The logistics company DHL (formerly Deutsche Post) expects a slight increase in operating profit for the current year compared to 2024. In the previous reporting period, the company achieved earnings before interest and taxes (Ebit) of 5.89 billion euros, it announced last Thursday. This marks a 7.2% decrease compared to 2023, but it is slightly higher than the average analyst expectations of 5.82 billion euros, according to Bloomberg.

The last quarter of 2024 saw a rebound after three quarters of declining results, thanks mainly to the Business-to-Consumer (B2C) sector in areas like TDI (time-sensitive international shipments), Parcel Germany, and E-Commerce, CEO Tobias Meyer explained in the earnings press conference. Overall, Ebit increased by 13% to 1.85 billion euros from October to December.

For 2025, the board forecasts an Ebit figure of at least 6 billion euros, and analysts expectations are around 6.4 billion euros. The DHL divisions; Express; Global Forwarding, Freight; Supply Chain; e-Commerce) are expected to contribute at least 5.5 billion euros, and Post & Parcel Germany around 1 billion euros. This figure will be reduced by about 0.4 billion euros which is attributed to Group Functions.

The forecast for operating profit and other projections for 2025 excludes potential effects from changes in customs and trade policies, especially those originating from the US but also affecting countries like China, Canada, and economic communities such as the EU. The precise impact of these changes on DHL's business is difficult to estimate, notes Meyer. These changes could have both positive and negative effects. Similar to Brexit, a reduction in the number of shipments is expected on one hand, but on the other hand, DHL might gain value through more shipments requiring customs procedures. „The real losers will be small businesses“, predicts Meyer.

Free cash flow, one of the key metrics for the company, remained almost unchanged in 2024 compared to the previous year at 2.94 billion euros. Excluding M&A transactions, the free cash inflow stood at 3.0 billion euros, exceeding the average analyst expectation of 2.68 billion euros. For this year, a free cash inflow of around 3 billion euros is expected agin – higher than the market's forecast. The return on invested capital (ROIC) decreased to 14% from 16%. Overall, DHL met its self-set targets for 2024.

The net profit decreased by around 9% to 3.33 billion euros. The annual general meeting is being proposed to approve an unchanged dividend of 1.85 euros per share, corresponding to a payout ratio of 64%, which is above the target range of 40-60% set by the management. CFO Melanie Kreis emphasized that dividend continuity was the decisive factor.

DHL’s stock, which still trades under the Deutsche Post name on the stock exchange, rose by around 13% to 43.83 euros after the earnings announcement. However, the stock had not participated in the Dax rally of recent months and had been fluctuating between 33 and 38 euros since mid-October. The market capitalisation now stands at around 51 billion euros.

The share buyback program initiated in 2022 with a volume of up to 4 billion euros will be increased by 2 billion euros. Originally set to end this year, it will now be extended until the end of 2026. By early December 2024, 3 billion euros had been repurchased, leaving approximately 2 billion euros for additional buybacks. The repurchased shares will either be canceled, used for long-term executive compensation and potential future employee stock offerings, or used to meet obligations related to the 2017/2025 convertible bond.

DHL announced job cuts in its former core business: the mail and parcel operations in its home market of Germany. This year, 8,000 jobs, or 4% of the employees in Post & Parcel Germany, will be eliminated by not replacing positions, such as when employees retire or leave the company for other reasons.

As of the end of 2024, DHL employed approximately 187,000 people in the Post & Parcel Germany division, with around 170,000 of them being unionized employees with job protection. Just last week, the company reached an agreement with the Verdi union in a labor dispute for postal workers and parcel couriers. Meyer cited the declining volume of mail, the difficult regulatory environment, and „a relatively high wage settlement“ as reasons for the job cuts. For investments, growth, and competitiveness, profitability is required. The board reiterated the demand that each business unit – including Post & Parcel Germany – must generate the investments planned for the division themselves. „The DHL divisions are responsible for generating the dividends and share buybacks“, CFO Kreis clarifies. For Post & Parcel Germany, this corresponds to an Ebit value of around 1 billion euros per year.

The government, through the development bank KfW, still holds 17% of DHL. The free float is 79.1%, and the company holds the remaining 3.9%.

DHL Group aims to achieve net-zero greenhouse gas emissions in its logistics operations by 2050. Interim goals for 2030 include electrifying two-thirds of vehicles for last-mile deliveries and increasing the share of more sustainable fuels in all transport modes to over 30%, including the use of SAF (Sustainable Aviation Fuel). Meyer clarified to the media that DHL’s sustainability goals have not changed due to the shifting political landscape in the US and Germany. Kreis added that sustainability is increasingly becoming a competitive advantage for the company and its products. The associated costs are estimated at an average of 300 million to 400 million euros.