* Sees DHL EBIT up average 10 pct a year in 2013-2020
* Sees Mail EBIT up average 3 pct a year
* Aims to grow further in developing markets
* Aims to expand parcel operations in Europe, Asia, Americas
* Shares rise 3.7 percent to top of DAX index
(Adds quotes, background)
By Marilyn Gerlach and Matthias Inverardi
FRANKFURT, April 2 Deutsche Post, the
world's biggest postal and logistics group, is betting on
emerging markets and an e-commerce boom to boost profits through
2020, it said on Wednesday in unveiling its new medium-term
The company, which grew into a global logistics conglomerate
after going public in 2000, forecast its annual operating profit
would increase by an average of more than 8 percent annually
through 2020, driven mainly by its DHL logistics businesses.
DHL - comprising express, freight and supply chain divisions
- has been a main pillar for expansion abroad as Deutsche Post's
traditional mail business is hit at home by a growing trend
toward correspondence via email and social media, weak
advertising revenues and a slump in newspaper sales.
It already accounts for three quarters of group profit, and
is set to grow further. Deutsche Post forecasts DHL's annual
operating profit - earnings before interest and tax (EBIT) -
will increase by an average of 10 percent every year between
2013 and 2020, outpacing 3 percent growth at the mail division.
Chief Executive Frank Appel said the group's main focus
would be on organic growth, with some smaller acquisitions.
"The new targets for 2020 imply an EBIT of about 1.58
billion euros ($2.18 billion) for mail and about 4.9 billion at
group level. Hence, the targets are a significant positive
surprise for us," Equinet analyst Jochen Rothenbacher said.
Shares in Deutsche Post were up 3.7 percent by 0842 GMT,
making them the biggest gainers on Germany's blue-chip DAX index
, which was 0.3 percent higher.
DHL grabbed market share from rivals UPS, FedEX
and TNT last year and has invested in
expansion in Asia, where it is already market leader with about
a 30 percent share.
It added a new hub for its express delivery business in
Shanghai in 2012 and plans to invest $50 million to expand in
Indonesia, where petrochemical and electronics firms
increasingly want to outsource supply chain logistics.
Developing countries accounted for 22 percent of Deutsche
Post's group revenues last year, and the group expects that
figure to climb to 30 percent by 2020, as it expands in Africa,
Latin America and Asia-Pacific.
One analyst, who declined to be identified, cautioned though
that expanding in emerging markets was generally fraught with
regulatory risks such as sudden increases in the minimum wage,
which affect costs not just for logistics companies but also for
Meanwhile, the Mail division's parcel business will seek
growth by expanding outside Germany to benefit from growing
demand for shipment of consumer products ordered online.
Last year, the parcel business, whose customers include
fashion online retailer Zalando, Amazon and EBay
, saw its revenue increase by 7.9 percent.
It has now bundled its DHL parcel business in the Czech
Republic, Poland, Belgium, Netherlands and Luxembourg with its
German parcel operations and aims to enter markets in Asia and
the Americas as well.
Deutsche Post, which holds a 42 percent market share in
Germany's 8.2 billion euros parcel delivery market, said it
aimed to become the biggest provider of cross-border e-commerce
services on the most important international trade lanes.
In Germany, the business competes with DPD, majority owned
by France's La Poste ; Hermes, owned by Germany's Otto
group; UPS; FedEx; and General Logistics System of Britain's
Royal Mail Group.
Deutsche Post faced criticism from Germany's antitrust
regulator last year over its pricing for major customers in its
letter business, prompting the regulator to launch an
investigation into whether the company cut prices to force
competitors out of the market.
Deutsche Post has denied the accusation and the probe is
(Editing by Maria Sheahan and Susan Fenton)