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TAILOR MADE
2013 Annual Report

Table of contents

  • Page 1
    2013 Annual Report TAILOR MADE

  • Page 2
    Title and this page: DHL also logistically supports the well-known German fashion designer Michael Michalsky. He has even designed a collection made of packaging materials.

  • Page 3
    ..., the Group's good financial position is also demonstrated by the favourable refinancing conditions we were offered on the capital market. For instance, in the reporting year we renewed a long-term credit facility early and at more favourable terms; we also issued two bonds with a total volume of...

  • Page 4
    ... General Meeting that the dividend we pay to you be raised to â,¬0.80 per share. This represents a payout of around 49 % of adjusted net profits. In the current financial year, we expect slight economic expansion at best. The global trading volumes relevant to our business are expected to perform...

  • Page 5
    ... their computer or on their smartphone. E-commerce and the B2C business associated with it will continue to boost our parcel business and open up many possibilities even beyond the 2015 strategic perspective. DR FRANK APPEL CHIEF EXECUTIVE OFFICER MARCH 2014 Deutsche Post DHL 2013 Annual Report 3

  • Page 6
    ...OF FASHION LOGISTICS DHL OFFICIAL LOGISTICS PARTNER FOR FASHION WEEKS On with the show: DHL ensures every item of clothing makes it to the catwalk on time. DHL provides the fashion industry with logistics solutions that go above and beyond standard service. 4 Deutsche Post DHL 2013 Annual Report

  • Page 7
    Deutsche Post DHL 2013 Annual Report 5

  • Page 8
    ... fleet. And when time is of the essence, Mauro doesn't hesitate in sending a special courier. This is how DHL ensures that all items reach their destination at the time the customer chooses - regardless of whether it's within hours, same day or the next day. 6 Deutsche Post DHL 2013 Annual Report

  • Page 9
    ..., DHL helped him to penetrate the international market, understand the customs clearance process and transport his collections. The young designer wishes to meld the best of both worlds from Asia and Europe in his fashions. And who better to bring it all together than a global logistics company with...

  • Page 10
    ...of two founders of the Rheingold institute for qualitative market and media research in Cologne, Germany. His new book, "Die erschöpfte Gesellschaft" (the exhausted society) was published in 2013. 10,780 Clothing 2,520 Computer and accessories 2,590 Books 8 Deutsche Post DHL 2013 Annual Report

  • Page 11
    ... mail-order revenue, 2012, by goods category in Germany (â,¬ m) Source: BHV 1,510 1,920 Furniture and decorations Textiles (excluding clothing) 960 Consumer electronics 1,620 Household appliances 1,880 Shoes 2,500 Hobby, collecting and leisure articles 9 Deutsche Post DHL 2013 Annual Report

  • Page 12
    ... of Zalando's dispatches and the majority of its returns. "Our services make us an ideal partner for Zalando," explains Katja Herbst, Chief Sales Officer at DHL Paket. "We've been working together for years and we share a common goal: satisfied customers." 10 Deutsche Post DHL 2013 Annual Report

  • Page 13
    ..., bringing parcels full of shoes and clothing. As soon as these advertisements hit television screens, the click rate on the home page shoots up - as does the number of orders. The Deutsche Post DHL courier plays a leading role in Zalando advertisements. Deutsche Post DHL 2013 Annual Report 11

  • Page 14
    ...Our new services put online shops in the position to offer their customers even faster and more convenient parcel delivery options," says Andrej Busch, CEO DHL Paket. Zalando expands into Europe Zalando is benefiting here, too, and is now extending its successful co-operation with Deutsche Post DHL...

  • Page 15
    ... the DHL app. dhl.de/mobil All services are available throughout Germany. DHL Paketshops Paketshops offer our customers another alternative when mailing parcels, small packages and returns. Opening hours are flexible and customers do not have to queue to post a parcel. dhl.de/paketshop Post office...

  • Page 16
    ..., responsiveness and control in the supply chain is greater than ever before. The paper's author, Lisa Harrington of the strategic supply chain consulting firm lharrington group LLC, sees a number of trends that are radically changing the fashion landscape. Increasing fluidity between online and...

  • Page 17
    ... information can cost both time and money. Thanks to years of experience and its sophisticated supply chain management systems, DHL protects b MORE THAN TRANSPORT AND WARE­ HOUSING DHL is a full service provider offering exclusive and customised value-added services to their fashion customers...

  • Page 18
    ... Deutsche Post is Europe's largest postal service provider, the market leader on the German letter and parcel market and has a leading position in international mail. Its portfolio ranges from standard products to environmentally-friendly and tailored solutions for consumers and business customers...

  • Page 19
    ..., DHL is the market leader in the international logistics industry. With a global network and local expertise as well as a commitment to service and quality we provide solutions tailored to customer requirements in more than 220 countries and territories. EXPRESS Products Time Definite Same Day Day...

  • Page 20
    a b c d GROUP MANAGEMENT REPORT 19 - 106 CORPORATE GOVERNANCE 107 - 132 CONSOLIDATED FINANCIAL STATEMENTS 133 - 214 FURTHER INFORMATION 215 - 224

  • Page 21
    ...GROUP MANAGEMENT REPORT 21 43 71 74 87 88 101 General Information Report on Economic Position Deutsche Post Shares Non-Financial Figures Post-Balance-Sheet Date Events Opportunities and Risks Expected Developments Contents b c CORPORATE GOVERNANCE Report of the Supervisory Board Supervisory Board...

  • Page 22
    ...- Consolidated net profit for the period 2 Operating cash flow Net debt 3 Return on equity before taxes Earnings per share Dividend per share Number of employees 1 2 3 4 5 6 EBIT / revenue. After deduction of non-controlling interests. Prior-year amount adjusted Calculation Group Management Report...

  • Page 23
    GROUP MANAGEMENT REPORT 19 - 106 a a Group ManaGeMent report

  • Page 24
    ...operations Financial position Net assets Business performance in the divisions DEUTSCHE POST SHARES NON-FINANCIAL FIGURES Employees Health and safety Corporate responsibility Procurement Customers and quality Brands POST-BALANCE-SHEET DATE EVENTS OPPORTUNITIES AND RISKS Overall Board of Management...

  • Page 25
    ...-of-a-kind portfolio of logistics (DHL) and communications (Deutsche Post) services. We provide our customers with both easy to use standardised products as well as innovative and tailored solutions ranging from dialogue marketing to industrial supply chains. About 480,000 employees in more than 220...

  • Page 26
    ...Lawrence Rosen Functions • Corporate Controlling • Corporate Finance • Global Business Services: Procurement, Real Estate, Finance Operations, Legal Services, etc. • Investor Relations • Corporate Accounting & Reporting • Corporate Audit & Security • Taxes Human Resources Board member...

  • Page 27
    ... globe Deutsche Post DHL operates around the world. The map shows our most important locations. Table A.02 provides an overview of market volumes in key regions. Our market shares are detailed in the business units and market positions chapter. a.02 Market volumes 1 Global Air freight (2012): 24m...

  • Page 28
    General Information Business units and market positions Group Management Report Business units and market positions MAIL DIVISION The postal service for Germany a.03 Domestic mail communication market, business customers, 2013 Market volume: â,¬4.5 billion 35.3 % Competition 64.7 % Deutsche ...

  • Page 29
    ...mail-order and parcel services businesses. Overall, our market share in the reporting year was approximately 42.3 %. Sending mail and parcels internationally 88.6 % Competition Source: company estimate. a.06 Domestic parcel market, 2013 Market volume: â,¬8.2 billion 42.3 % DHL 57.7 % Competition...

  • Page 30
    General Information Business units and market positions Group Management Report EXPRESS DIVISION Leading provider of international express services In the EXPRESS division, we transport urgent documents and goods reliably and on time from door to door. Our network spans more than 220 countries ...

