Earnings call transcript: Deutsche Post Q3 2025 sees revenue dip, stock rises 5.25%

Deutsche Post AG reported a 2.3% decline in revenue for the third quarter of 2025, primarily due to foreign exchange effects. Despite the revenue drop, the company saw a 7.6% increase in EBIT, excluding non-recurring items, which contributed to a positive market reaction. The stock rose 5.25% in pre-market trading, reflecting investor confidence in the company’s strategic initiatives and cost optimization efforts.

Key Takeaways

• Revenue decreased by 2.3%, affected by a 2.4% foreign exchange impact.
• EBIT rose by 7.6%, bolstered by strong cash flow and cost optimization.
• The stock surged 5.25% following the earnings report.
• Continued focus on AI deployment and infrastructure investments.
• Maintained full-year 2025 guidance despite market challenges.

Company Performance

Deutsche Post AG demonstrated resilience in Q3 2025, with EBIT growth and strong cash flow generation offsetting the revenue decline. The company continued its share buyback program, completing 4.4 billion euros by September. Despite challenges in global trade, Deutsche Post maintained its market position in key trade lanes and focused on high-value goods.

Financial Highlights

• Revenue: 20.08 billion, down 2.3% year-over-year.
• Earnings per share (EPS): Not specified in the earnings call summary.
• EBIT: Increased by 7.6%, excluding non-recurring items.
• Free cash flow target: On track for 3 billion euros by year-end.

Outlook & Guidance

Deutsche Post reaffirmed its full-year 2025 guidance and is preparing for a seasonal B2C peak in Q4. The company is also focusing on growth in specialized verticals, such as cold chain and pharmaceutical logistics, while emphasizing structural improvements for 2026.

Executive Commentary

• "We do not expect that volatility will go down. We will stay close to our customers." - Tobias, Group CEO
• "The narrative of regionalization is a Western perspective, and it’s not a global perspective." - Tobias, Group CEO
• "We are aware that additional momentum is needed." - Tobias, Group CEO

Risks and Challenges

• Foreign exchange volatility impacting revenue.
• Shifts in global trade dynamics, particularly with China’s export patterns.
• Potential policy changes affecting US trade lanes.
• Competitive pressures in key trade lanes.
• Need for continued cost optimization.

Q&A

Analysts inquired about the impact of de minimis policy changes, which were less severe than initially expected. Discussion also covered express volumes, with B2C volumes down 23% and B2B volumes down 2%. The company emphasized its ongoing focus on strategic investments and cost optimization to navigate these challenges.

Full transcript - Deutsche Post AG (DHL) Q3 2025:

Conference Call Operator: Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the DHL Group Conference Call. Please note that the call will be recorded. You can find the privacy notice on dhl.com. Throughout today’s presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you wish to ask a question, we ask that you please use the raise hand button at the bottom of your Zoom screen. If you have dialed in, please select star nine to raise your hand and star six to unmute. Instructions will also follow at the time of Q&A. I would now like to turn the conference over to Martin Ziegenbalg, Head of Investor Relations. Please go ahead.

Martin Ziegenbalg, Head of Investor Relations, DHL Group: Thank you, and a warm welcome from my side to the Q3 2025 results call. As it says on the title, I have here with me our Group CEO, Tobias, and the Group CFO, Melanie. We aim to cover all ground within the next hour or so. Therefore, without losing any further time, over to you, Tobias.

Tobias, Group CEO, DHL Group: Yeah, thank you, Martin. Thank you all for participating in this call and your interest in our company. On page two, the highlights for the quarter. Firstly, on the short term, dealing with the changes in the global landscape, particularly the outfall of the changes in U.S. trade policy. Within the quarter, we had the abolishment of the de minimis also for the rest of the world. I think we have been able to deal with that very effectively by adjusting and shifting capacity, especially in our more asset-intensive global transportation networks, that being Express especially, to do adequate yield management. To overall mitigate the impact on the U.S. trade lanes and continue to take advantage where there is growth. We will talk about where there is growth in a minute.

