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Development of business units

Development in the first half of 2022

  •  Still a very positive market environment overall.

  • Significant improvement in profits, particularly in air and ocean freight.

  • Comprehensive measures to improve efficiency and digitalization.

DB SCHENKER

H 1

Change

H 1

2019

2022

2021

absolute

%

 Land transport shipments (million)

53.2

56.3

– 3.1

– 5.5

53.9

Air freight volume (export) (thousand t)

673.3

712.1

– 38.8

– 5.4

578.9

Ocean freight volume (export)
(thousand TEU)

966.2

1,000

– 33.8

– 3.4

1,115

Total revenues 1) (€ million)

14,162

10,432

+ 3,730

+ 35.8

8,525

External revenues 1) (€ million)

14,129

10,396

+ 3,733

+ 35.9

8,491

Gross profit margin 1) (%)

30.6

33.3

– 2.7

35.9

EBITDA adjusted  1) (€ million)

1,486

906

+ 580

+ 64.0

499

EBIT adjusted  1) (€ million)

1,186

620

+ 566

+ 91.3

238

EBIT margin 1) (adjusted) (%)

8.4

5.9

+ 2.5

2.8

Gross capital expenditures (€ million)

299

249

+ 50

+ 20.1

261

 Employees 1) as of Jun 30 (FTE)

75,424

73,840

+ 1,584

+ 2.1

75,981

Average employees (FTE)

75,626

74,215

+ 1,411

+ 1.9

76,041

1) Figures for first half of 2021 and as of June 30, 2021, adjusted due to Uintragroup reassignment of the FLS business area.

The volume trend was down overall. The absence of catch-up effects following the Covid-19-related losses in the first half of 2021 and the generally weak market development due, among other things, to Covid-19-related restrictions in Asia and disruptions in the supply chains could only be partially offset.

Economic development, driven by air and ocean freight, was very encouraging: operating profit figures rose very significantly in all regions. As a result, gross profit also improved noticeably (+24.7%). Adjusted for exchange rate effects, the increase was somewhat less pronounced.

Income development was very positive, driven by strong revenue growth:

  • Revenues increased significantly as a result of higher freight rates, in particular in air and ocean freight and as a result of exchange rate effects. Demand development had a dampening effect in the opposite direction.
  • Other operating income (+ 20.4%/€ +21 million) increased slightly at a low level. The reason for this included higher income from the release of provisions.

Expenses were driven mainly by freight rate developments. Effects from measures to improve productivity had the opposite effect:

  • Cost of materials (+ 40.2%/€ +2,837 million) increased due to the development of freight rates, particularly in air and ocean freight. Exchange rate effects also had the effect of increasing expenses.
  • Personnel expenses (+ 11.5%/€ +203 million) increased significantly as a result of the higher average number of employees and due to exchange rate effects.
  • The considerable increase in other operating expenses (+ 16.2%/€ +130 million) resulted, among other things, from higher expenses for advertising in connection with IT projects and exchange rate effects.
  • Depreciation (+ 4.9%/€ +14 million) increased due to capital expenditures (including leasing). In addition, exchange rate effects had the effect of increasing expenses.

Capital expenditure activities increased. The increase was mainly due to leasing activities. Europe continued to be the main focus of capital expenditures. Adjusted for exchange rate effects, the increase was somewhat less pronounced.

The number of employees was above the level as of June 30, 2021. More complex work processes related to Covid-19 resulted in additional new hires, in particular in air and ocean freight.

  • The increase in demand for international transport is more than offset by the decline in domestic transport.

  • Quality improvements with positive effects.

  • An additional increase in demand for the digital platforms Connect4land and Drive4Schenker – focus on further development of digital services.

LAND TRANSPORT LINE OF BUSINESS

H 1

Change

H 1

2019

2022

2021

absolute

%

 Land transport shipments (million) 

53.2

56.3

– 3.1

– 5.5

53,9

Total revenues 1) (€ million)

3,846

3,443

+ 403

+ 11.7

3,638

External revenues 1) (€ million)

3,835

3,434

+ 401

+ 11.7

3,606

EBITDA adjusted 1) (€ million)

238

198

+ 40

+ 20.2

175

EBIT adjusted 1) (€ million)

140

110

+ 30

+ 27.3

95

 Employees 1) as of Jun 30 (FTE)

22,846

21,911

+ 935

+ 4.3

21,868

1) Figures for first half of 2021 and as of June 30, 2021, adjusted due to intragroup reassignment of the FLS business area.

In land transport, demand declined due to declines in parcel and direct transport in particular, after the first half of 2021 was characterized by Covid-19-related catch-up effects.
The decline in the shipment figures for direct transports is largely due to the effect of the FLS transaction. System and special transports were roughly on a par with the first half of 2021.

Economic development, on the other hand, was encouraging: operating profit figures developed positively as a result of a disproportionate increase in income:

  • Revenues increased, mainly as a result of a general rise in selling prices. Demand development had a dampening effect in the opposite direction. Adjusted for exchange rate effects, the increase was somewhat less pronounced.
  • Other operating income decreased as a result of lower carrying amount gains on the disposal of fixed assets.