  • Page 31
    ...began work at the end of 2013 to double the capacity of our global hub in Leipzig, Germany. With improved service quality, we intend to strengthen our position at this strategically important location. Geared for growth in the Americas 41 % DHL 1 2 3 Includes the TDI express product. Country base...

  • Page 32
    ... in the previous year, we remained the second-largest provider of ocean freight services in 2013. Growth remains slow in European road freight market 3.4 % DB Schenker 1 2 Country base: total for 19 European countries, excluding bulk and specialities transport. 2011 and 2012 figures have been...

  • Page 33
    Group Management Report General Information Business units and market positions SUPPLY CHAIN DIVISION Customer-centric outsourcing solutions in two business units In our SUPPLY CHAIN division, DHL provides warehousing, managed transport and value-added services at every link in the supply chain ...

  • Page 34
    ...parts of the world. Our offering takes account of steadily rising cost pressure whilst meeting the high quality standards of our customers. The Automotive industry is one of our truly global sectors. Production is shifting increasingly to emerging markets such as China, India and Brazil, in which we...

  • Page 35
    ...companies 2013" also reflects how satisfied customers and employees are with Deutsche Post DHL: we come out top in our industry. In 2014 we shall focus primarily on increasing profitability and generating cash. a.16 Strategic approaches Divisional focus MaIL eXpress GLoBaL ForWarDInG, FreIGHt suppLY...

  • Page 36
    ... costs. Our Parcel 2012 Production Concept has made our sorting and transport more efficient and thereby lowered costs. Providing the highest quality to our customers: We want to offer our customers the best service at all times, at the highest level of quality and at reasonable prices. To this end...

  • Page 37
    ... Management Report General Information Objectives and strategies Tapping into new online and offline markets: We are taking advantage of our expertise in physical communications to offer competent digital communications. The internet is already strongly facilitating customer access to our services...

  • Page 38
    ... leading position. To achieve this goal, we pursue several approaches: Developing new customer solutions: We are constantly developing new products and services to meet the needs of all of our customers. In the reporting year, we were the first company in our industry to introduce a tool that tracks...

  • Page 39
    ... supply chain solutions and which we use to shorten repair cycles and thus notably reduce our technology customers' warehouse and transport costs. Thus far, in addition to Technical Services, we have replicated the following strategic products worldwide: Airline Business Solutions, E-Fulfilment...

  • Page 40
    ...pensions and similar obligations) • Trade payables (part of net working capital) • Other non-recurring operating liabilities Net asset base Since 2008, the Group has used EBIT after asset charge (EAC) as an additional key performance indicator. EAC is calculated by subtracting a cost of capital...

  • Page 41
    Group Management Report General Information Group management Preserving sufficient liquidity a.21 Calculation of operating cash flow Consolidated net profit for the period attributable to shareholders and non-controlling interests Income taxes Net financial income / net finance costs Net income ...

  • Page 42
    ... shares. Members of the Board of Management receive stock appreciation rights (SAR s) each year as a long-term remuneration component under the Long-Term Incentive Plan provided that they each invest cash or Deutsche Post AG shares for each tranche of the plan. If a Board of Management member sells...

  • Page 43
    ...-back of shares The Board of Management is authorised, subject to the consent of the Supervisory Board, to issue up to 240 million new, no-par value registered shares on or before 28 May 2018 in exchange for cash and / or non-cash contributions and thereby increase the company's share capital by up...

  • Page 44
    General Information Disclosures required by takeover law Group Management Report An AGM resolution was passed on 29 May 2013 authorising the Board of Management, subject to the consent of the Supervisory Board, to issue bonds with warrants, convertible bonds and / or income bonds as well as profit...

  • Page 45
    ... the opportunity to structure share repurchase in an advantageous manner. The authorisation to use shares for the purpose of listing on a foreign stock exchange is intended to enable the company to expand its shareholder base to foreign countries in line with its global orientation. Any public offer...

  • Page 46
    ... Management Report. Corporate Governance, page 123 ff. Research and development As a service provider, the Group does not engage in research and development activities in the narrower sense and therefore has no significant expenses to report in this connection. 42 Deutsche Post DHL 2013 Annual...

  • Page 47
    ...business in Germany resulted in MAIL division earnings at the upper end of our forecast. Performance in the DHL divisions was impeded by major currency effects. Although revenue was lower, the EXPRESS and SUPPLY CHAIN divisions were able to increase earnings through strict cost management. Operating...

  • Page 48
    ... year: 3.1 %). Global trade increased slightly with a rise of nearly 3 % (IMF: 2.7 %; OECD: 3.0 %). a.23 Global economy: growth indicators in 2013 % China Japan USA Euro zone Germany Data partially estimated, as at 5 February 2014. Sources: Postbank, national statistics. Gross domestic product...

  • Page 49
    ... to 0.25 % until the unemployment rate falls below 6.5 % at the earliest. In December, however, the US Fed decided to slightly reduce the volume of purchases of government bonds and mortgage-backed securities in order to give the economy an additional boost. Deutsche Post DHL 2013 Annual Report 45

  • Page 50
    ...reporting year. The main consequence of the low demand for goods was a decline in European imports. Trade between emerging markets in the Asia Pacific, Latin America and Middle East /Africa regions continued to increase, however. a.25 Trade volumes: compound annual growth rate 2012 to 2013 % Imports...

  • Page 51
    Group Management Report Report on Economic Position Economic parameters A.26 Major trade flows: 2013 volumes Million tonnes Europe 2,532 North America 474 Asia Pacific 2,960 MEA 268 Latin America 237 Intra-regional More than 300 300 to 100 Less than 100 North America Exports 70 322 150 ...

  • Page 52
    ..., financial position and results of operations in financial year 2013. Results of operations a.27 Selected indicators for results of operations 2012 2013 Revenue Profit from operating activities (EBIT) Return on sales 1 Consolidated net profit for the period 2 Earnings per share 3 Dividend per...

  • Page 53
    ... Management Report Report on Economic Position Results of operations We acquired RISER ID Services GmbH, the market leader in electronic address registration information services, at the end of July. The company complements the range of digital address verification services offered by the MAIL...

  • Page 54
    ... of net profits as dividends as a general rule. At the Annual General Meeting on 27 May 2014, the Board of Management and the Supervisory Board will therefore propose a dividend of â,¬0.80 per share for financial year 2013 (previous year: â,¬0.70) to shareholders. The distribution ratio based on the...

  • Page 55
    ... strategy additionally includes a sustained dividend policy and clear priorities regarding the use of excess liquidity, which is to be used to gradually increase plan assets of our German pension plans as well as paying special dividends or buying back shares. Deutsche Post DHL 2013 Annual Report...

  • Page 56
    ... 34.4 To improve comparability, the figures take the transition to the new IAS 19 standard into account. Surplus cash and near-cash investments are defined as cash and cash equivalents and investment funds callable at sight, less cash needed for operations. 52 Deutsche Post DHL 2013 Annual Report

  • Page 57
    ... reported is contained in the Notes. Cash and liquidity managed centrally Note 4 6 The cash and liquidity of our globally operating subsidiaries is managed centrally by Corporate Treasury. More than 80 % of the Group's external revenue is consolidated in cash pools and used to balance internal...

  • Page 58
    ... also taken into account. Moody's Investors Service has maintained the Group's credit rating of "Baa1" with a positive outlook. Fitch also confirmed its rating of "BBB+" with a stable outlook in the reporting year. This means that the capacity of the Group to meet its financial obligations continues...

  • Page 59
    ... the DHL divisions. Moody's Investors Service Long-term: Baa 1 Short-term: P - 2 Outlook: positive • Scale and global presence as the world's largest logistics company. • Large and relatively robust mail business in Germany. • Success in restoring profitability of logistics activities whilst...

