Economy as a whole

Deutsche Post World Net is assuming that the difficult global economic situation will continue in 2002, and predicts that German gross national product will grow by 0.9%. Forecasts for the EU are slightly more positive,with growth in economic output expected to be 1.1%. Global GDP (gross domestic product) is expected to grow by 2.3% and world trade by 1.5%.*

*Deutsche Bank, Global Markets Research, January 2002.

Industry development

Both the regulatory environment and the state of the economy will have a pronounced influence on the future development of the European mail market. The next stage in the development of the European regulatory framework is currently being mapped out by the amendments to the EU Postal Services Directive. Further steps toward deregulation – the lowering of weight limits – are expected in 2003 and 2006 (see also the Risk Report). Overall, assuming continued economic weakness in 2002, moderate growth in the mail market is expected. Economic developments and world political events in the wake of September 11, 2001 also left their mark on the market for courier, express and parcel services. On the CEP market,we are expecting market growth in 2002 of 3% in Germany and 7% throughout Europe.

During times of economic turmoil, the market for customer-specific logistics solutions will also profit from the trend toward outsourcing. However, air freight markets will only return to pre-September 2001 levels in the medium term. We also expect that developments in the market for European overland transport will more or less track economic growth.

Given the muted forecasts for both national and international levels, the economic development of the financial services sector will be dominated by slow financial market recovery and by several other issues: pressure to cut costs, consolidation and full-service and multi-channel strategies. Additional factors include the still unclear effects of the EU ruling on Sparkassen (German savings banks), Basle II, the Riester pension products and the conversion to the euro.

Business developments

In 2002, Deutsche Post World Net’s business will continue to record positive growth.

At a Group level, we are expecting strong revenue growth, due primarily to the first-time consolidation of DHLI.

In view of the current strains on the economy as a whole, it will be difficult to top 2001’s record earnings.

Corporate divisions
Looking at 2002, a decisive factor for the MAIL Corporate Division will be the economic situation and the future development of the advertising market.

In 2002, the first-time consolidation of DHLI will give a significant boost to EXPRESS Corporate Division revenues. We will focus in particular on the restructuring and integration of DHLI into the Group.

The poor state of the economy in 2002 will continue to impact the LOGISTICS Corporate Division. However, we are still expecting further good development in this segment.

Thanks to its good market positioning,we expect the FINANCIAL SERVICES Corporate Division to continue the successful development it recorded in previous years.

Dividends
With regard to our policy on dividend payments, we will continue to pay an earnings-based dividend to our shareholders. We are planning a distribution ratio of 25 to 30% of consolidated net profit.

Procurement
In future, an Internet-based transport portal will enable Deutsche Post World Net to buy and organize online the transport services it requires in the area of European overland transport, provided by freight carriers for the different corporate divisions within the Group. The new transport portal will enable us to offer and outsource all European freight for the MAIL, EXPRESS und LOGISTICS Corporate Divisions – and most importantly therefore, for Danzas – to the different freight carriers.

Corporate strategy

In the coming years, demand for logistics services at an international level will continue to rise. We can see particularly good development opportunities for globally active, integrated logistics providers.

We have oriented our services portfolio toward this market development. Our corporate strategy for the next few years will concentrate on fully exhausting the growth and cost-cutting potential of our new business platforms. Once the new businesses and acquisitions have been successfully integrated with the corporate divisions, a key task will be to leverage cross-divisional synergies.

We will tightly integrate the services provided by the corporate divisions, which will also allow us to realize potential revenue and value growth. In terms of its reach and the range and quality of services offered, Deutsche Post World Net is already one of the major global logistics providers. By systematically leveraging the synergies between our different business divisions, we intend to exploit our company’s long-term development potential, which will also benefit

  • our customers through global service,
  • our shareholders through growth, dividends and increased value and
  • our employees through secure workplaces.


Bonn, February 21, 2002

Deutsche Post AG
Board of Management

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