Developments on the expense side were characterized by more cost-intensive processes in the areas of direct, system and special transport due to the Covid-19 pandemic. Compared to income, the increase was disproportionately low:

  • Personnel expenses increased as a result of a higher number of employees.
  • Other operating expenses increased due to the reclassification of IT expenses within the business unit with no effect on profit or loss.
  • The cost of materials was approximately at the level of the first half of 2021. Decreases in demand were fully offset by higher prices and negative exchange rate effects.

The number of employees increased significantly due to a trans­fer of temporary workers to fixed employment in Germany and the Vähäla acquisition in Finland in October 2021.

  • Slight decline in demand due to weak market momentum.

  • Capacity shortages and Covid-19-related uncertainties continue to shape development, in particular in ocean freight.

  • A further increase in freight rates as a result of the war in Ukraine.

  • Air freight: various measures implemented to safeguard transport operations, standardization and productivity improvements. 

  • Ocean freight: projects to improve efficiency and optimize organization implemented worldwide.

AIR AND OCEAN FREIGHT LINE OF BUSINESS

H 1

Change

H 1

2019

2022

2021

absolute

%

 Air freight volume (export) (thousand t)

673.3

712.1

– 38.8

– 5.4

578.9

Ocean freight volume (export)
(thousand TEU)

966.2

1,000

– 33.8

– 3.4

1,115

Total revenues (€ million)

8,683

5,545

+ 3,138

+ 56.6

3,531

External revenues (€ million)

8,680

5,543

+ 3,137

+ 56.6

3,530

EBITDA adjusted (€ million)

977

481

+ 496

+ 103

128

EBIT adjusted (€ million)

943

450

+ 493

+ 110

101

 Employees as of Jun 30 (FTE)

14,079

13,107

+ 972

+ 7.4

13,972

Performance development declined:

  • In global air freight, negative effects, mainly caused by the war in Ukraine and shutdowns in China, could not be offset.
  • In ocean freight, volumes were also slightly below the low level of the first half of 2021 in line with market developments. Equipment and capacity shortages, alongside the tense market situation due to Covid-19, were only partially offset by volume growth on transpacific routes and between Asia and Europe.

Economic development was very encouraging. The adjusted operating profit figures improved due to the significant increase in revenues, in particular in ocean freight:

  • Revenues increased significantly, due in part to the growth in freight rates. Performance development had a dampening effect. In air freight, the trends of the previous year were boosted by capacity-limiting measures (in particular airspace closures and sanctions). At the same time, it was persistently difficult in some cases to pass on higher rates to customers. Adjusted for exchange rate effects, the increase in revenues was somewhat less pronounced.
  • Other operating income increased at a low level, partly as a result of lower effects from the release of provisions.

On the expense side, the development of freight rates was particularly noticeable:

  • The cost of materials increased significantly, mainly as a result of freight rate developments and exchange rate effects.
  • Other operating expenses increased due to the reclassification of IT expenses within the business unit with no effect on profits.
  • Personnel expenses increased as a result of a higher number of employees, partly due to performance-related factors, and also as a result of exchange rate effects.

The number of employees increased significantly. More complex work processes brought about by Covid-19 resulted in additional new hires.

  • Significant recovery of business activities following more stringent restrictions as a result of the Covid-19 pandemic.

  • Growth drivers are Asia/Pacific and America – effects from the war in Ukraine are curbing development in Europe.

  • Measures to improve productivity and profitability are currently being implemented.

CONTRACT LOGISTICS LINE OF BUSINESS

H 1

Change

H 1

2019

2022

2021

absolute

%

 Total revenues (€ million)

1,616

1,422

+ 194

+ 13.6

1,356

External revenues (€ million)

1,615

1,421

+ 194

+ 13.7

1,355

EBITDA adjusted (€ million)

236

188

+ 48

+ 25.5

165

EBIT adjusted (€ million)

101

61

+ 40

+ 65.6

41

 Employees as of Jun 30 (FTE)

23,114

23,888

– 774

– 3.2

24,293

The development in contract logistics followed overall market trends thanks to the business line’s geographically and sectorally diversified portfolio. There was also a slight increase in market share across the board. Development in Europe was curbed by a slow recovery in the automotive business, restructuring measures and the war in Ukraine, among other factors.

The economic development was very encouraging in a challenging market environment. Adjusted operating profit figures rose, driven by above-average income gains in particular:

  • Revenues grew, driven by a continued recovery after the Covid-19 restrictions. Trends in the automotive sector stabilized, although the ongoing semiconductor shortage continued to have a dampening effect. The electronics and consumer sectors in particular developed positively. Adjusted for exchange rate effects, the increase was somewhat less pronounced.
  • Other operating income also increased as a result of reversals from provisions for impending losses and the sale of assets at a low level.

In terms of expenses, the recovery in demand was particularly noticeable:

  • Cost of materials increased in line with revenue development and as a result of exchange rate effects.
  • Personnel expenses also increased as a result of business development. Exchange rate effects also had the effect of increasing expenses.
  • Other operating expenses increased due to higher expenses for temporary workers as a result of increased business development. Exchange rate effects also had the effect of increasing expenses.
  • Depreciation increased significantly as a result of the conclusion of lease contracts for storage capacity.

The number of employees fell slightly, due in part to higher productivity and a tense labor market.

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