What is also very important to us is not to only be absorbed with the short term, but continue to spend time and execute measures to accelerate our growth through the focus on the industry verticals that we’ve laid out in our Strategy 2030, but also, and very importantly, to invest in those geographies that are growing and will continue to grow. You know, we have a list of countries which we call GT20, Global Tailwinds 20, with related trade lane development measures. I think we can say that we also made good progress on that in the third quarter. Cash flow generation was strong. Melanie’s going to talk about that in a minute, and we continue to be committed and execute on our promise on attractive shareholder returns through dividends and share buybacks, which also continued in the quarter.

On page three, you see a statistic, a graph that we publish in conjunction with our Global Connectedness Tracker. Those of you who follow us more closely, we have been doing this for some years in collaboration with NYU Stern. We found it worthwhile to highlight that the average distance of trade has continued to grow, actually reaching a record high. There is a strong narrative out there that talks about regionalization and friend-shoring, and there might be reasons for such trends. The fact of the matter is that long-distance trade continues to grow. We have massive shifts that we see in our company, but also beyond, due to the changes in U.S. trade policy. We also see that other trading partners continue to expand. I think most notably, that was visible in the September export figures of China, where trade to the U.S. was down 27%.

You had double-digit growth in the trade with Southeast Asia, with the trade of Europe as well, and particularly the trade to the Middle East and Africa was growing a lot, Latin America as well. These being long-haul trades and that compensating for some of the decoupling that we see as it relates to the U.S., which clearly has a lower share of participation in global trade and is increasingly replaced by China as the most important trading partner for many countries in the world. That is also visible on page four when it comes to our volumes here. A focus on the time-definite international piece, so that specific segment of DHL Express. You see, by and large, the trend from the second quarter continuing, especially the decline on the U.S.-bound trade, the U.S. inbound, that is. We see also some other trades, also U.S.

Exports, being somewhat under pressure as input factors for U.S. producers get more expensive. If aluminum is double the price in the U.S. than it is in other parts of the world, it’s obviously difficult to produce cost-competitive products. That is something that will continue to influence global trade and thereby our customers and the business that we do with them. As spoken, the de minimis now being abolished also for the rest of the world, that had a notable impact on volumes, less so for us on profitability because we were able to counteract that. Also, we see that some volumes are declining that have been not so profitable for us to start with. That also impacts our overall results. The cost action is very important. On page five, you see some details on that. Aviation costs down 8.5% in the quarter.

That’s hard work. We are really pleased to see that. The Express Aviation team has been able to deal with that very professionally. Service was very good in the quarter. We are also really looking forward to the fourth quarter across all divisions. I think we’re very well prepared with our setup to deliver excellent quality. We do that in good balance with strengthening our cost competitiveness. We have adjustments that are more cyclical, ramping down capacity, shifting capacity. On top of that, structural measures, which we have under the program Fit for Growth, really make us a better company in many ways. Cost competitiveness is an important part of our growth journey going forward as well. We see ourselves making good progress on that.

We keep the discipline that you used from DHL Express, but also the other divisions when it comes to yield. That is clearly also supportive of the result in the quarter. Some more examples on P&P on the following page six. Maybe before I go on to the profitability accelerators, it is important to note that the volume in the quarter for P&P had some shifts for some goods carrying products between letter and parcel. There are details in the backup on that. If you look on an organic basis, parcels were up around 2%. We had normal ups and downs in the volume of mail as well. The advertising mail had been quite weak in the third quarter of 2024. Year on year, it looks quite positive. Overall, when it comes to letter volume in Germany, there is no change to any trends.

We still see that on the path that we talked about earlier. Now, coming to the concrete measures that helped us also improve profitability. To the level that we’ve now seen, which is in line with the guidance that we’ve provided, AB Steering. This is something that we can now do to a greater extent because of the lead time extension we got for the standard letter, so that those standard letters are only brought to every address every second day. Staying within the allowed lead time, but allowing for some efficiencies in that last mile and skipping households where we would otherwise only have a single letter on Monday and Tuesday, for instance. Now we bundle that to two letters on Tuesdays. That’s what’s meant with that AB Steering. Joint Delivery is something that we have been on for a long time.

