DHL Group announced a notable revenue increase of 6.2 percent, totaling EUR 20.6 billion in the third quarter of 2024, despite the ongoing global economic challenges. This marks an improvement from EUR 19.4 billion in the same period last year. The operating profit (EBIT) remained stable at EUR 1.373 billion, maintaining levels significantly above the pre-pandemic benchmark (Q3 2019: EUR 942 million).
Tobias Meyer, CEO of DHL Group, commented, “The weak momentum of world trade has been evident throughout the first nine months of 2024. However, we managed to significantly increase our revenue in the third quarter and initiate an EBIT turnaround compared to the previous year. It’s crucial now to uphold the high-quality service for our customers amid heavy traffic and deliver substantial profitability.”
DHL’s gross capital expenditure amounted to EUR 690 million in the third quarter.
The free cash flow was recorded at EUR 723 million. Melanie Kreis, CFO of DHL Group, emphasized the company’s strategy: “Operating without economic tailwind since the end of 2022 underscores the importance of our focus on cost and capex control, price adjustments, and network optimization. Our sales and earnings growth, along with strong free cash flow in the third quarter, indicate that our measures are effective.”
In the third quarter of 2024, consolidated net income after non-controlling interests stood at EUR 751 million, down slightly from the previous year’s EUR 807 million.
Basic earnings per share also saw a marginal decline from 0.68 euros to 0.64 euros. DHL anticipates a typical seasonal boost in e-commerce deliveries to consumers during the fourth quarter due to heavy traffic.
DHL’s positive revenue growth amidst challenges
The company has prepared for high shipment volumes by deploying additional Boeing 777 freighters on key Asia-Europe routes and enhancing operations with nearly 500 more robots and around 15,000 temporary workers across various divisions. Despite the expected increase in B2C shipment volumes, the weakness in B2B volumes and the decline in letter volumes have led the Management Board to adjust the Group’s EBIT forecast for 2024 to over EUR 5.8 billion, down from the previous range of EUR 6.0 billion to EUR 6.6 billion. Correspondingly, the capital expenditure forecast has been revised to EUR 3.0 billion to EUR 3.2 billion.
The free cash flow projection remains high at EUR 2.8 billion to EUR 3.0 billion. Medium-term growth expectations in Group EBIT have also been adjusted to over EUR 7.0 billion by the 2026 financial year, considering the weaker macroeconomic environment, particularly in Europe. The Express Division saw revenue and earnings growth despite a 5.9 percent decline in daily TDI shipment volumes, thanks to effective revenue and cost management.
The Global Forwarding, Freight Division experienced increased volumes and ocean freight rates, contributing to revenue growth, though operating profit declined due to margin pressure. The Supply Chain Division saw significant increases in both revenue and EBIT, driven by contract signings, renewals, and the burgeoning e-commerce business. The eCommerce Division continued to invest in network expansion and service quality in growth markets, leading to impressive sales increases.
The Post & Parcel Germany division saw revenue growth primarily from Parcel Germany, which experienced a 5.4 percent volume increase. However, the letter business continued to decline, impacting overall EBIT due to rising material and personnel costs. The adjustments in forecasts and the detailed performance of each division reflect DHL’s robust strategy to navigate economic headwinds while positioning itself for future growth.
