|Bid||40.68 x 90000|
|Ask||40.67 x 463000|
|Day's range||40.03 - 40.77|
|52-week range||19.10 - 43.50|
|Beta (5Y monthly)||1.24|
|PE ratio (TTM)||20.16|
|Earnings date||10 Nov 2020|
|Forward dividend & yield||1.15 (2.83%)|
|Ex-dividend date||28 Aug 2020|
|1y target est||35.77|
(Bloomberg Opinion) -- In normal times, globe-spanning logistics groups such as Deutsche Post AG, FedEx Corp. and United Parcel Service Inc. quietly keep the economy humming.Covid-19 has recast that unassuming role in a more heroic light. When the pandemic history is written, the logistics industry will deserve a volume. “UPS-ers are essential workers,” the U.S. company’s boss Carol Tome told investors recently.Their most important task — quickly and safely delivering billions of doses of a coronavirus vaccine worldwide — still lies ahead. The massive demand and the ultra-cold temperatures required to store some promising vaccine candidates (including the one developed by Pfizer Inc. and BioNTech SE) will provide an unprecedented logistical challenge.Thanks to early preparation and heavy investment, the companies think they’re in good shape to tackle it. Happily for shareholders, the vaccine effort could further juice the industry’s strong recent earnings and share price performance.The logistics groups have been under immense strain, so it’s hard to begrudge them their good fortune. Bulk deliveries were hit early in the pandemic when businesses and factories were closed, so couriers suddenly had to deliver more to residential addresses, which is more expensive. When land borders closed and passenger planes were grounded, the industry was also called upon to get personal protective clothing and ventilators where they were needed.Right now, the companies are focused on saving Christmas. An unprecedented volume of holiday gifts will be purchased online this year. Deutsche Post’s DHL express-delivery unit expects holiday season volumes to be more than 50% higher than in 2019.As housebound populations “buy more stuff,” the big parcel networks have pounced on the golden opportunity, hiring tens of thousands of workers. Most businesses have imposed surcharges on customers to reflect the difficulty of delivering during a pandemic.Because of their large fixed costs, express-delivery networks make more money when more packages flow through them. Deutsche Post’s operating profit jumped by almost half year-on-year in the July to September quarter. The German company expects full-year free cash flow to exceed 2 billion euros ($2.4 billion) and operating profit of up to 4.4 billion euros, a record. Since a March low, its shares have doubled. FedEx’s have almost trebled.Airfreight has become particularly lucrative. Much of the world’s air cargo normally travels in the bellies of passenger jets, which have been grounded. Deutsche Post and FedEx benefit from their absence because each company owns hundreds of dedicated airfreighters. Shipping an estimated 10 billion doses of the vaccine will make yet more demands of airfreight, requiring some 15,000 flights over the next two years, Deutsche Post estimated in a recent study.(1)Some potential vaccines will need to be stored at very low temperatures, which plays to the strengths of big logistics providers. UPS has invested in two giant “freezer farms” in Kentucky and the Netherlands, capable of storing millions of doses at temperature as low as -80 Celsius. FedEx has more than 90 cold chain facilities worldwide and plans more.Coupled with the existing shortage of airfreight capacity, the exacting handling requirements could inflate shipping costs. Detlef Trefzger, chief executive officer of Kuehne + Nagel International AG, a big freight forwarder, said recently that his company wasn’t a government body and therefore the market rate “will be applicable.” Berenberg analysts say vaccine delivery could create a period of “supernormal” profits in logistics. In theory, once a vaccine is widely available, the favorable pricing dynamics supporting the industry will normalize somewhat. Deutsche Post, FedEx and UPS shares fell on Monday, even as the stock market surged.However, the e-commerce shift is likely to be permanent, and analysts say airfreight markets could remain tight for at least a couple more years. If a vaccine leads to increased trade flows, the logistics groups will benefit.As with Amazon.com Inc., the delivery industry risks a backlash if it’s seen to profit excessively from the pandemic. But if vaccines are delivered safely and our holiday gifts arrive on time, the companies will have earned our gratitude, and a commensurate reward.(1) The 10 billion dose estimate is based on 70% of the global population requiring vaccination to achieve herd immunity, and an average of 1.8 doses per recipient.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- U.S. Postmaster General Louis DeJoy is testifying before Congress to defend his management of the Postal Service amid concern over voting by mail and the integrity of the November election. Democrats have questioned whether recent slowdowns and cutbacks at the post office under DeJoy may be part of an effort to suppress voting orchestrated by President Donald Trump, according to Bloomberg News. DeJoy told a Senate committee that allegations that cutbacks at the post office are aimed at having an impact on the November election are an “outrageous claim.” DeJoy said he’s simply trying run the Postal Service, which loses money, more efficiently and like a business.Bloomberg Opinion figured it would be a good time to see how mail delivery works in other parts of the world, and whether the types of issues that are in focus in the U.S. exist elsewhere. Here are the results: Germany's Publicly-Traded Post OfficeGermany will mark the 20-year anniversary of its postal service becoming a publicly traded company in November. Today, Deutsche Post AG boasts a 47 billion euro ($56 billion) market capitalization, is nicely profitable, employs more than half a million people and is held in generally high esteem by the public. The shrinking German