(Tiểu luận) topic analysis of the financial reportabout deutsche post dhl group

Trang 4 1.1 Business information Name: Deutsche Post DHL Group Headquarters: Bonn, GermanyFounders: Adrian Dalsey, Larry Hillblom, Robert LynnFounded: September 25, 1969, San Francisco,

FOREIGN TRADE UNIVERSITY

Faculty of Economics and International Business

-*** -MARKET AND FINANCIAL MANAGEMENT

TOPIC: ANALYSIS OF THE FINANCIAL REPORT ABOUT DEUTSCHE POST DHL GROUP

Hanoi, November, 2023

Student : Le Thi An Chinh Student ID : 2013530237 Class : English 02 – LOG – K59 Course ID : TCHE422(HK1-2324)2.1 Instructor : PhD Nguyen Huy Hieu

In the context of economic integration and openness for trade, logistics and supply chain

is an important service industry in the structure of the national economy, playing a pivotal role in supporting, connecting, and promoting socio-economic development of the whole country as well as each locality, contributing to improving the competitiveness of the economy

As one of the leading company in this industry, DHL appears well-positioned for continued growth and success The company's global reach, spanning over 220 countries and territories, provides an unrivaled network of logistics and shipping infrastructure Its strong brand reputation, synonymous with quality and innovation, attracts a loyal customer base And its diversified portfolio of logistics and shipping services caters to a wide range of industries and customer needs

To delve into the financial underpinnings of this industry leader, I would like to scrutinize DHL's financial statement report, unveiling the company's financial health, performance trends, and prospects for future growth

This study is my personal analyze of data from 2021 to the present in order to evaluate the firm and estimate future business performance Despite making specific effort in the writing process, it is impossible to prevent mistakes owing to several limits in knowledge I hope to receive your comments to make the essay more complete

TABLE OF CONTENT

PART I: OVERVIEW OF THE COMPANY

1.1 Business information

1.2 History of company

PART II: DHL’S FINANCIAL PERFORMANCE AND PROSPECTIVE

2.1 Analysis of financial reports

2.1.1 Liquidity ratio

2.1.2 Solvency Ratios

2.1.3 Profitability ratio

2.1.4 Efficiency ratios

2.2 FINANCIAL POSITION

2.2.1 Comparision

2.2.2 Prospective of the company in the future

CONCLUSION

REFERENCES

1.1 Business information

Name: Deutsche Post DHL Group

Headquarters: Bonn, Germany

Founders: Adrian Dalsey, Larry Hillblom, Robert Lynn

Founded: September 25, 1969, San Francisco, California, United States

Number of employees: 586,404 (Q1 2023)

Ticker: DHL

Stock exchange centers: Frankfurt

Type of Business: Subsidiarity

Area served: Worldwide

Industry: Courier

Website: https://www.dhl.com/

1.2 History of company

DHL International GmbH (DHL) is an international courier, package delivery, and express mail service, which is a division of the German logistics firm Deutsche Post Deutsche Post DHL (originally abbreviated Dalsey, Hillblom, and Lynn) Group is a German supply chain management and package delivery multinational company that provides international parcel shipping and contract logistics

The company was founded in 1969 by Adrian Dalsey, Larry Hillblom, and Robert Lynnin San Francisco, USA Since its establishment, the company demonstrated a strong growth pattern in its operations and key financial indicators to expand its service throughout the world by the late 1970s In 1979 the company flew under the name DHL Air Cargo with two DC3 and four DC6 aircraft with an inter-island freight service to the Hawaiian Islands Adrian Dalsey and Larry Hillblom personally oversaw day-to-day operations until their final bankruptcy closed in 1983

At peak times, DHL Air Cargo employed just over 100 employers, managers, and pilots

In 1998, Deutsche Post began purchasing DHL shares It reached controlling interest in

2001 and acquired all outstanding shares By December 2002, the company then absorbed DHL into its Express division, while expanding the use of the DHL to other divisions, business units and subsidiaries of Deutsche Post

Today DHL Express shares its DHL brand with business units such as DHL Global Forwarding and DHL Supply Chain It was established in the United States when