It’s a really big program because it requires us to rebuild infrastructure to a great extent. That is really very important in the long run to strengthen the efficiency of the system to ultimately become a parcel carrier that also carries some mail. We’re now at 69% of parcels being jointly delivered with mail. That’s steadily progressing and supporting the efficiency, much-needed efficiency within P&P. Out of home continues to be a focus. We continue to invest in that. We are as close to consumers as we ever were in Germany. That is strengthening our position in that market. Also on the support functions, we are nimble and efficiency-focused, which you also see in the numbers. Technology plays an important role. On page seven, there are some examples of how we also deploy agentic AI.

Outside Europe, we have support for frontline recruiting, for instance, the pre-qualification, the initial interview. Of somebody who wants to work for DHL, an applicant, that’s done with the support of AI. Customer service, probably across industries, the most common use case, that is also visible in our company. More specifically, on customs, it’s very helpful not only from an efficiency point of view, but agentic AI also does an excellent job in documenting the sources that were used for classification, so on the regulatory side, but also on the goods description side. That does not only increase efficiency, but also service quality and compliance, very important in this area, especially when we talk about U.S. clearances, an important component of our success there. I think we have been leading in providing continued great service into the U.S. in recent months. That’s something where this also contributed.

On service logistics, dispatch calls, for instance, following up on the dispatch of trucks is one of those areas where AI also comes in handy. When we look at growth accelerators on the following page eight, we continue to invest organically, roughly at the same level as we had in previous years. This goes into infrastructure that improves our quality, like in Barcelona and Helsinki for Express, but also investments that unlock new revenue streams, particularly in geographies like Middle East and Africa, where we are really getting into new verticals as well for supply chain especially. The ongoing expansion we have in our last mile activity continues. We do targeted M&A, and we also had such in the third quarter as it relates to the merger of our e-commerce operations in the U.K. with Evri. That is a consolidating move.

We believe we need to be amongst the top three players in every e-commerce last mile market that we’re in. If we’re not able to reach this organically, we’ll do so inorganically. We have announced a similar move for Iberia earlier in the year. We have now closed the transaction in the U.K., getting into such a market-leading position with that participation in the merged entity. We did a smaller acquisition in the U.S. that gives us access to specific capability on healthcare-orientated last mile, hospital logistics. With our investment in AJEX, we get access to last mile activities in the Gulf Cooperation Council countries. Again, an expansion of our footprint, which is part of the strategy that we have communicated. Similarly, we support the strategy with the strengthened management focus. We have a dedicated team.

For Supply Chain Middle East and Africa, that has been executed in the third quarter. We just announced that we’ll also have a similar move with DHL Global Forwarding as it relates to Latin America. We want to have senior leadership in the region to drive the growth of those businesses. That is part of our strategy execution as well. That already brings me to my summary on page nine. We cover the short-term volatility that the business is exposed to. We are successful in protecting earnings and cash flow generation in that environment by doing the cyclical capacity flex, which I believe was highly effective also in this quarter, but also work on the structural measures that make us more competitive in the mid to long term through the Fit for Growth initiatives, including increased deployment of technology such as AI-based tools.

But also the long term, we saw progress in the quarter with those organic investments, the targeted M&A. We see ourselves making good progress on those structural elements of our growth journey towards Strategy 2030. That is important to accelerate our growth trajectory in 2026 and 2027. We are aware that additional momentum is needed. With that, I would hand it over to Melanie to give you some more details on the financial performance of the divisions in the third quarter. Yeah, thank you very much, Tobias, and good morning and welcome also from my side. Thank you for joining our Q3 earnings call. I will start on page 10 with the main takeaways by division. For DHL Express, Tobias already explained the effectiveness of our cost and yield measures.

Reported Express EBIT contains a net negative EUR 54 million from non-recurring effects, mainly related to a legal provision as well as some smaller cost of change and M&A effects. It is worth pointing out that excluding these non-recurring items, Express EBIT was actually up 9% year over year. In forwarding freight, we have seen similar market dynamics as our peers. In comparison, we have been performing relatively well in the quarter with underlying ocean freight volume growth of 5% and increases in GP and GP per ton in air freight, both year over year and quarter over quarter, all leading to forwarding EBIT being up versus Q2. That being said, we are clearly not where we want to be with DGFF, and Oscar De Bok is implementing structural improvements. Supply Chain continues to perform very well.

