Deutsche Post AG Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Muneeba Kayani - BofA Global Research - Analyst : Two questions, please. Firstly, just on e-commerce. So in Express, B2C volumes are down over 10%. Can you talk about what's driving that? Is it all the Chinese e-commerce volumes coming out from last year? And why do you think this -- it's underperformed parcel volumes in P&P, which are up 5% and e-commerce, which are up 8%. So that's my first question. And then, secondly, you talked about clearly the guidance being lowered for this year and '25, and I know you don't have a guide for next year. But can you talk about just building blocks for next year and trends for each segment and your expectations currently?

Question: Tobias Fromme - Bernstein Autonomous LLP - Analyst : I have two questions, please. The first is on the P&P letter volumes. In 2023, you still expect that market better volumes to decline between minus 2% and minus 3% per year through to 2025. But now according to the regulator and your numbers, it appears that the decline will be substantially above. What exactly was driving that? Maybe could you comment on that? And do you expect sort of a catch-up decline of volumes in Germany that have a significantly underground or that decline less than other European markets? Do you expect the catch-up decline of those volumes going forward? And then are you going to buy GXO?

Question: Cristian Nedelcu - UBS Limited - Analyst : Maybe the first one on the 2025 moving parts in terms of profitability. We had this mail volume weakness that you've discussed and as well as the air GP per unit. How should we think of the potential headwinds to profitability from these two factors in 2025? And equally so, I think some of your peers have also admitted that GP per unit in Ocean has been maybe artificially high due to the Red Sea in Q3. So how do you think about the development into 2025 here? And secondly, just zooming in on Express. Could you give us a bit of color on what you're seeing or your expectations in B2B and B2C volumes into Q4, excluding the China e-commerce players. And moreover, how you're managing your resources there, your capacity and number of employees going forward in Express.

Question: Sathish Sivakumar - Citi Investment Research - Analyst : I've got two questions here. On the demand surcharge, obviously, you results you did say that it is based on different trade lanes. And can you like comment on the evolution of this demand or surcharge across the trade lanes, where it has been more sticky and where that has seen a big increase? And then the second one is around the potential for DHL freight forwarding from, say, potential gain in customer on the back of being bought off by DSV. Can you quantify what is your expectation on like volumes or customer gains from that transaction?

Question: Andy Chu - Deutsche Bank UK - Analyst : I have two questions, please. Two questions, please. The first one is around the guidance. Can you just confirm whether Q4 is going to be a clean quarter? Should we expect any one-offs? And when I look at your bridge in terms of Q4 requiring more than 8% year-on-year. I'm a little bit confused. Maybe I'm running the wrong numbers. But Q3 last year, I think you had an underlying EBIT close to EUR1.5 billion. And I think you need close to EUR1.8 billion to hit the EUR5.8 billion minimum for the full year. So that implies maybe double the 8% growth year-on-year. So maybe you could please clarify what I'm missing. And then secondly, on the air freight buying patterns, I guess, typically, air freight is asset light. You shouldn't really be exposed to forward buying. What's actually happened this time around? And is that definitely going to be rolled out going forward? Because typically, you try and match obviously, your revenues to your cost in terms of purchasing.

Question: Alexia Dogani - JPMorgan Securities Plc - Analyst : I have three possible. Just firstly on Express. You have fully talked a little bit about the B2C development and your expectations for volumes in Q4. But if I look at the third quarter being flat Q-on-Q, it's actually quite an improvement versus normal seasonality. So then can you just help us extrapolate that in Q4, given you are doing tough help on cost and yield management volumes. I inferred from what you were saying should

Question: Parash Jain - HSBC Securities - Analyst : I have two. First, on the Express. And it's obvious, I think around the full year result, around the first quarter results, there was a hope that we will see a B2B recovery going into the second half of the year. The volumes have flattened out. Could you talk about like which region, which industry segments need to deliver for us to see the recovery in B2B volume, and as a result, help us with the operating leverage for the Express business? Secondly, for the freight forwarding business. I mean, there's a disruption time to time. But is it fair to say that your GP per unit has found a floor? And as we go into 2025, 2026, even with an expectation of sharp decline in the ocean freight rate, you are comfortable maintaining this kind of GP level and probably somewhat improvement in your air GP?

Question: Cedar Ekblom - Morgan Stanley & Co. International Plc - Analyst : Can you talk about what recourse you could have if the pricing in your post and parcel business in Germany isn't aligned with your assumption of more than EUR1 billion, particularly if we continue to see cost inflation and only limited efficiencies that you can put through there? Like what can you actually do with government or the regulator to get you over the line there? And then just on freight forwarding, what visibility do you actually have in that business? Because it feels like some of these shifts in the air freight market out of Asia might have been a bit unexpected. And obviously, there's stuff that's in your control and stuff there isn't. But I'd just like to understand a little bit more on sort of the reporting robustness in freight forwarding so that this stuff maybe doesn't happen as much in the future. How regularly are you getting reports from your guys on the ground? How dynamic are there in terms of contracts? That would be really helpful.

Question: Cedar Ekblom - Morgan Stanley & Co. International Plc - Analyst : And sorry, just on the P&P point. So the EUR70 million benefit from legal claims that you had benefits in the quarter, is that linked to recourse on previous legislative frameworks that didn't go in your favor? What I'm trying to understand is if you don't get to the EUR1 billion, and it sounds like you should be actually getting to more than that. But if you look to the EUR1 billion, how long do we have to wait before there is any potential negotiation with government? I mean it just feels like you guys are not in the winning position here, like government has it all and you just have to hope that you get paid. And maybe if you don't then in the future, you can get the money back. So it just seems like a very disadvantaged position for the division, but maybe I'm being [on hold].

Question: Marc Zeck - Kepler Cheuvreux SA - Analyst : I've got two questions, if I may. One on Express B2B volumes. And in relation to the automotive sector, I guess, companies like Volkswagen have shocked the German government, maybe term people by announcing maybe some plant closures. I would be interested in to what extent the development of the German auto sector and Volkswagen announcement have changed your B2B volume assessment going into 2026. That's my first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 9:00AM, DHLn.DE - Q3 2024 Deutsche Post AG Earnings Call And second question is on what in Germany is called the [E Rehung slit]. A, is there a translation for this term and? B, I would be interested what's the, let's say, market of business invoices currently in the Mail division that might be lost until next three or four years.