UPDATE 1-Deutsche Post CFO says 2013 won't be easy

Mon Jan 14, 2013 1:03pm EST

Related Topics

* Says economic volatility likely to remain high

* Economic weakness to be led by Europe

* CEO very satisfied with 2012

* Sees inelastic demand for letter mail as prices rise (Adds CFO quotes from Reuters interview)

FRANKFURT/NEW YORK, Jan 14 (Reuters) - Germany's Deutsche Post expects that 2013 will "not be easy" as a weak global economy weighs on demand for express delivery and other logistics services.

"Economic volatility is likely to remain high," finance chief Larry Rosen told Reuters at an investor event in New York on Monday, but added that Deutsche Post was well placed to expand its position in the market this year.

He said that he expected 2012 global economic growth to be just over 3 percent, at best, just above the 2012 rate of about 2.6 percent.

"Weakness will be led by Europe, at close to zero growth, with some countries in the southern tier still having negative growth," he said.

Europe's biggest mail and express delivery company is expected to provide a more detailed outlook for the year when it publishes its full-year 2012 financial results on March 5.

Rosen indicated that Deutsche Post reached its 2012 target for an operating profit of 2.6-2.7 billion euros ($3.5-$3.6 billion), saying he was "very satisfied" with the year.

Deutsche Post, which aims to increase its profit to between 3.35 billion and 3.55 billion in 2015, was bolstered by robust demand for package delivery toward the end of the year as more consumers ordered Christmas gifts over the Internet.

Package deliveries reached a record level during the Christmas season, exceeding 7 million shipments per day for the first time, the company said.

He said he saw the package market growing by 5-7 percent a year through 2020 as e-commerce's share of overall consumption rises toward 20 percent from 7 percent now.

Deutsche Post said it was on track to stabilise operating profit at its mail business, which includes package delivery in Germany, at at least 1 billion euros a year.

Rosen told Reuters that a recent increase in the price of mailing letters in Germany - to 0.58 euros from 0.55 euros for a standard letter - would not weigh on demand.

"The average German household is spending less than 4 euros a month on postage, so at a 5 percent increase in postal rates we think demand will be relatively inelastic, meaning there wouldn't be much impact," he said.

($1 = 0.7493 euros) (Reporting by Matthias Inverardi and Lynn Adler; Writing by Maria Sheahan; Editing by David Cowell)

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