Yes, we see somewhat slower growth in current circumstances with both currency headwinds as well as impacts from the general environment. The structural growth tailwinds are intact for that division, as reflected in very good new business signings with EUR 1.4 billion new contract value in Q3. One of the key drivers of these customer wins, as well as a strong 6% plus margin, is our leading digitalization, automation, and standardization setup. In DHL E-Commerce, EBIT includes a mix of non-reoccurring effects, which I will address on the next page. Fundamentally, Q3 confirmed the intact structural e-commerce growth opportunity, which is not yet translating into accelerated profits as we keep investing into our network in this division. Last but not least, P&P is delivering very well on its strategic plan. Tobias has shown earlier the structural network changes, which we are successfully implementing under Fit for Growth.

The Q3 numbers show that our measures are working with a year-over-year EBIT increase, both on a reported and as an underlying basis, which brings me to our Q3 EBIT bridge on page 11. In Q3 2024, we had a EUR 70 million positive one-off effect in P&P. If you adjust for this, as well as this year’s non-recurring effects, our reported 7.6% year-over-year EBIT increase was actually a 10% growth excluding non-recurring items. On the main effects in this quarter, we are showing them very transparently on this page. There are in total EUR 37 million cost of change across Express, Global Forwarding Freight, and DHL E-Commerce. I already talked about the net minus EUR 54 million in Express being primarily driven by a legal provision. Now, to the big number in DHL E-Commerce.

We handed over control for our U.K. e-commerce business to Evri at the end of the quarter, which led to a positive deconsolidation gain. This positive effect is partially balanced by cost of change, as well as a total of EUR 42 million in non-cash write-downs for a full net positive effect of EUR 123 million in the quarter. We are explaining the accounting effects of the U.K. transaction on the dedicated e-com page in the backup, so I won’t go through the accounting details now, but be aware that going forward, we will no longer fully consolidate our U.K. e-commerce business, but recognize the pro-rata net income of our 30% stake in the combined entity in EBIT in line with the net equity accounting rules. That was a bit on accounting. Now, sticking to the P&L, turning to page 12, some more comments on the overall P&L.

I think it’s worth pointing out here that the 2.3% revenue decline is about equivalent to the -2.4% FX effect in the quarter. While lower freight rates and U.S. tariffs were a headwind to growth, that also implies this revenue development overall also implies that on other trade lanes in regions and verticals, we see all continued growth, as Tobias already pointed out before. On the cost side, you see the benefits of our capacity flex and structural cost measures taking effect in terms of significantly lower cost for external capacity, as well as in the reduction in staff costs. At the bottom of the P&L page, you see that our continuous and consistent share buyback activity is driving a significant step up in earnings per share growth in Q3 to 16% year over year.

Coming now to the key points in our cash flow statement on page 13. EBIT growth is translating into higher growth of operating cash flow before changes in working capital. There are numerous movements across different lines in the cash flow statement, but ultimately, this growth in OCF before changes in working capital shows that while there are some moving parts in our EBIT bridge, the earnings quality of our EBIT growth is very healthy, and that is very important. Working capital changes contributed positively to cash flow in the quarter, with the main contribution coming from DGFF. This is, for me, another useful reminder that while we have work to do on DGFF, the business model of an asset-light forwarder is attractive through the cycle, with working capital being one of the factors protecting the cash flow generation of the model.

Strong growth in operating cash flow coupled with ongoing investment control led to a very good free cash flow in Q3. I’m pleased that in 2025, we have shown a smoother cash generation across the quarters and are well on track to our unchanged EUR 3 billion full-year target for free cash flow, excluding M&A. That takes us to the use of cash and the next page. We have been consistently delivering on our dividend continuity promise and to our clear commitment on our EUR 6 billion share buyback program. With EUR 4.4 billion done by end of September, this leaves up to EUR 1.6 billion to go by end of 2026. No change here in our commitment to attractive shareholder returns. To round it up, let’s turn to our unchanged guidance on page 15.

