* Q3 EBIT 604 mln euros, vs poll 648 mln
* Q3 revenues 13.84 bln euros, vs poll 13.59 bln
* Q3 Mail division EBIT down 1.9 pct at 3.28 bln euros
* Affirms 2012 and mid-term targets
* Shares down 1.1 pct in early trade vs slight gain in DAX
By Marilyn Gerlach
FRANKFURT, Nov 8 Deutsche Post,
Europe's biggest express delivery and mail company, said it
would need to step up efforts to achieve its mid-term targets
after the slowing global economy and the European debt crisis
hit its markets.
Some of Deutsche Post's competitors have already been forced
to lower guidance, with European logistics rivals Kuehne & Nagel
and Panalpina reporting weak volumes in air
freight and ocean cargo amid reduced trade between Asia and
"Our growth trends remains firmly intact even as market
conditions have become more challenging," Chief Executive Frank
Appel said on Thursday after the company published quarterly
results and confirmed its full-year profit target.
Deutsche Post missed expectations for quarterly operating
profit after costs at its Mail business rose, but said it
continued to target group operating profit of 3.35 billion-3.55
billion by 2015.
"This is indeed ambitious, especially if the global economy
does not accelerate again," Appel said.
There was need to "further intensify our efforts", he said,
without providing specifics.
Federal Express in September lowered its fiscal 2013
forecast while United Parcel Service reported lower
quarterly profit on Tuesday.
Analysts said that while Deutsche Post did not have any
special cost-cutting programme, they do not expect it to come up
with one now as it had continually been improving its cost
structure even during the good times.
"Deutsche Post is much more optimistic than its rivals and
it would be natural for any company to be more cautious now
given this kind of market environment," said Hamburger Sparkasse
analyst Ingo Schmidt, who raised his stance on the stock to a
"buy" on Thursday from a "hold".
According to Appel's presentation charts to analysts, the
company was "prepared to pull additional levers for further
flexibility if needed", such as on discretionary spending,
citing advertising as example.
Deutsche Post's Mail unit - which generate 40 percent of
group revenues - was also hit by seasonal trends and the
insolvency of mail order company Neckermann, a household name in
Germany which shipped everything from computers and crockery to
refrigerators and TV sets.
The company is also in the business of courier express,
global forwarding and supply chain - all under the DHL unit,
whose operating profit grew 5 percent in the quarter.
Despite Neckermann's collapse and a possible recession in
Germany, Deutsche Post was still optimistic about online sales
growth among retailers, affirming its goal to invest 750 million
euro up to 2014 to boost parcel delivery infrastructure.
Deutsche Post said that while it continued to profit from a
still flourishing intra-Asian trade, the slowdown in transport
volumes was starting to impact DHL customers.
"The crisis symptoms are increasingly unsettling our
customers. Furthermore price-sensitive customers are more
frequently and more quickly switching to lower-cost shipping
options than is normally the case," he added.
Analysts said corporate customers in the courier express
industry, which handles overnight package delivery through its
fleet of aircraft, were opting to ship car spare parts,
medicines and electronic products by ocean rather by air, to cut
costs because of pressure on selling prices for products.
Frankfurt Airport operator Fraport AG said third
quarter cargo tonnage fell 4.7 percent while Lufthansa Cargo
last week slashed its capacity for winter due to an
Deutsche Post, which raised its profit guidance in August,
said it continued to expect 2012 EBIT of 2.6 billion-2.7 billion
euros, compared with 2.44 billion last year.