  • Page 60
    ...Financial position Group Management Report Operating leases remain an important source of funding for the Group. We mainly use operating leases to finance real estate, although we also finance aircraft, vehicle fleets and IT equipment. a.38 Operating lease liabilities by asset class â,¬m 2012 2013...

  • Page 61
    ...to cater to increasing shipment volumes. With regard to E-POST, platform functionality was expanded. Furthermore, we maintained our production facilities and infrastructure, and equipped our mail and parcel operations with new hand scanners. eXpress invests in markets with rising customer demand In...

  • Page 62
    ... Position Financial position Group Management Report a.43 Operating cash flow by division, 2013 â,¬m MAIL 940 EXPRESS 1,471 GLOBAL FORWARDING, FREIGHT 649 SUPPLY CHAIN 637 Operating cash flow firmly in positive territory Net cash from operating activities amounted to â,¬2,994 million in 2013...

  • Page 63
    Group Management Report Report on Economic Position Financial position a.45 Calculation of free cash flow â,¬m 2012 2013 Q 4 2012 Q 4 2013 Net cash used in / from operating activities Sale of property, plant and equipment and intangible assets Acquisition of property, plant and equipment and ...

  • Page 64
    ... Group Management Report Net assets a.46 Selected indicators for net assets 2012 2013 Equity ratio 1 Net debt Net interest cover FFO to debt 2 1 2 % â,¬m % 27.3 1,952 10.7 28.9 28.3 1,481 23.1 34.4 Prior-year amount adjusted. Financial position, page 52. Calculation Consolidated total...

  • Page 65
    ...in a trust account (â,¬298 million), amongst other things. The equity ratio improved by one percentage point to 28.3 %. The dynamic gearing ratio is an indicator of internal financing capacity and expresses the average number of years a company would require to pay off its outstanding debt using the...

  • Page 66
    ... of which Mail Communication Dialogue Marketing Press Services Parcel Germany Retail Outlets Global Mail Pension Service Consolidation / Other Profit from operating activities (EBIT) Return on sales (%) 1 Operating cash flow eXpress Revenue of which Europe Americas Asia Pacific MEA (Middle East and...

  • Page 67
    ... the reporting year by 6.3 % from â,¬5,284 million to â,¬5,619 million. A further price increase was approved for 2014. a.49 Mail Communication: volumes mail items (millions) 2012 2013 +/- % Q 4 2012 Q 4 2013 +/- % Glossary, pag e 218 Business customer letters Private customer letters Total 6,403...

  • Page 68
    ... our services. a.51 Parcel Germany: volumes parcels (millions) 2012 2013 +/- % Q 4 2012 Q 4 2013 +/- % Business customer parcels 1 Private customer parcels Total 1 835 120 955 902 124 1,026 8.0 3.3 7.4 244 40 284 261 41 302 7.0 2.5 6.3 Including intra-group revenue. Retail outlets increase...

  • Page 69
    ...uniform exchange rates. These revenues are also the basis for the weighted calculation of working days. a.54 eXpress: volumes by product Thousands of items per day 1 Time Definite International (TDI) Time Definite Domestic (TDD) 1 2012 adjusted 2013 +/- % Q 4 2012 adjusted Q 4 2013 +/- % 596...

  • Page 70
    ... on Economic Position Business performance in the divisions Group Management Report Volumes in the Americas region see final-quarter double-digit increases In the reporting year, revenue in the Americas region amounted to â,¬2,259 million - slightly below the previous year's figure of â,¬2,276...

  • Page 71
    Group Management Report Report on Economic Position Business performance in the divisions GLOBAL FORWARDING, FREIGHT DIVISION Freight forwarding business profitable in weak market Revenue in the division decreased by 5.3 % to â,¬14,838 million in the reporting year (previous year: â,¬15,666 ...

  • Page 72
    ... in 2013 (previous year: â,¬4,192 million). In addition to the effect of one additional working day, business grew primarily in Germany, Eastern Europe, the Benelux countries and France. Despite continuing pressure on margins in the highly competitive European transport market, gross profit was...

  • Page 73
    ... lower volumes in the banking and legal sectors, as well as some contract losses. New business worth around â,¬1,520 million secured a.58 suppLY CHaIn: revenue by region, 2013 Total revenue: â,¬14,277 million 14 % Asia Pacific / Middle East/Africa 1 28 % Americas 58 % Europe/Other / Consolidation...

  • Page 74
    ...178 million (previous year, adjusted: â,¬116 million), benefitting from the above-mentioned one-time effects and improved business performance. Operating cash flow for the reporting year increased to â,¬637 million, from â,¬432 million in the previous year. 70 Deutsche Post DHL 2013 Annual Report

  • Page 75
    ... 2011 2012 2013 Year-end closing price High Low Number of shares Market capitalisation as at 31 December Average trading volume per day Annual performance including dividends Annual performance excluding dividends Beta factor 2 Earnings per share 3 Cash flow per share 4 Price-to-earnings ratio...

  • Page 76
    ... the third consecutive year. Deutsche Post shares were also the second-strongest stock in Germany's leading index as well as in the EURO STOXX 50 at the end of 2013. Average daily Xetra trading volumes remained at the prior-year level at 4.1 million shares. 72 Deutsche Post DHL 2013 Annual Report

  • Page 77
    ...of institutional investors in Germany rose to 12.3 % (previous year: 11.7 %). Our 25 largest institutional investors hold a total of 30.5 % of all issued shares. Focused capital markets communication recognised As at 31 December 2013. a.63 Shareholder structure by region 1 13.8 % USA 14.8 % UK 26...

  • Page 78
    ... Deutsche Post DHL not only wants to be an attractive investment for shareholders, it also wants to become the employer of choice for employees and the provider of choice for customers. Our services in the areas of Hr, diversity, health management, occupational safety, service and quality play a key...

  • Page 79
    ... planning foresees another slight increase in the number of employees in financial year 2014. a.66 Employees by region, 2013 1 4 % Other 15 % Asia Pacific 18 % Americas 24 % Europe (excluding Germany) 39 % Germany 1 As at 31 December; full-time equivalents. Deutsche Post DHL 2013 Annual Report...

  • Page 80
    Non-Financial Figures Employees Group Management Report Staff costs at prior-year level Note 14 At â,¬17,785 million, staff costs remained at the prior-year level (â,¬17,770 million). a.67 Staff costs and social security benefits â,¬m 2012 2013 Wages, salaries and compensation 1 Social security ...

  • Page 81
    ... express and postal services specialists 1 Number of apprentices, annual average: 4,935. Group-wide Idea Management boosts our innovative strength and improves our ability to compete in the market. Employees in 37 countries are now able to participate. A.69 Idea management 2012 2013 Suggestions...

  • Page 82
    ...entire community. We focus on prevention in order to address risks which could impact health and productivity - aiming to limit an increase in insurance and treatment costs in the process. In Germany, for example, we have for many years employed a management system that uses local Health Work Groups...

  • Page 83
    Group Management Report Non-Financial Figures Health and safety Corporate responsibility a.74 Occupational safety 1 2012 3 2013 4 Number of workplace accidents 2 Accident rate (number of accidents per 1,000 employees per year) Number of working days lost due to accidents (calendar days) Working ...

  • Page 84
    ... (Scope 1) in meeting demand. This reflects the EXPRESS division's above-average performance. At the same time, we have avoided 0.5 million tonnes of CO2 e by using electricity from renewable sources. a.76 Fuel and energy consumption 2012 2013 Consumption by fleet Air transport (jet fuel) Road...

  • Page 85
    ..., 2013 Volume: â,¬9.4 billion 8 % Production systems 8 % Network supplies 10 % Air fleet 10 % Real estate 13 % Ground fleet 13 % Transport services 14 % IT and communications 24 % Services In the year under review, the Group centrally purchased goods and services with a total value of approximately...