When we talked about our Q2 numbers in early August, the short notice cancellation of rest of world de minimis to the U.S. had just been announced, and we prudently flagged a worst-case risk from this new development. By now, the abolishment of rest of world de minimis has been implemented, and we have better visibility on the impact. This impact is now fully reflected in the assumptions for our otherwise unchanged guidance, as we reconfirm explicitly in the first bullet below the full year 2025 targets. This brings me right away to my wrap-up and the three main messages we want you to take away from today. The first is that in the short term, our cost and yield measures have driven a strong Q3 performance, and on this basis, we fully confirmed guidance today.

Secondly, beyond short-term volatility and capacity flex, our structural cost savings drive a sustainably lower cost base, not only for the current environment, but also for the growth path thereafter. They literally make us fit for growth. Thirdly, beyond P&L earnings, we also delivered a strong cash flow, which allows us to invest in a very targeted manner into the GDP plus verticals and regions we identified, while at the same time offering attractive returns for shareholders. Before we now turn to your questions, something special, a quick double advertisement in the name of our investor relations team. First, for your questions, we now have a new AI tool on our IR website, which matches your questions with the information we have provided in our official publications. Martin told me that this is pretty unique in the IR arena.

I would ask all of you to check it out and give me feedback. I hope that this will be a good example on how we strive to apply AI wherever helpful across the organization. Secondly, we have John Pearson and Mike Parra, our divisional CEO and our CEO Europe of DHL Express, hosting an investor visit at our U.K. hub upcoming Monday. Contact IR here for more details if interested. I think it’s definitely worth seeing. With that, operator, please launch the Q&A. Ladies and gentlemen, we will now begin our Q&A session. If you have a question, we ask that you please use the raise hand function at the bottom of your screen. If you have dialed in, please select star nine to raise your hand and star six to unmute. Once your name has been announced, please unmute and ask your question.

If you want to withdraw your question, please lower your hand using the raise hand function again. Thank you, and a moment for the first question, please. Our first question comes from Alexia Dogani at JPMorgan Chase & Co. Please unmute your line and ask your question. Yeah, good morning, Melanie and Tobias. Thank you for taking my questions. Just, I’m going to limit it to two. Just firstly, in freight forwarding, obviously, Oscar has now been in the seat for, I think, the past 90 days. Can you give us a little bit of an indication of what his plan is to improve the earnings kind of progression in that division? Because clearly, things have been approaching the 2019 levels faster than we would have thought a couple of years ago. So that’s my first question. And then secondly.

Can you give us an update on the progress on the legal structure tidying up and when we should expect to see the overheads within the divisional reporting that you signaled at the CMD? That’s it. Thank you. Thank you, Alex, for these two questions. As it relates to Global Forwarding, I mean, Oscar is making progress. You saw the move on Latin America, for instance, which is, again, a closer-to-market move that enables us to execute our strategy in that as well. Overall, I think we know that in Global Forwarding, we have a great dependency on industry trends as well. You see that in the third quarter. That is hard for us to predict. We have seen clearly a normalization trend since COVID, but also within the year.

I think there are some signs of that bottoming out, but there is a lot of uncertainty due to the changes in trade policy that we have talked about that obviously has implications on demand, quite notably so. On the other hand, we have compensating factors. I think we’re all positively surprised by the trade figures that China published for September. That being one example of a counterbalancing effect. Overall, we see ourselves in the quarter with a positive development, especially in ocean freight, I think relative to our competitors. We have been doing quite well. Air freight, there’s still more work to be done. We also have that topic in terms of the freight market in Europe, especially our LTL network in Germany. These are topics that Oscar is working on. Again, within the quarter, relative to our peers, we are quite pleased.

Yeah, good morning, Alexia. I’ll take your second question on legal structure and the allocation of the corporate center costs. We are well on track on the legal cleanup. As you may recall, target is to take the topic to the AGM next spring, and we are on track to do that. We will then, once we have implemented the new legal structure in the course of 2026, start with the new reporting with the full allocation of the corporate center costs in 2027. We will do some parallel shadow calculations for 2026 so that when we start reporting in the new structure in 2027, we can also restate the 2026 numbers to that format. That’s the timeline here. Thank you, Melanie. Can I just ask a follow-up on Tobias’s answer? Obviously, you talked about the external factors. Productivity usually is an element that kind of.