August 2003, Deutsche Post took over Airborne Express and began integrating it into DHL's group

1.3 Business model

: DHL collaborates with various partners such as airlines, shipping companies, customs authorities, and local delivery services to ensure efficient and reliable logistics operations

: DHL's key activities include international and domestic shipping, freight transportation, warehousing, customs clearance, and supply chain management They also invest in technology and infrastructure to support their operations

: DHL's key resources include a global network of transportation and distribution centers, advanced technology systems for tracking and managing shipments,

a strong brand reputation, and a skilled workforce

: DHL offers a range of value propositions to its customers, including fast and reliable delivery, end-to-end supply chain solutions, customs expertise, real-time tracking, and personalized customer service

: DHL serves a diverse range of customer segments, including individuals, small businesses, e-commerce companies, multinational corporations, and industries such as healthcare, automotive, and retail

: DHL focuses on building strong customer relationships through personalized service, proactive communication, and efficient problem-solving They also offer online platforms and tools for customers to track and manage their shipments s: DHL utilizes various channels to reach its customers, including online platforms, sales teams, call centers, and partnerships with e-commerce platforms and retail outlets

: DHL generates revenue through various streams, including shipping fees, warehousing and storage fees, customs brokerage fees, value-added services, and supply chain consulting

: DHL's cost structure includes expenses related to transportation, warehousing, technology infrastructure, employee salaries, marketing, and regulatory compliance

: DHL tracks key metrics such as on-time delivery rates, customer satisfaction scores, revenue growth, market share, and operational efficiency to measure its performance and make strategic decisions

than 200 countries and territories and around 350,000 employees Their main business segment is focused on express delivery and logistics services, including transportation, warehousing, and distribution DHL is also organized into six operating divisions, each of the divisions is managed from its own division headquarters and is divided into functions, business units and regions for reporting purposes which are:

: As Europe's largest postal company, DHL workforce of some 118,600 mail couriers deliver around 49 million letters and 5.9 million parcels in Germany every working day via their nationwide transport and delivery network The products and services in the Letter Communication segment are aimed at both private and commercial customers and range from physical and hybrid letters to special products for the delivery of goods and include additional services such as registered mail, cash on delivery and valuables

: Express division, they transport documents and urgent goods reliably and on time from door to door DHL global network includes more than 220 countries and territories, with around 111,000 employees, they serve around 2.7 million customers The division's main product is Time Definite International (TDI) Their TDI services enable delivery at predefined times and their expertise in customs clearance keeps shipments moving as a prerequisite for fast and reliable door-to-door service

: Their air, ocean and overland freight forwarding services include standardized transports as well as multimodal and sector-specific solutions, together with customized industrial projects, which are around 43,000 employees in over 150 countries deliver for more than 175,000 customers Their business model is based upon brokering transport services between customers and freight carriers

: As a global leader in the contract logistics market, their 168,000 employees support in helping more than 1,400 customers in more than 50 countries manage their supply chains This is their profitable core business and includes warehouse and transport as well as value added services as fulfillment, Lead Logistics Partner (LLP), Real Estate Solutions, Service Logistics and packaging solutions for strategic industrial sectors They also develop innovative and sustainable solutions

Since the financial year 2019, DHL has been pooling their international parcel delivery operations in the new eCommerce Solutions division The

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new division is geared towards providing high-quality solutions, particularly to customers

in the rapidly growing e-commerce sector

DHL’s sector-specific expertise spans multiple sectors and specialty areas, offering

customer-tailored solutions that best match in industry’s logistics requirements With

dedicated teams of experts, they remain at the forefront of sector developments such as

Auto-Mobility; Chemicals; Consumer; Energy; Engineering and Manufacturing; Life

Sciences and Healthcare; etc which constantly adapt portfolio to customers’demand

