken Processing GmbH 11) bhw...

  • Page 240
    226 Associated companies (accounting treatment in the consolidated financial statements using the equity method) Name Headquarters Group equity share % Currency Equity thousands Net income thousands Merkur ii sicav - fis 11) pb Factoring GmbH 11) pb Firmenkunden ag 11) pb Spezial-...

  • Page 241
    ... in 2010. Germany, Frankfurt am Main Germany, Grünwald 50.00 50.00 eur eur 182 - -11 - Unconsolidated associated companies Name Headquarters Group equity share % Currency Equity thousands Net income thousands Europe Airmail Center Frankfurt GmbH 2), 9) Automotive Logistics (uk) Limited...

  • Page 242
    ... accounting principles, 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...

  • Page 243
    .... Deutsche Post dhl was the first logistics company to introduce a carbon neutral shipping service for both consumers and business customers: Gogreen. The carbon dioxide emissions generated during letter, parcel, express and freight transport are measured and offset with carbon credits from climate...

  • Page 244
    INDEX 231 232 233 234 IV VI GLOSSARY GRAPHS AND TABLES CONTACTS MULTI-YEAR REVIEW EVENTS

  • Page 245
    ...INDEX A Advertising mail 54 f. Air freight 21, 30, 62 ff., 103 f., 108 Annual General Meeting 23 ff., 39, 115 ff., 124, 127 f., 134 f., 172 Articles of Association 23 ff., 134 Auditor's report 116, 228 Authorised capital 24, 172 B Balance sheet 48, 141, 156 f., 166 ff. Board of Management 16 f., 22...

  • Page 246
    ... calculation of taxes, duties and excises on behalf of the customer. Day Definite Delivery of shipments on a specified day. Dialogue marketing Market-orientated activities that apply direct communications to selectively reach target groups using a personal, individualised approach. dhl Solutions...

  • Page 247
    ...56 supply chain: revenue by region, 2010 Non-Financial Performance Indicators a.57 Number of employees (continuing operations) a.58 Employees by region, 2010 a.59 Illness rate a.60 Occupational safety a.62 Gender distribution in top management, 2010 a.63 Work-life balance C 70 71 72 72 Consolidated...

  • Page 248
    ...98 80 e-mail: pressestelle @deutschepost.de Internal GeT and dhl Webshop Mat. no. 675-601-530 Publication English translation Published on 10 March 2011. Deutsche Post Corporate Language Services et al. The English version of the Annual Report 2010 of Deutsche Post DHL constitutes a translation...

  • Page 249
    ... Business Services Conference (London) ubs Transport Conference (London) ubs Best of Germany Conference (New York) Sanford C. Bernstein's Strategic Decisions Conference (London) UniCredit German Investment Conference (Munich) 1) Further dates, updates as well as information on live webcasts dp-dhl...

  • Page 250
    ...until 2007: Corporate Center / Other and Consolidation) Consolidation Continuing operations Discontinued operations Total Profit / loss from operating activities (ebit) mail express logistics global forwarding, freight supply chain financial services services Divisions total Corporate Center / Other...

  • Page 251
    ...Williams Lea. From 2008: see Management Report, page 49. 11) Net debt / net debt and equity (from 2004 including non-controlling interests). 12) Net debt / cash ï¬,ow from operating activities. 13) The weighted average number of shares for the period was used for the calculation. 14) Cash ï¬,ow from...

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