letters business accounts for just 15% of its 63 billion euros total revenues; services such as express delivery, freight forwarding and e-commerce make up the rest.Yet for all its profits and solid management, Deutsche Post is hardly the corporate embodiment of Ayn Rand. It’s still obliged to deliver domestic mail six days a week, the unionized German workforce sometimes goes on strike and the state still owns one-fifth of the shares via the KFW development bank. Retaining the state as an anchor shareholder has boosted Deutsche Post’s credit standing, allowing it to borrow cheaply. Before becoming a public company, it also transferred a big chunk of civil servant pension liabilities to the government, lightening a burden that weighs heavy on the U.S. Postal Service.While there are occasional gripes about service quality and rising postage costs, Deutsche Post is a regulated entity and no longer much of a political football. Public aversion to post office closures was overcome by allowing independent retail stores to operate small postal franchises, which are open longer. Customers can also collect internet shopping from unstaffed parcel machines and buy stamps online. And voting by mail has steadily risen to almost 30% of votes cast in the German federal election, and is uncontroversial. — Chris BryantThe U.K.’s Royal Mail: Essential Yet StrugglingAt the peak of the pandemic in April, a British postman managed to deliver a parcel labelled “vital survival stuff” whose address was simply “somewhere in Sheffield.” The postman located the addressee through Facebook and delivered the package of chocolate bars from a sender in Sweden.Apart from that, things have been pretty grim at Royal Mail, Britain’s privatized mail service, which is struggling to modernize in the face of labor opposition. It has recently faced job cuts and restructurings, threats of strike action, walkouts over poor safety measures (four postal workers have died from Covid-19) and a 1.5 million pound ($1.96 million) fine for tardy delivery of first-class mail and overcharging customers for stamps.Royal Mail has a universal service obligation, and is required to make deliveries six times a week around the country, so it is limited on the cost-cutting side. Somewhat confusingly, it was separated in 2012 from the state-controlled Post Office, which runs the network of over 11,600 branches that provide handles postal as well as government and financial services. Post Office branches are largely run by franchise partners and independent retailers, often known as subpostmasters, who are paid a fixed fee or commission. The number of branches has halved over the years, but 99% of the U.K. population must still be within three miles, and 90% within one mile, of an outlet. And yet it too has had to grapple with changing demand in the the digital age, a shrinking revenue base and court battles with stakeholders.Whatever their respective struggles, Brits seem attached to both services, for different reasons. The decline of old-fashioned mail and the rise of Amazon.com have not shaken belief that a universal service obligation for mailed communications, symbolized by those iconic red pillar boxes that have been around since 1852, is part of the social contract. More than 18% of ballots cast in the 2019 general election were postal ballots.As for the Post Office, for all the concerns about branch closures and declining profits, it made an operating profit of 40 million pounds in 2019. A 2016 study put the social value of the Post Office — what people were willing to pay for its services — at between 4.3 billion pounds and 9.7 billion pounds. — Therese RaphaelJapan’s Post Office Is Bigger Than CitigroupWhat’s Japan’s largest financial company after Mitsubishi UFJ Financial Group Inc.? By some measures, it’s the country’s postal service, Japan Post Holdings Co., with an asset base larger than those of Citigroup Inc. and Wells Fargo & Co.Postal savings banks have been around almost as long as state postal services, and Japan’s has long been a behemoth. Since the late 19th century, much of its wealth was built upon deposits taken in the country’s post offices and reinvested in nation-building infrastructure. Thanks to income from Japan Post’s separately-listed banking and insurance arms, the parent company is forecast to make 280 billion yen ($2.65 billion) of net income this year despite its core postal business not earning a cent. To be sure, life as a Japanese bank in the 21st century isn’t all that more lucrative than existence as a postal service — especially when, as has historically been the case, you’re obliged to invest in negative-yielding Japanese government debt. The parent company and Japan Post Bank Ltd. have each lost almost half their equity value since a 2015 initial public share offering. Still, analysts expect the group as a whole to make stable profits well into the current decade, and retail investors continue to sock their money away. The 4.48 trillion yen increase in deposits in the June quarter was the biggest in records dating back to 2014. There are worse ways of keeping a public service in operation without draining the public purse. — David FicklingAustralia Post Is Looking to PivotThe coronavirus pandemic has underscored the ways that Australia Post has been torn in two directions in recent years. For years, the balancing act pursued by its managers has been around minimizing costs from its loss-making letter delivery arm while maximizing its profits from parcels, where its dominant position has helped it prosper from growing volumes of online shopping.Letter volumes have fallen by more than half since 2008, and one of the first moves AusPost made was to switch to deliveries only every second day, rather than daily — a temporary measure that few would be surprised to see become permanent. At the same time, parcel volumes were up around 50% or more on usual levels at the peak of the lockdown, and the company is looking to increase the frequency of deliveries to handle the flood.Growing numbers of parcels will lift