PART II: DHL’S FINANCIAL PERFORMANCE AND PROSPECTIVE

2.1 Analysis of financial reports

Year 2020 2021 2022 Q3 2023

Current Ratio 1.05 1.09 0.99 0.94

Quick Ratio 1.03 1.06 0.95 0.89

Cash Ratio 0.33 0.23 0.14 0.18

The data above shows that there is decreasing trend in Current Ratio and Quick Ratio

from 2020 to the third quarter of 2023 may indicate potential challenges in maintaining

short-term liquidity.While the increasing trend in the Cash Ratio suggests an

improvement in the company's ability to cover short-term obligations with cash

The Current Ratio is a liquidity ratio that measures a company's ability to cover its

short-term liabilities with its short-short-term assets It is calculated by dividing current assets by

current liabilities A ratio above 1 indicates that a company has more current assets than

current liabilities, suggesting good short-term liquidity A current ratio below 1 indicates

that a company may have difficulty covering its short-term liabilities with its available

short-term assets

In the recent quarter, DHL Group has a current ratio of 0.94 It indicates that the

company may have difficulty meeting its current obligations Low values, however, do

not indicate a critical problem If DHL Group has good long-term prospects, it may be

able to borrow against those prospects to meet current obligations

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term liabilities with its most liquid assets, excluding inventory A further decrease in the quick ratio to 0.89 suggests a potential decrease in the company's ability to cover short-term liabilities with its most liquid assets The lower ratio may indicate increased risk in meeting short-term obligations without relying on the sale of inventory

A liquidity ratio called the Cash Ratio assesses how much cash and cash equivalents a business has available to meet its short-term obligations greater immediate liquidity is indicated by a greater ratio With a cash ratio of 0.14 in 2022, DHL held assets equal to 14% of its current liabilities in cash and cash equivalents Since this is also the lowest level of immediate liquidity during the analysis period, the company's only means of meeting short-term commitments may be credit or other liquid assets

Year 2020 2021 2022 Q3 2023 Debt-to-Asset

Ratio

Debt-to-Equity Ratio

Interest

Coverage

Ratio

The Debt-to-Asset Ratio measures the proportion of a company's assets that are financed

by debt A Debt-to-Asset Ratio of 0.31 in 2021 suggests that around 31% of DHL's assets were financed by debt A decrease in this ratio over the years, from 0.33 in 2020 to 0.030

in 2022, suggests a significant reduction in the reliance on debt for financing A lower ratio typically indicates lower financial risk associated with debt

Similar to the Debt-to-Asset Ratio, the decreasing trend in the Debt-to-Equity Ratio indicates a reduction in the use of debt in DHL's capital structure A lower ratio implies less financial leverage and potential lower interest-related financial risk

The ratio dropping to approximately 0.00 in Quarter 3, 2023, suggests a significant shift, with little to no debt in the capital structure This can be a positive sign, indicating reduced financial leverage and potentially lower interest-related financial risk Actually, the data of Debt in 2023 has not been updated yet, I thus fill in the table with an

may be used to pay interest Better coverage is indicated by a greater ratio The Interest Coverage Ratio dropped from 13.46 in 2021 to 8.46 in the first nine months of 2023, indicating a decline in DHL's capacity to pay interest costs out of operating profits Even

if the ratio is still positive, a lower number would be cause for concern, and further research is required to determine the causes of the shift

The aforementioned data indicates that DHL has lessened its reliance on debt in its capital structure, as seen by the lowering Interest Coverage Ratio, Debt-to-Asset and Debt-to-Equity Ratios On the other hand, the decrease in interest coverage indicates a potential increase in financial risk related to interest payments

Year 2020 2021 2022 Q3 2023 Gross Profit

Margin

Net Profit

Margin

Return on

Assets (ROA)

Return on

Equity (ROE)

In the 2021 financial year, despite the pandemic's impacts, global trade overall took off, resulting in increased shipments All divisions of Deutsche Post DHL Group managed to considerably increase revenue, profits and margins in some cases In total, Group EBIT came to €8.0 billion and exceeded the most recent figure of more than €7.7 billion However, the data witnessed some declines in Gross Profit Margin, Net Profit Margin, Return on Assets, and Return on Equity of DHL in the following period from 2021 to second half of 2023 which may indicate challenges in maintaining or improving profitability and efficiency

A company's profitability is assessed by its gross profit margin, which shows what proportion of revenue is more than the cost of products sold The gross profit margin's downward trend from 17.65% in 2020 to 14.58% in the third quarter of this year points to