DHL 2015 Annual Report Download - page 100

Deutsche Post  Group —  Annual Report
We are nonetheless unable to rule out the possibility of an economic downturn in
specic regions or a stagnation or decrease in transport quantities. However, this would
not reduce demand in all business units. Indeed, the opposite eect could arise in the
parcel business, for example, as a result of more frequent online purchasing amongst
consumers. Companies might also be forced to outsource transport services in order to
lower costs. Cyclical risks can aect our divisions dierently with respect to magnitude
as well as point in time, which may mitigate the total eect. erefore, we consider these
to be medium-level risks. Moreover, we have taken measures in recent years tomake
costs more exible and to allow us to respond quickly to a change in market demand.
Deutsche Post and  are in competition with other providers. Such competition
can signicantly 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 are quality,
customer condence and competitive prices. anks to the high quality we oer, along
with the cost savings we have generated in recent years, we believe that we shall be able
to remain competitive and keep any negative eects at a low level.
Financial opportunities and risks
As a global operator, we are inevitably exposed to nancial opportunities and risks.
ese are mainly opportunities or risks arising from uctuating exchange rates, interest
rates and commodity prices and the Group’s capital requirements. We attempt to reduce
the volatility of our nancial performance due to nancial risk by implementing both
operational and nancial measures.
Opportunities and risks with respect to currencies may result from scheduled for-
eign currency transactions or those budgeted for the future. Signicant currency risks
from budgeted transactions are quantied as a net position over a rolling -month
period. Highly correlated currencies are consolidated in blocks. Some of the identied
risks are hedged using derivatives. e most important net surpluses are budgeted at
the Group level in pound sterling, Japanese yen and Indian rupee. e Czech crown is
the only currency with a considerable net decit. By osetting the net decit in  dol-
lars with surpluses in other highly correlated currencies, the net risk in the “ dollar
block” at the Group level is relatively balanced and thus not actively managed. e
average hedging level for the year  was approximately   as at the reporting date.
A potential general devaluation of the euro presents an opportunity for the Group’s
earnings position. Based upon current macroeconomic estimates, we consider this
opportunity to be of low relevance. e main risk to the Group’s earnings position would
be a general appreciation of the euro. e signicance of this is deemed low when con-
sidering the individual risks arising from the performance of the respective currencies.
e overall risk of all these currency eects is deemed to be of medium relevance
for the Group.
As a logistics group, our biggest commodity price risks result from changes in fuel
prices (kerosene, diesel and marine diesel). In the  divisions, most of these risks are
passed on to customers via operating measures (fuel surcharges). We have entered into
noteworthy hedging transactions for the purchase of diesel in the Post - eCommerce -
Parcel division.
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