  • Page 86
    ...services, Procurement works closely together with those responsible for the various product categories and regions in order to take environmental aspects into consideration. Our goal is to increase the proportion of energy we consume from renewable resources and over the course of the reporting year...

  • Page 87
    ... Management Report Non-Financial Figures Customers and quality Customers and quality Innovative technology translates into competitive advantage in the mail and parcel business We operate a first-class, efficient and environmentally friendly nationwide transport and delivery network in Germany...

  • Page 88
    ... and quality Group Management Report Service quality translates into competitive advantage in the express business We want to offer our customers the best possible service quality all around the world and therefore place high demands on our products, processes, infrastructure and employees...

  • Page 89
    Group Management Report Non-Financial Figures Customers and quality Brands Quality translates into competitive advantage in the supply chain business In line with our Group strategy, we also want to be the provider of choice in the SUPPLY CHAIN division. We therefore implement practices and ...

  • Page 90
    ... digital strategy for the DHL brand that was developed in the previous year, we have set our global marketing campaign on a new online course: since the autumn of 2013, we have, for example, advertised our online benchmarking tool on banners in international business magazines. A tool which provides...

  • Page 91
    ... Authorised Capital 2013 by 656,915 no par-value shares in order to service the 2009 tranche of the share-based payment system for executives (Share Matching Scheme) due on 1 April 2014. The planned dividend payment will increase by â,¬525,532 as a result. Deutsche Post DHL 2013 Annual Report 87

  • Page 92
    ... Group Management Report OPPORTUNITIES AND RISKS Overall Board of Management assessment of opportunity and risk situation No foreseeable risk to the Group Financial position, page 54 f. Identifying opportunities and risks - and swiftly capitalising upon or counteracting them - is an important...

  • Page 93
    ...Control Review results 5 Review measures Monitor early warning indicators 3 Overall strategy / risk management / compliance Determine Manage 4 Operating measures Plan Implement Divisions Opportunity and risk-controlling processes Board of Management Internal auditors 1 2 The most important...

  • Page 94
    ...a central location where one-step consolidation is performed. Other components of our control system include automatic plausibility reviews and system validations of the accounting data. In addition, manual checks are carried out regularly at a decentralised 90 Deutsche Post DHL 2013 Annual Report

  • Page 95
    ... responsible locally (by a chief financial officer, for example) and at a central level by Corporate Accounting and Reporting, Taxes and Corporate Finance at the Corporate Center. Over and above the aforementioned internal accounting control system and risk management structures, Corporate Internal...

  • Page 96
    ... new business potential: with our own mail, parcel and express products as well as air and ocean freight transport, we not only lead our industry in the areas of energy-efficient transport, transparent emissions reports and climate-neutral products, but we also offer customer-specific solutions...

  • Page 97
    ..., we consider this opportunity to be of low relevance. Further information on the financial position and finance strategy of the Group as well as on the management of financial risks is found in the report on the economic position and in the Notes. Note 5 0 Deutsche Post DHL 2013 Annual Report 93

  • Page 98
    ... the parcel business, for example, as a result of an increase in online purchasing amongst consumers. Companies might also be forced to outsource transport services in order to lower costs. Cyclical risks can affect our divisions differently with respect to magnitude as well as point in time, which...

  • Page 99
    ... Management Report Opportunities and Risks Risks Deutsche Post and DHL are in competition with other providers. Such competition can significantly impact our customer base as well as the levels of prices and margins in our markets. In the mail and logistics business, the key factors for success...

  • Page 100
    ... from human resources Employees, page 76 Health and safety, page 78 f. It is the motivation and competence of our employees that make a good impression on our customers and thus shape our long-term success. Demographic change and increased competition for qualified specialists and executives mean...

  • Page 101
    ... credit line of â,¬2 billion. Therefore, the Group's liquidity is sound in the short and medium term. Moreover, the Group enjoys open access to the capital market on account of its good ratings within the industry, and is well positioned to secure long-term capital requirements. The Group's net debt...

  • Page 102
    ... to the trustee on 2 January 2013 and 2 January 2014, respectively. The payments made were reported in the balance sheet under non-current assets; the earnings position remained unaffected. The European Commission has not expressed its final acceptance of the calculation of the state aid to be...

  • Page 103
    ... our range of electronic communications services, securing our standing as the quality leader and, where possible, making our transport and delivery costs more flexible. We follow developments in the market very closely and take these into account in our earnings projections. For the specified...

  • Page 104
    ... business and to grow in our most important markets and customer segments. We do not see any significant strategic risk for the SUPPLY CHAIN division beyond that reported in the section entitled "Risks arising from market and sector-specific conditions". 100 Deutsche Post DHL 2013 Annual Report

  • Page 105
    ... to 2014 The information contained in the report on expected developments generally refers to financial year 2014. However, in some instances we have chosen to extend the scope. Future organisation Parts of parcel business outside Germany consolidated in mail business Our domestic parcel business...

  • Page 106
    ...economic parameters Group Management Report a.82 Global economy: growth forecast % 2013 2014 World trade volumes Real gross domestic product World Industrial countries Emerging markets Central and Eastern Europe CIS countries Emerging markets in Asia Middle East and North Africa Latin America and...

  • Page 107
    ... our revenue. In future, we also plan to increase the number of digital products we offer. The international mail market again benefited from the growing e-commerce sector. This is an area in which we aim to tap into new business related to our core competency: mail, parcels and small packages...

  • Page 108
    ...in the reporting year, we expect European road transport volumes to grow slightly at best or even stagnate in 2014, which reflects the unaltered moderate economic forecasts for the region. Supply Chain market remains robust The trend towards outsourcing warehouse and distribution services continues...

  • Page 109
    Group Management Report Expected Developments Revenue and earnings forecast Expected financial position Our finance strategy calls for a payout of 40 % to 60 % of net profits as dividends as a general rule. At the Annual General Meeting on 27 May 2014, we intend to propose to the shareholders that...

  • Page 110
    ... basis as an additional non-financial indicator relevant for internal management. This Annual Report contains forward-looking statements that relate to the business, financial performance and results of operations of Deutsche Post AG. Forward-looking statements are not historical facts and may...

  • Page 111
    CORPORATE GOVERNANCE 107 - 132 b b Corporate GovernanCe

  • Page 112
    ...CORPORATE GOVERNANCE REPORT OF THE SUPERVISORY BOARD SUPERVISORY BOARD Members of the Supervisory Board Committees of the Supervisory Board BOARD OF MANAGEMENT MANDATES Mandates held by the Board of Management Mandates held by the Supervisory Board CORPORATE GOVERNANCE REPORT Remuneration report

  • Page 113
    ... DEAR SHAREHOLDERS, In the 2013 financial year, Deutsche Post DHL performed well in what continued to be a challenging economic environment in its capacity as provider, investment and employer of choice in its market. Advising and overseeing the Board of Management In 2013, the Supervisory Board...

  • Page 114
    ... rate exceeded 90 %. At the financial statements meeting on 4 March 2013, with the auditors in attendance, the annual and consolidated financial statements and the management reports for 2012 were discussed in detail and approved. After a thorough review, we endorsed the Board of Management...

  • Page 115
    ...to the members of the Board of Management or the Supervisory Board during 2013. At the Deutsche Post AG AGM on 29 May 2013, I was re-elected as a shareholder representative on the Supervisory Board. The end of the AGM also marked the start of a new term of office for the Supervisory Board's employee...