Helps improve the earnings kind of projections. We’ve seen other peers announce kind of relatively sizable savings programs. The Fit for Growth doesn’t really apply to freight forwarding. Is there something that you are specifically looking at there, perhaps using natural attrition as a tailwind just to kind of understand how costs should evolve there as well? Thank you. I think when you look, for example, at the numbers we show in our stat book, you can see that in terms of employees, we are 3.9% down in Global Forwarding Freight. So Fit for Growth and cost measures are also happening in that division. Yeah, so that, I think, I would absolutely echo. We see ourselves good underway. You also have to see that productivity in the cycle has a cyclical element to it as well.

In the downturn, we often see the files getting lighter and having less to use per file on the ocean freight side. Overall, also, if we look forward, Alexia, I mean, this is an area where we want to grow and rebuild also market share. Our obsession with cost is limited by that ambition to grow. We will look at productivity, continuing to do so, but 2026 needs to be a year for growth for global forwarding. The environment is ripe for that. Some of the moves in the broader industry landscape might be helpful for us in that regard. That is a strong focus that we have. We want to absolutely stay customer-focused in global forwarding and grow in those industry verticals that we have laid out. That is a clear focus for Oscar as well. Thank you. Thank you, Alexia.

And then we come to the next caller, which is from Wolfe Research. Yes, our next caller is Jacob Lax with Wolfe Research. Please unmute your line and ask your question. Jacob, cannot hear you yet. Hey, thanks for your time. Can you hear me now? Yes. Good morning. Great. Cost control was strong again with the ongoing volume pressure in Express. Can you help us think about how much of the cost outs are variable and how much are structural? Is the EUR 1 billion Fit for Growth plan, is that on track, or are you ahead of schedule here just given the global trade volatility? Yeah, thank you for that question. We are purposefully not breaking out how much of the cost is coming from the volume capacity flex and how much is structural because that is a little bit of an artificial calculation.

For example, we have done some rejigging to our aviation network by changing the partners we fly with. That has structurally improved our cost base under Fit for Growth. Of course, that is now also impacted by how much volume we actually have in the network. We do not see the benefit of kind of like pseudo-mathematically breaking it into the one bucket or the other. I think the important element is what you see in the bottom line, and that is this very good cost development. With that, we are overall a bit ahead of what we had envisioned under Fit for Growth for the third quarter situation. Great. Just one more for me.

When you look at the US volume declines, do you have a sense for how much of these declines are driven by de minimis and how much are higher tariffs? To the extent we see tariffs taken off by the courts next year, could this drive a B2C volume recovery? I think we would not expect that. Even if IEEPA tariffs go, we all know that there are other legal grounds that the president could use to impose tariffs. We think that the step down that has happened is permanent. That would change. That would obviously provide opportunity. We would love that. Would allow us also to definitely bring some business back, but we currently do not plan for that. The exact split between de minimis effect and tariffs is hard to do because it is also overlapping. E-commerce has clearly taken a much more severe drop.

Than B2B volumes. That’s something that we very clearly see, and I think everybody would expect as well. Those B2B volumes are goods that are essential in many ways to the US economy, to US-based customers. That decline is significantly lower than the decline you see on the B2C on the e-commerce side. You also see in our overall numbers, so for B2C, we had -23% on the shipment side, and for B2B, -2%. Holding quite stable. Great. Thanks for your time. Thank you. Thanks, Jacob. On to the next caller from BNP Pari. Our next question comes from James Hollands with BNP Paribas. Please unmute your line and ask your question. James? James, that is star six to unmute. Hello. Yeah, James Hollands from BNP Paribas. Two from me. Melanie, please, could you try and quantify the de minimis impact?

