DHL Group closed the financial year 2023 with impressive results, proving that the company can operate successfully even in a difficult global economic environment.
The DHL Group generated revenue of EUR 81.8 billion in financial year 2023, 13.4 per cent less than in the record year 2022, when revenue reached EUR 94.4 billion and was well below analysts’ expectations. The operating result (EBIT) fell by 25 per cent to 6.3 billion euros in the 2023 financial year (2022: 8.4 billion euros).
In the absence of a significant recovery in the global economy, DHL Group has thus met its own earnings forecast of at least EUR 6.2 billion. In total, the Bonn-based logistics company generated a consolidated profit of EUR 3.7 billion in the 2023 financial year (2022: EUR 5.4 billion).
Volumes in the DHL Express business declined for the second year in a row, albeit less pronounced than the market average. DHL Global Forwarding, Freight faced headwinds from lower freight volumes and the expected normalization of freight rates. DHL Supply Chain’s business on the other hand has grown.
DHL eCommerce and the German parcel business benefited from the intact structural trend in e-commerce. However, the results of the Post & Parcel Germany division reflect the detrimental regulatory environment for the German mail business.
The performance of DHL Group’s global logistics portfolio is also reflected in the cash flow development: at EUR 2.9 billion, free cash flow of DHL Group was at a high level (2022: EUR 3.1 billion) despite lower EBIT. The robust development of free cash flow also confirms that the established protection measures to safeguard earnings and cash flow are taking effect. The Group is successfully implementing price adjustments in unregulated product segments and a disciplined program to further improve the cost structure.
In total, DHL Group generated consolidated net profit after non-controlling interests of EUR 3.7 billion in the financial year of 2023 (2022: EUR 5.4 billion). Basic earnings per share in the same period amounted to EUR 3.09, compared to EUR 4.41 in the previous year.
DHL is open to acquisitions
During the presentation of the company’s full year results, DHL CEO Meyer commented on the sale of DB Schenker. In an interview with CNBC, Meyer said that DHL had not made an offer for Schenker. The reason given by the group is that DB Schenker does not fit DHL’s profile. However, the group is open to acquisitions, he added.
“We choose as management to deploy capital as wisely as we can. We want to obviously earn good returns for the capital the shareholders give us and we have a lot of things that we can invest in. We are very interested in the e-commerce space, so we just didn’t see Schenker as a good fit for us. There will be others who are interested with us, but as DHL Group, we have better ways to deploy capital for our shareholders,” said Meyer.
Continued strong investment
In 2023, gross capital expenditure (capex) totalled EUR 3.4 billion (2022: EUR 4.1 billion). Despite the lack of a global economic recovery, the Group continued to invest in the quality of its services. Investment priorities included the strengthening of the global network and the growth area of e-commerce, as well as the further development of a low-emission logistics infrastructure and a low-emission vehicle fleet.
“We continue to invest in our logistics network – especially in e-commerce and in the decarbonisation and digitalisation of our business processes. This puts us in a very good position to meet the current opportunities and challenges,” added Meyer.