  • Page 116
    ... success. The Supervisory Board is confident that the Group is well on the way to ensuring that it remains profitable in the long term, building on its strong position in the market. Bonn, 11 March 2014 The Supervisory Board Wulf von Schimmelmann Chairman 112 Deutsche Post DHL 2013 Annual Report

  • Page 117
    Corporate Governance Supervisory Board SUPERVISORY BOARD B.01 Members of the Supervisory Board Shareholder representatives Prof. Dr Wulf von Schimmelmann (Chair) Former CEO of Deutsche Postbank AG Hero Brahms Management consultant Werner Gatzer State Secretary, Federal Ministry of Finance Prof. Dr...

  • Page 118
    ...Corporate Governance BOARD OF MANAGEMENT KEN ALLEN EXPRESS Born in 1955 Member since February 2009 Appointed until February 2017 BRUCE EDWARDS SUPPLY CHAIN Born in 1955 Member since March 2008 Appointed until March 2016 ROGER CROOK GLOBAL FORWARDING, FREIGHT Born in 1957 Member since March 2011...

  • Page 119
    Corporate Governance Board of Management DR FRANK APPEL CHIEF EXECUTIVE OFFICER Born in 1961 Member since November 2002, CEO since February 2008 Appointed until October 2017 LAWRENCE ROSEN FINANCE, GLOBAL BUSINESS SERVICES Born in 1957 Member since September 2009 Appointed until August 2017 JÜ...

  • Page 120
    ...Sinotrans International Air Courier Ltd 1, China (Board of Directors) Roger Crook DHL Global Forwarding Management (Asia Pacific) Pte Ltd 1, Singapore (Board of Directors) Bruce Edwards Ashtead plc, UK (Board of Directors) Greif, Inc., USA (Board of Directors) Williams Lea Group Limited 1, UK (Board...

  • Page 121
    ...) In this Annual Corporate Governance Statement, the company presents the main components of Deutsche Post DHL's corporate governance structure. These include the Declaration of Conformity from the Board of Management and the Supervisory Board, significant corporate governance practices that exceed...

  • Page 122
    ...in Management Positions" project was started. The Supervisory Board supports the Group's diversity strategy, with a particular focus on the objective of increasing the number of women on the Board of Management. It sees the efforts for greater diversity as being part of long-term succession planning...

  • Page 123
    ... of the company. It is appointed, overseen and advised by the Supervisory Board. In addition to the board departments of the Chief Executive Officer (CEO), the CFO and the Board Member for Human Resources, the Board of Management also includes the operating board departments of MAIL, EXPRESS, GLOBAL...

  • Page 124
    ...the MAIL division, the crossdivisional DHL Executive Committee is in charge of the EXPRESS, GLOBAL FORWARDING, FREIGHT and SUPPLY CHAIN divisions, and the CC & GBS Executive Committee covers the Corporate Center (CC) and Global Business Services (GBS). The CEO, the CFO and the Board Member for Human...

  • Page 125
    ... the accounting process, the effectiveness of the internal control system, the risk management and internal auditing systems as well as the financial statement audit. It examines questions of compliance, discusses the half-yearly and quarterly financial reports with the Board of Management before...

  • Page 126
    ... of the Finance and Audit Committee, will not be standing for re-election due to the specified upper age limit. In putting forward its nominations, the Supervisory Board has set itself the goal of increasing the proportion of women on the Supervisory Board. 122 Deutsche Post DHL 2013 Annual Report

  • Page 127
    ... at the end of each month. Fringe benefits mainly comprise the use of company cars, supplements for insurance premiums and special allowances and benefits for assignments outside the home country. The variable remuneration paid to the Board of Management is almost entirely medium and long-term based...

  • Page 128
    ...shares for the five trading days preceding the exercise date and the exercise price of the SAR. In 2013, the members of the Board of Management each made a personal financial investment consisting of 10 % of their annual base salary. The waiting period for the stock appreciation rights is four years...

  • Page 129
    ... fringe benefits (severance payment cap). The severance payment cap is calculated without any special remuneration or the value of rights allocated from long-term incentive plans. In the event of a change in control, any member of the Board of Management is entitled to resign their office for good...

  • Page 130
    ... to the Group Board of Management in 2013: cash components â,¬ Non-performance related Performance related Share of annual bonus transferred to medium-term component (2013) 1 Board members Annual base salary Fringe benefits Annual bonus Payout from medium-term component (2011) Total Dr Frank...

  • Page 131
    ... paid to the Group Board of Management in 2012: cash components â,¬ Non-performance related Performance related Payment from medium-term component (2010) Share of annual bonus transferred to medium-term component 2 Board members Annual base salary Fringe benefits Annual bonus Total Dr Frank...

  • Page 132
    ... plan, the company credits an annual amount of 35 % of the annual base salary to a virtual pension account for the Board of Management member concerned. The maximum contribution period is 15 years. The pension capital accrues interest at an annual rate equal to the "iBoxx Corporates AA 10+ Annual...

  • Page 133
    ... Governance Corporate Governance Report Remuneration report B.11 Board of Management pension commitments under the new system in financial year 2013: individual breakdown â,¬ Total contribution for 2013 Present value (DBO) as at 31 Dec. 2013 Service cost for pension obligation, financial year 2013...

  • Page 134
    ... remuneration component will fall due for payment as at the end of the 2016 AGM after determination of the consolidated net profit per share for financial year 2015. The AGM resolved on 29 May 2013 to modify the Supervisory Board remuneration as at 1 January 2014 and accordingly amended section 17...

  • Page 135
    ... for financial year 2011 falls due for payment as at the end of the 2014 AGM if the consolidated net profit per share for financial year 2013 exceeds the consolidated net profit per share for financial year 2010. Since this condition was not met, no performance-related remuneration with a long-term...

  • Page 136
    Corporate Governance Report Remuneration report Corporate Governance In addition, the variable remuneration for financial year 2010 was paid out in the previous year (2012) in the amount of â,¬465,000, of which â,¬41,875 was to Board members who have now left the company and â,¬423,125 to active ...

  • Page 137
    CONSOLIDATED FINANCIAL STATEMENTS 133 - 214 c c Co nsolidated FinanCial statements

  • Page 138
    ... and impairment losses Other operating expenses Net income from associates Net other finance costs Income taxes Consolidated net profit for the period Non-controlling interests Earnings per share Dividend per share RESPONSIBILITY STATEMENT INDEPENDENT AUDITOR'S REPORT BALANCE SHEET DISCLOSURES 24...

  • Page 139
    Consolidated Financial Statements Income Statement C.01 INCOME STATEMENT 1 January to 31 December â,¬m Note 2012 adjusted 1 2013 Revenue Other operating income Total operating income Materials expense Staff costs Depreciation, amortisation and impairment losses Other operating expenses Total ...

  • Page 140
    ...Comprehensive Income Consolidated Financial Statements C.02 STATEMENT OF COMPREHENSIVE INCOME 1 January to 31 December â,¬m Note 2012 adjusted 1 2013 Consolidated net profit for the period Items that will not be reclassified to profit or loss Change due to remeasurements of net pension provisions...

  • Page 141
    ... assets Trade receivables Other current assets Income tax assets Cash and cash equivalents Assets held for sale Current assets Total assets eQuItY anD LIaBILItIes Issued capital Capital reserves Other reserves Retained earnings Equity attributable to Deutsche Post AG shareholders Non-controlling...

  • Page 142
    ...â,¬m Note 2012 adjusted 1 2013 Consolidated net profit for the period attributable to Deutsche Post AG shareholders Consolidated net profit for the period attributable to non-controlling interests Income taxes Net other finance costs Net income from associates Profit from operating activities (EBIT...

  • Page 143
    ...31 December 2012, adjusted 1 Balance at 1 January 2013 Capital transactions with owner Dividend Transactions with non-controlling interests Changes in non-controlling interests due to changes in consolidated group Issue of shares or other equity instruments Purchase of treasury shares Share Matching...