Obviously, you talked about up to EUR 200 million this year. Maybe you could give us any detail you think it’s going to be. And better still, what you think it might be in the year 2026. I know you’ve told us not to analyze it. Then, what I would describe as a stream of questions on Express. I’ll keep it to pretend it’s one. If we look at Express TDI volumes, obviously down 10-11% Q2 and Q3. B2C volumes down 23%. I was just wondering where that was versus the market, what you’re seeing happening on market share, and perhaps whether you could give us an early estimate where you think volumes might go in 2026. Then, let’s pretend the second part, TDI B2B volumes. I think previously, obviously, volume is pretty solid there. You talked about average weight per shipment.

I was wondering if you could give us a bit of an update on that, if possible. Thank you. Yeah, thank you. So I’m starting with the de minimis question. I mean, again, when we talked about the $200 million on August 5, that was days after the announcement that de minimis would go out end of August, rest of world. What we had done to come up with $200 million was basically extrapolate the development we had seen for China, Hong Kong, to the U.S. I had already flagged then that this was really a worst-case scenario. We have now seen that there is an impact, but that we are able to manage that quite well as with the Q3 numbers for Express.

With regard to the TDI volumes, I mean, first of all, we had already taken a yield and profitability-focused approach to B2C volumes long before the whole de minimis thing started. We had talked about that now for, yeah, six quarters, that we had really taken pricing action and that this had impacted our volumes, particularly on the Trans-Pacific. In that respect, we had seen stronger volume declines than competition. When you look at our profitability development, I think that shows very clearly that the development is our approach is the right one. To the weight question, yeah, I think that’s a very important point. When you look at volume and weight development, we see a less pronounced development on the weight side. The focus also on heavier shipments for the Express network is actually paying off.

I think if I may add to the market share. We are following that. You might have seen that some of our competitors have also published or said something to the in-quarter development. That is something, if you look at the entire quarter, it gives an impression that we might have lost. If you then look at how that development was within the quarter, we’re not so sure about that anymore. It is something that we watch. We obviously here are focused on TDI. We do not play in the intercontinental deferred market where there is clearly some growth that competitors have shown. Melanie commented on the profitability. The focus for 2026 is more on the weight side. Given the focus on growing in industrials and the focus verticals that we have laid out.

That’s our focus there, clearly B2B, and tilted towards somewhat heavier weight of high-value, critical goods. That’s very much the focus of Express as we go into 2026. Awesome. Thanks a lot. Next question comes from Marco Limite with Barclays. Please unmute your line and ask your question. Marco, that is star six to unmute. Marco, we can’t hear you yet. Hello? Hi. Yeah, now we can. Yes. Okay. Good morning. Congrats for the Q3 results. A question indeed on cost savings because I think Q3 was mostly driven by cost savings. When we think about the 2026 outlook, I mean, I’m aware that probably it’s a bit too early to discuss about 2026. But, I mean, specifically in the Express division, if we think about an environment where macro does not improve, you’ve got pricing that offsets inflation.

Let’s say the year-over-year improvement will be driven by cost savings. In your Fit for Growth program, I think you have said you have only EUR 250 million cost savings in 2025 and a lot more next year. Is my statement of Express growth next year of EUR 300-400 million year-over-year right if we assume macro stable and all coming from cost savings, or do you think that is a bit too bullish and I am missing something else? Maybe this is the first question. My second question is on your full year 2025 outlook. You have reported three quarters year to date up year-over-year, and your current guidance at the low end implies Q4 down year-over-year. Is that just the low end is a bit more cautious, or how do you explain that?

I mean, did you just expect the e-commerce season being particularly bad or any color on that would be? Maybe I take the first question, and then Melanie can comment on the 2025 outlook. Look, I think in the current environment, to say what a stable macro means, we find this relatively difficult. If you look on the macro assumptions that we based Strategy 2030 on and we rely on external sources, that has been very disappointing. Not only as it relates to trade and what has happened with tariffs in the U.S., but also the continued weakness in Europe, especially Germany, Germany having the third year without growth. We will provide guidance in due course. We are in that process. We will obviously continue the focus on cost savings, the cyclical part, but more important also the structural part. We see ourselves good underway.

