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Deutsche Post DHL reports best first-quarter results in its history

Company able to ‘unleash our full strength’ as coordinated group, CEO says

A lot of green for big yellow in Q1 (Photo: Jim Allen/FreightWaves & iStock)

Deutsche Post DHL Group (NASDAQ:DPSGY) reported on Wednesday strong first-quarter results that led the German transport and logistics giant to substantially increase full-year earnings guidance and cash flow targets.

For the quarter, revenue rose 26% from 2020 levels to $22.7 billion, while free cash flow increased by one-third to $1.9 billion. Earnings before interest and taxes (EBIT) more than tripled to nearly $2.3 billion. Net income rose to more than $1.4 billion. The profit figures were first-quarter records, said CEO Frank Appel in a statement.

The company reported $1.13 in earnings per share on a diluted basis, more than quadrupling first-quarter 2020 results. Deutsche Post DHL’s American Depositary Receipts (ADR) closed Tuesday at $59.15. Shares are up 18.7% year-to-date.

Quarterly operating cash flow more than tripled to $3 billion, as did free cash flow to more than $1.4 billion, the company said. Free cash flow is typically negative in Deutsche Post DHL’s first quarter, which is generally its weakest of the year. 

Appel said the results represented the company’s best-ever first quarter. The final figures were higher than the preliminary data published last month, the company said.

The company raised its 2021 EBIT targets to more than $8 billion from $6.73 billion and free cash flow to $3.6 billion from $2.76 billion. 

All five of the company’s operating divisions performed well in the quarter, the Bonn-based company said. DHL Express, its time-definite international air unit and the company’s largest, posted a 32.5% revenue gain to $6.6 billion. Volumes rose by 26.3% year-on-year, while EBIT margins nearly doubled to 17.5%.

The global forwarding unit posted a 32.7% revenue gain to $5.77 billion amid an environment of very tight capacity on international air and sea lanes. Air volumes rose 18.2% and ocean volumes increased 8.8%. EBIT rose to $259.6 million. 

The relatively new e-commerce unit posted a 46% gain in revenue to $1.8 billion as strong demand in 2020 carried over into 2021. The supply chain unit, which has lagged the other divisions due to the impact of the COVID-19 pandemic on customer activity, reported organic revenue gains of 4.7% to $3.8 billion, the company said. EBIT rose to $200 million from $126 million, the company said.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.