  • Page 144
    ... a global mail and logistics group. The Deutsche Post and DHL corporate brands represent a portfolio of logistics (DHL) and communication (Deutsche Post) services. The financial year of Deutsche Post AG and its consolidated subsidiaries is the calendar year. Deutsche Post AG, whose registered office...

  • Page 145
    ... customers by automatically sending campaign e-mails. At the end of July 2013, all of the shares of RISER ID Services GmbH, Berlin, were acquired via a subsidiary in which Deutsche Post DHL holds a 51 % interest. The company is a service provider offering electronic address information from public...

  • Page 146
    ... affect the Group's net assets, financial position and results of operations, either individually or in the aggregate. Tag Belgium SA is active in the communications sector and specialises in the design, production and localisation of print media. intelliAd Media GmbH is a bid-management technology...

  • Page 147
    ... 2012. â,¬38 million was paid for companies acquired in previous years. The purchase price for the companies acquired was paid by transferring cash funds. Disposal and deconsolidation effects in 2013 suppLY CHaIn seGMent Deutsche Post DHL completed the sale of the fashion logistics business of DHL...

  • Page 148
    ... at more favourable terms. In addition, two one-year extension options were also agreed. Income from changes to retirement plans Proportionate single-entity financial statement data. Revenue excluding intra-group revenue. The consolidated joint ventures are AeroLogic GmbH, Germany, EV Logistics...

  • Page 149
    ...tax assets may be recognised in Germany; Note 30. Staff costs for financial year 2012 remained unchanged, as the effects relating to net pension provisions and provisions for partial retirement arrangements offset each other. However, net other finance costs narrowed by â,¬29 million. Balance sheet...

  • Page 150
    ... Consolidated Financial Statements Statement of comprehensive income for the period 1 January 2012 to 31 December 2012 â,¬m Consolidated net profit for the period Items that will not be reclassified to profit or loss Change due to remeasurements of net pension provisions Income taxes relating...

  • Page 151
    ... 10 (Consolidated Financial Statements) (12 May 2011) 1 January 2014 These provide clarification on the conditions for offsetting financial assets and liabilities in the balance sheet. A right of set-off must be legally enforceable for all counterparties, both in the normal course of business and...

  • Page 152
    ... on the consolidated financial statements. 1 July 2014 The amendments apply to the recognition of employee contributions to defined benefit retirement plans. Their objective is to simplify accounting for employee contributions that are independent of the number of years of service. In such...

  • Page 153
    ... financial statements of consolidated companies that have been prepared in local currencies are translated at the closing rate as at the balance sheet date. Currency translation differences are recognised in other operating income and expenses in the income statement. In financial year 2013, income...

  • Page 154
    ... Consolidated Financial Statements Useful lives Years 1 Impairment Internally developed software Purchased software Licences Customer relationships 1 up to 5 up to 5 term of agreement up to 20 The useful lives indicated represent maximum amounts specified by the Group. The actual useful...

  • Page 155
    ... 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 and other changes in the equity of the associates attributable to the investments of Deutsche Post AG...

  • Page 156
    ... Basis of preparation Consolidated Financial Statements Loans anD reCeIvaBLes These are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. Unless held for trading, they are recognised at cost or amortised cost at the balance sheet date. The...

  • Page 157
    ... in income under staff costs to reflect the services rendered as consideration during the vesting period (lock-up period). A provision is recognised for the same amount. Retirement plans There are arrangements in many countries under which the Group grants post-employment benefits to its employees...

  • Page 158
    ...Deutsche Post DHL does not account for a significant share of the contributions to the pension funds except for one fund where Deutsche Post DHL is the largest contributor. Contribution rates for one of the multi-employer retirement plans in the Netherlands are determined each year by the management...

  • Page 159
    ...is calculated as the average of the different municipal trade tax rates. Foreign Group companies use their individual income tax rates to calculate deferred tax items. The income tax rates applied for foreign companies amount to up to 38 % (previous year: 41 %). Deutsche Post DHL 2013 Annual Report...

  • Page 160
    ... with defined benefit retirement plans can be found in Note 44. The Group has operating activities around the globe and is subject to local tax laws. Management can exercise judgement when calculating the amounts of current and deferred taxes in the relevant countries. Although management believes...

  • Page 161
    ... basis are eliminated. Intercompany profits or losses from intra-group deliveries and services not realised by sale to third parties are eliminated. Unrealised gains and losses from business transactions with associates are eliminated on a pro rata basis. Deutsche Post DHL 2013 Annual Report 157

  • Page 162
    ... to 31 Dec. 2012 1 2013 2012 1 EXPRESS 2013 GLOBAL FORWARDING, FREIGHT 2012 1 2013 SUPPLY CHAIN 2012 1 2013 Corporate Center / Other 2012 1 2013 Consolidation 2012 1 2013 2012 1 Group 2013 External revenue Internal revenue Total revenue Profit / loss from operating activities (EBIT) Net income from...

  • Page 163
    ... logistics and provides warehousing and transport services as well as value-added services along the entire supply chain in the different sectors. The division also offers end-to-end solutions for corporate information and communications management. The division's business units are Supply Chain and...

  • Page 164
    ... Group / Consolidation 2012 1 2013 Consolidated amount 2012 1 2013 External revenue Internal revenue Total revenue Other operating income Materials expense Staff costs Other operating expenses Depreciation, amortisation and impairment losses Profit / loss from operating activities (eBIt) Net income...

  • Page 165
    ... material Spare parts and repair materials Office supplies Other expenses 1,779 1,364 871 351 80 60 123 4,628 1,829 1,312 848 364 88 65 121 4,627 12 â,¬m Other operating income Cost of purchased services 2012 2013 Transportation costs Cost of temporary staff Expenses from non-cancellable...

  • Page 166
    ... Group for their services in the year under review. Social security contributions relate in particular to statutory social security contributions paid by employers. Retirement benefit expenses include the service cost related to the defined benefit retirement plans. Detailed information can be found...

  • Page 167
    Consolidated Financial Statements Notes Income statement disclosures 16 â,¬m Other operating expenses 17 â,¬m 2012 2013 Net income from associates 2012 2013 Expenses for advertising and public relations Cost of purchased cleaning and security services Travel and training costs Other business...

  • Page 168
    ... in the balance sheet for companies that reported a loss in the previous year or in the current period as, based on tax planning, realisation of the tax asset is probable. In financial year 2013, as in the previous year, German Group companies were not affected by tax rate changes. The change in the...

  • Page 169
    ... the period attributable to Deutsche Post AG shareholders was increased by the amounts spent for the convertible bonds. Diluted earnings per share 20 Consolidated net profit for the period 2012 2013 In financial year 2013, the Group generated a consolidated net profit for the period of â,¬2,211...

  • Page 170
    ... Financial Statements BALANCE SHEET DISCLOSURES 24 â,¬m Intangible assets 24.1 Overview Internally generated intangible assets Purchased brand names Purchased customer lists Other purchased intangible assets Goodwill Advance payments and intangible assets under development Total Cost...

  • Page 171
    Consolidated Financial Statements Notes Balance sheet disclosures 24.2 Allocation of goodwill to CGu s â,¬m 2012 2013 Total goodwill MaIL eXpress GLoBaL ForWarDInG, FreIGHt DHL Global Forwarding DHL Freight suppLY CHaIn DHL Supply Chain Williams Lea 10,922 646 4,092 10,677 667 4,069 3,802 320...

  • Page 172
    Notes Balance sheet disclosures Consolidated Financial Statements 25 â,¬m Property, plant and equipment 25.1 Overview Technical Land equipment and buildings and machinery Other equipment, operating and office equipment Aircraft Vehicle fleet and transport equipment Advance payments and ...

  • Page 173
    Consolidated Financial Statements Notes Balance sheet disclosures 25.2 Finance leases The following assets are carried as non-current assets resulting from finance leases: â,¬m 2012 2013 26 â,¬m Investment property 26.1 Overview 2012 2013 Land and buildings Technical equipment and machinery...