revenues, but they may cause margins to narrow, too. AusPost has had to pay third parties to make deliveries because it doesn’t have enough staff to handle the surge. Its fleet of delivery motor scooters looks increasingly obsolete, too, in an era when vans are needed to cope with growing volumes of bulky packages. After a flurry of interest in privatization earlier this decade, that talk has long since died down. The more likely outcome would be less frequent, costlier letter deliveries so that core business is finally able to stand on its own feet. — David FicklingThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is the Executive Editor for Bloomberg Opinion. He is the former global Executive Editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Jennifer Morgan broke new ground when she became the first woman to run one of Germany’s top-30 listed companies. Her tenure lasted less than a year.Software giant SAP SE appointed Morgan as co-chief executive officer in October alongside Christian Klein. It was heralded as a sign of progress for male-dominated corporate Germany, where a board member of a public company is more likely to be named Thomas than be a woman. But in the run up to financial results, the company canceled her planned interviews and abruptly announced she’ll be leaving at the end of April. Klein will become the sole CEO.“Germany has a special issue,” Simone Menne, former chief financial officer of Deutsche Lufthansa AG and Boehringer Ingelheim GmbH said. “There are still male voices saying there are no women in our industries who are capable of being senior leaders.”Menne left her position as CFO of Boehringer in 2017 following conflicts with chief executive officer Hubertus von Baumbach. Before she took the job, Menne had said in an interview that she wanted to run a company in the DAX, the index for the country’s 30 biggest publicly traded companies.But after three stints as CFO, Menne was never able to become CEO. A woman wouldn’t hold that role at one of the largest companies in the country until Morgan’s appointment in 2019. Menne now runs an art gallery and sits on the supervisory boards of BMW and Deutsche Post AG. She called Morgan’s departure “a disaster.”“We maintain our commitment to equal opportunities, for which we are seen as frontrunners. I read some comments that now even advise women not to pursue management careers. This does women in particular a disservice. After all, we should be encouraging them to take on top jobs, not discouraging them!” SAP’s German head of human resources Cawa Younosi said in an emailed response. “In my opinion it is important not to fall into stereotypes, to resist the triggers and not to generalize an individual case.”SAP blamed the Covid-19 pandemic for causing problems with its leadership structure saying the company will now shift to a lone CEO to provide a clearer management arrangement. Co-CEO models are becoming increasingly unpopular at software companies, because they can slow decision making and breed power struggles.Morgan didn’t respond to requests for comment.Read more: Software Companies Abandon Co-CEOs, Exposing the Model’s RisksThe leadership structure was disorganized and, at times, chaotic, a person familiar with the matter said at the time. With Morgan running the business in the U.S. and Klein in Germany, it took longer to get things done because, in certain instances, managers needed sign off from two different CEO offices, this person said, asking not to be named discussing the company’s internal dynamics.Over time, two distinct power centers emerged, the person said. Klein, who was based at the company’s headquarters in Germany also benefited from his close ties to Chairman Hasso Plattner, the person said.Management teams of listed German companies are predominantly male economists from the western side of the country in their mid-fifties, according to a report last year by the AllBright Foundation, a nonprofit that aims to promote diversity among business leaders. In the U.S.’s top 30 companies by market value, about 28% of the board members are female executives, according to the report. In Sweden’s top 30, that figure is about 23%. But in Germany, the DAX has about 15% in this powerful position.Still, the country, which has been run by a female chancellor for the last 15 years, is trying to change.In 2016, Parliament enacted a law that requires 30% of non-executive board members of German-headquartered companies must be women. In German companies, the board is split into a non-executive supervisory board and a management board. The supervisory board holds management accountable and makes decisions about the direction of the company.German families minister Franziska Giffey is proposing to introduce a quota for the executive board for publicly traded companies with more than 2,000 employees and at least four board positions.Janina Kugel, the former chief human resources officer at Siemens AG, said that getting a critical mass of women in top positions is vital to ending stereotypes of female leaders in Germany.“There is generally little openness or experience of diversity in Germany, not just with regards to gender,” said Kugel, who left Siemens in January. “I fear that the crisis is being used as an excuse to go back on issues like diversity.”Germany suffers from structural discrimination that stems from lack of legislation, she said.From a psychological standpoint, being around people from a similar background may make executives feel more secure when a business environment is unstable, said Philine Erfurt Sandhu, a lecturer at the Berlin School of Economics and Law.“Although diversity is needed more than ever for good decision making at the top, I am currently witnessing a reversal in Germany. Business leaders are looking for a sense of certainty among similar peers,” Sandhu said. “John likes to be with Johnny.”(Updates with additional comment from Kugel in 17th paragraph. A previous version of this story corrected data on women board members.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.