  • Page 174
    ... can be accessed online at www.dpdhl.com/en/investors.html. The following tables show a summary of the aggregate income statements and balance sheets of the associates. The amounts do not relate to the shares attributable to Deutsche Post DHL, but are presented based on a notional 100 % shareholding...

  • Page 175
    ... 2012 2013 Raw materials, consumables and supplies Work in progress Finished goods and goods purchased and held for resale Spare parts for aircraft Advance payments Inventories 184 60 52 25 1 322 183 126 69 21 4 403 â,¬738 million (previous year: â,¬602 million) of the deferred taxes on tax loss...

  • Page 176
    ...need GmbH, Germany - (MAIL segment) DHL Logistics (China) Co. Ltd., China - real estate (SUPPLY CHAIN segment) Cargus International S. R. L., Romania - domestic express business (EXPRESS segment) Deutsche Post Immobilien GmbH, Germany - real estate (Corporate Center / Other) US Express Aviation, USA...

  • Page 177
    ... an industrial site in Pennsylvania. aLL You neeD GMBH In the third quarter of 2013, the Board of Management resolved not to pursue its plan to resell All you need GmbH, Berlin, which was acquired in financial year 2012. The company has been fully consolidated. Detailed information can be found in...

  • Page 178
    ... up to 240 million new, no-par value registered shares until 20 April 2014 in exchange for cash and / or non-cash contributions and thereby increase the company's share capital. Shareholders generally have subscription rights. To date, the Board of Management has not made use of such authorisation...

  • Page 179
    Consolidated Financial Statements Notes Balance sheet disclosures 38.4 Disclosures on corporate capital The equity ratio was 28.3 % in financial year 2013 (previous year, adjusted: 27.3 %). The company's capital is monitored using the net gearing ratio which is defined as net debt divided by the ...

  • Page 180
    ... 2013 for the year 2012 Dividend distributed in financial year 2012 for the year 2011 846 846 0.70 0.70 The dividend is tax-exempt for shareholders resident in Germany. No capital gains tax (investment income tax) will be withheld on the distribution. 176 Deutsche Post DHL 2013 Annual Report

  • Page 181
    ... past service cost was recognised in the reporting year due to an internal change in the conditions for access to certain invalidity benefits. Retirement plans with a similar structure are available to executives below the management board level and to specific employee groups who can make use of...

  • Page 182
    ... Consolidated Financial Statements A wide variety of other defined benefit plans in the Group are to be found in the Netherlands, Switzerland, the USA and a large number of other countries. In the Netherlands, collective agreements require that those employees who are not covered by a sector...

  • Page 183
    Consolidated Financial Statements Notes Balance sheet disclosures 44.2 Present value of defined benefit obligations The present value of defined benefit obligations changed as follows: â,¬m Germany UK Other Total 2013 Present value of defined benefit obligations at 1 January Current service cost...

  • Page 184
    ... way, provided there was a deep market for AA or AAA-rated corporate bonds. By contrast, government bond yields were used for countries without a deep market for such corporate bonds. For the annual pension increases in Germany, agreed rates in particular must be taken into account in addition...

  • Page 185
    Consolidated Financial Statements Notes Balance sheet disclosures 44.3 Fair value of plan assets The fair value of the plan assets changed as follows: â,¬m Germany UK Other Total 2013 Fair value of plan assets at 1 January Interest income on plan assets Return on plan assets excluding interest ...

  • Page 186
    Notes Balance sheet disclosures Consolidated Financial Statements Quoted prices in an active market exist for around 80 % (previous year: 85 %) of the total fair values of plan assets. Most of the remaining assets for which no such quoted market prices exist are attributable as follows: 12 % (...

  • Page 187
    ... benefit amounts. In the case of the UK, the risk has been mitigated by largely closing defined benefit plans, setting a fixed rate of increase, capping increases or providing for lump sum payments. Additionally, there is a positive correlation with interest. Deutsche Post DHL 2013 Annual Report...

  • Page 188
    Notes Balance sheet disclosures Consolidated Financial Statements InvestMent rIsk The investment is in principle subject to a large number of risks; in particular, it is exposed to the risk that market prices may change. This is managed primarily by ensuring broad diversification and using risk ...

  • Page 189
    Consolidated Financial Statements Notes Balance sheet disclosures The provision for other employee benefits primarily covers workforce reduction expenses (severance payments, transitional benefits, partial retirement, etc.), stock appreciation rights (SAR s) and jubilee payments. The restructuring...

  • Page 190
    ... the listed convertible bond was â,¬1,353 million at the balance sheet date (previous year: â,¬1,049 million). Deutsche Post DHL placed two conventional bonds amounting to â,¬1 billion with national and international investors. The issue date was 9 October 2013. The capital raised is to be used to...

  • Page 191
    Consolidated Financial Statements Notes Balance sheet disclosures 46.3 Finance lease liabilities Finance lease liabilities mainly relate to the following items: Interest rate (%) Leasing partner End of term Asset 2012 2013 Deutsche Post Immobilien GmbH, Germany DHL Express (Austria) GmbH, ...

  • Page 192
    ... Maturity structure 2012 2013 Tax liabilities Incentive bonuses Wages, salaries, severance payments Compensated absences Deferred income, of which non-current: 61 (previous year: 71) Payables to employees and members of executive bodies Social security liabilities Debtors with credit balances...

  • Page 193
    ... calculated by adjusting consolidated net profit / loss for tax expenses, net financial income / net finance costs and non-cash factors, as well as taxes paid, changes in provisions and in other non-current assets and liabilities (net cash from operating activities before changes in working capital...

  • Page 194
    ... previous year by the funding of pension obligations and the additional VAT payment. The cash inflows and outflows described above produced cash and cash equivalents of â,¬3,417 million; Note 36. This represents a year-on-year increase of â,¬1,017 million. 190 Deutsche Post DHL 2013 Annual Report

  • Page 195
    ...liquidity in the Group is centralised as much as possible in cash pools and managed in the Corporate Center. The centrally available liquidity reserves (funding availability), consisting of central short-term financial investments and committed credit lines, are the key control parameter. The target...

  • Page 196
    ... impact profit or loss. In order to mitigate this impact as far as possible, all significant 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...

  • Page 197
    ... used by Group companies were hedged by Deutsche Post AG's in-house bank, with Deutsche Post AG setting and guaranteeing monthly exchange rates. Exchange rate-related changes therefore have no effect on the profit or loss and equity of the Group companies. Where, in individual cases, Group companies...

  • Page 198
    ... using cash flow hedge accounting. For the derivatives in question, commodity price changes would affect both the fair values of the derivatives and the income statement. As in the previous year, if the underlying commodity prices had been 10 % higher at the reporting date, this would have increased...

  • Page 199
    ... in non-current financial assets as at the balance sheet date. Of this amount, â,¬318 million relates to the restricted cash transferred to a blocked account with Commerzbank AG for any payments that may be required due to the EU state aid proceedings; Note 3, 2012 Annual Report. â,¬55 million is...

  • Page 200
    Notes Other disclosures Consolidated Financial Statements 50.3 Derivative financial instruments The following table gives an overview of the recognised derivative financial instruments used in the Group and their fair values. Derivatives with amortising notional volumes are reported in the full ...

  • Page 201
    ... swaps that will affect cash flow in 2014. As in the previous year, the fair value of these cash flow hedges amounted to â,¬0 million at year-end. Gains (+) on hedged items Losses (-) on hedging transactions Balance (ineffective portion) 1 -1 0 11 -11 0 Deutsche Post DHL 2013 Annual Report 197

  • Page 202
    ... also include the convertible bond issued by Deutsche Post AG in December 2012. The listed bond had a fair value of â,¬1,353 million at the balance sheet date. A fair value of â,¬928 million was reported for the debt component at the balance sheet date. 198 Deutsche Post DHL 2013 Annual Report

  • Page 203
    ... 7,040 955 0 70 751 3,417 - 4,407 0 147 0 1,280 0 6,392 346 0 12,572 0 0 0 0 0 0 0 0 0 0 0 11 0 0 0 21 0 0 0 32 194 0 0 0 19 0 0 0 0 213 4,657 11 147 0 1,302 29 6,392 346 0 - Deutsche Post DHL 2013 Annual Report 199

  • Page 204
    ...Deutsche Post AG in December 2012. The listed bond had a fair value of â,¬1,049 million at the balance sheet date. A fair value of â,¬929 million was reported for the debt component at the balance sheet date. No assets were reclassified in financial years 2013 and 2012. 200 Deutsche Post DHL 2013...

  • Page 205
    ... 866 173 6,959 893 0 119 133 2,400 - 4,282 0 149 0 268 0 5,991 398 0 11,088 0 0 0 0 0 0 0 0 0 0 0 5 0 0 0 21 0 0 0 26 123 0 0 0 26 0 0 0 0 149 4,571 8 149 0 294 109 5,991 398 0 - Deutsche Post DHL 2013 Annual Report 201

  • Page 206
    ...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 207
    ...for the trading category in the previous year related to the measurement of the forward and the options entered into to transfer the remaining shares in Deutsche Postbank AG. Dividends and interest are not taken into account for the financial instruments measured at fair value through profit or loss...

  • Page 208
    ...financial liabilities set off in the balance sheet Gross amount of financial assets set off Financial assets subject to a legally enforceable netting agreement that do not meet offsetting criteria Collateral provided Total Liabilities at 31 December 2013 Derivative financial liabilities 1 Trade...

  • Page 209
    ... in the normal course of business, the financial assets and liabilities are recognised in the balance sheet at their gross amounts as at the reporting date. The master netting arrangement creates a conditional right of set-off that can only be enforced by taking legal action. To hedge cash...

  • Page 210
    ... on 2 January 2013 and 2 January 2014, respectively. All payments made until the reporting date were reported in the balance sheet under non-current assets; the earnings position remained unaffected. The European Commission has not expressed its final acceptance of the calculation of the state...

  • Page 211
    ... days before the issue date. The performance period is the last 60 trading days before the end of the waiting period. The average (closing) price is calculated as the average closing price of Deutsche Post shares in Deutsche Börse AG's Xetra trading system. Deutsche Post DHL 2013 Annual Report...

  • Page 212
    ... to the Board of Management. â,¬4 million of the total provision (previous year: â,¬0 million) related to rights exercisable at the reporting date. The federal government is a customer of Deutsche Post AG and as such uses the company's services. Deutsche Post AG has direct business relationships...

  • Page 213
    ... has a secure majority at the Annual General Meeting due to its average presence there. Deutsche Telekom AG is therefore a related party of Deutsche Post AG. In financial year 2013, Deutsche Post DHL provided goods and services (mainly transport services for letters and parcels) for Deutsche Telekom...

  • Page 214
    ... the company. Post-employment benefits are recognised as the service cost resulting from the pension provisions for active members of the Board of Management. The corresponding liability amounted to â,¬23 million as at the reporting date (previous year: â,¬20 million). The share-based payment amount...

  • Page 215
    ...members of the Board of Management in financial year 2013 including the components with a long-term incentive effect totalled â,¬20.5 million (previous year: â,¬20.3 million). Of this amount, â,¬7.8 million (previous year: â,¬7.6 million) is attributable to non-performance-related components (annual...

  • Page 216
    ...Governance Code for financial year 2013 required by section 161 of the AktG. This Declaration of Conformity can be accessed online at www.corporate-governancecode.de and at www.dpdhl.com/en/investors.html. 59 Significant events after the balance sheet date At the end of January, Deutsche Post DHL...

  • Page 217
    ..., 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 218
    ...income, the balance sheet, the cash flow statement, the statement of changes in equity, and the notes to the consolidated financial statements, for the business year from 1 January to 31 December 2013. Board of ManageMent's responsiBility for Consolidated finanCial stateMents The Board of Management...

  • Page 219
    FURTHER INFORMATION 215 - 224 d d Further InFormatIon

  • Page 220
    d FURTHER INFORMATION 217 INDEX 218 GLOSSARY 219 GRAPHS AND TABLES 220 LOCATIONS 222 MULTI-YEAR REVIEW 224 CONTACTS 224 PUBLICATION SERVICE FINANCIAL CALENDAR

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    ..., 159 Price-to-earnings ratio 71, 223 Profit from operating activities 18, 36, 43, 48, 50, 62, 135, 138, 144, 158 f., 222 Q Quality 17, 21, 27, 30, 32, 34, 74, 81, 83 ff., 95, 99, 103, 110, 118 R Rating 51 f., 54 f., 88, 97, 105 Regulation 22, 47, 55, 94, 206 f. Responsibility statement 213 Retail...

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    ... provider. Services are tailored to a particular industry or customer and are generally based on long-term contracts. Day Definite Delivery of shipments on a specified day. DHL Customer Solutions & Innovation (DsI) A unit in which we merged our key account management, Global Customer Solutions...

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    ... Board of Management B.04 Mandates held by the Supervisory Board General Information A.01 Organisational structure of Deutsche Post DHL A.02 Market volumes A.03 Domestic mail communication market, business customers, 2013 A.05 Domestic press services market, 2013 A.06 Domestic parcel market, 2013...

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    ...USA Venezuela Europe Albania Austria Belgium Bosnia and Herzegovina Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany...Countries according to the list of shareholdings, which can be accessed on the website dpdhl.com/en/investors. 220 Deutsche Post DHL 2013 Annual Report

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    ... Darussalam Cambodia China East Timor Fiji French Polynesia India Indonesia Japan Kazakhstan Laos Macau Malaysia Myanmar / Burma Nepal New Caledonia New Zealand Pakistan Papua New Guinea Philippines Singapore South Korea Sri Lanka Taiwan Thailand Vietnam Deutsche Post DHL 2013 Annual Report 221

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    ... Information MULTI-YEAR REVIEW D.02 Key figures 2006 to 2013 â,¬m 2006 adjusted 2007 adjusted 2008 adjusted 2009 adjusted 2010 adjusted 2011 adjusted 2012 adjusted 2013 Revenue MAIL EXPRESS LOGISTICS GLOBAL FORWARDING, FREIGHT SUPPLY CHAIN FINANCIAL SERVICES SERVICES Divisions total Corporate...

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    ...). 10 Net debt / cash flow from operating activities. 11 The weighted average number of shares for the period was used for the calculation. 12 Cash flow from operating activities. 13 Proposal. 14 Year-end closing price / (diluted) earnings per share. Deutsche Post DHL 2013 Annual Report 223

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    ...INVESTOR RELATIONS Tel.: + 49 (0) 228 182-6 36 36 Fax: + 49 (0) 228 182-6 31 99 E-mail: ir @ dpdhl.com PUBLICATION SERVICE PUBLICATION Published on 12 March 2014. ENGLISH TRANSLATION Deutsche Post Corporate Language Services et al. The English version of the 2013 Annual Report of Deutsche Post DHL...

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    ... ANNUAL REPORT 11 March 2015 INTERIM REPORT JANUARY TO MARCH 2015 12 May 2015 2015 ANNUAL GENERAL MEETING (FRANKFURT AM MAIN) 27 May 2015 DIVIDEND PAYMENT 28 May 2015 INTERIM REPORT JANUARY TO JUNE 2015 5 August 2015 INTERIM REPORT JANUARY TO SEPTEMBER 2015 11 November 2015 Deutsche Post DHL 2013...

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