I think we need to wait a bit more to see with what run rate we really now exit 2025. We have picked up momentum in some areas as it relates to contract closings, for instance, in supply chain, which is also needed to get back on a solid growth term. We need to see now what happens on the US side with IEEPA and how that turns out. These are all factors that will play out in 2026. Okay. Sorry, just a follow-up on that. Asking the same question in a different way. Can you confirm that you still have got additional EUR 750 million cost savings next year and only EUR 250 million cost savings in 2025 from the EUR 1 billion Fit for Growth program? Thank you. As I said, we are actually ahead on the Fit for Growth measures.

In that respect, we will already see more benefits in the current year. As Tobias said, we will give guidance for 2026 in March. There will be a positive contribution year-over-year from Fit for Growth going into the next year. We also have some negatives. For example, in P&P, it will be the second year of the price regulation. We have the macro question mark. We will put all that together for our guidance in March. With regard to Q4, yes, I follow the mathematics and the year-over-year comparison. I think one important element also linked to the first part of your question, we do plan further cost of change bookings for the fourth quarter. In total, we will probably have cost of change up to EUR 200 million.

Half has already happened, but that means that we will also do some more cost of change in Q4. As we guide on reported EBIT, that is, of course, all included in our EBIT guidance. Okay, Marco? Okay. Yeah. Thank you very much. Thank you. Next question comes from Cedar Ekblom with Morgan Stanley. Please unmute your line and ask your question. Star six. Can’t hear you, Cedar, yet. Hello? Cedar? Yep, now we can. Morning. Okay. Perfect. Good. Thank you. I’ve got two questions. Firstly, on the AI rollout that you guys talk about, have you thought what you could quantify those cost savings at, considering we’ve got headcount down a couple of % versus the end of 2024? I don’t know if you could put some numbers around sort of lowering cost to serve.

Maybe it’s too early in the process, but that would be interesting to understand. The second question is just related to sort of the macro outlook that you talked about, Tobias, at the beginning on your Global Connectedness Tracker. That obviously points to a world where global trade as a multiplier of GDP should continue to be pretty solid. I’m not so sure that that is consistent with the message you gave at the Capital Markets Day where we had that sort of long-term trend that saw that decelerating. The broader question here is, you are not growing your volumes in the businesses that are sort of most geared into global trade, sort of freight forwarding and express. I wonder, is it a case where the global market might continue to grow overall, but the verticals that are actually profitable for your business become.

Far more niche? I suppose the overall market can grow, but can your business grow overall, or is it a case that there’s only certain segments that remain profitable? It’s a bit of a macro question. Thank you. Yeah, thank you, Cedar, for both of those questions. I think for AI, we would not quantify this. I think this is also very difficult to do. This technology is ultimately becoming a part of many, many applications that we use. We have dedicated programs as for customs where we also drive that with own capacity, and that’s easier to measure. Even that will quickly infiltrate into normal productivity increasements and the like. Singling out the AI effect, as important as that emerging technology and very helpful technology is, is something that we see as difficult. We continue to report and give updates on how we use it.

At least on a qualitative level, how it connects to our figures. As it relates to the macro outlook, I think we would stay with the view that we’ve shared that there is a deceleration also in the multiplier. The multiplier was significantly above one since at least 1990, and that is not what we expect going forward. The narrative that is out there of the regionalization is a Western perspective, and it’s not a global perspective. China continues to globalize. Now, in terms of us benefiting from that, it’s not falling into our lap. That’s, I think, a fair observation. There are also some industry sectors that we have strong exposure to that are not going to deliver the growth in express. It is a story of an industry that has taken share from the general airframe market over the last 40 years by expanding its capability.

That is what we need to do. To be able to continue to grow, that we have express cold chain capability, for instance, to have access to a sector that we are absolutely convinced will continue to globalize. The U.S. has a very unique point being the world’s largest market and thereby being able to force companies to produce there. The rest of the world does not have that choice. Maybe China is the only second one to that. You will not produce modern pharmaceutical, biogenetic pharmaceuticals in 20 places on this planet. This is just not what our customers tell us. These modern technologies are going to be highly concentrated, which means that for the rest of the world to participate in that technological progress, there will be trade. That is what we see happening with a different focus. That is what we expect going forward.

Again, something that we need to actively address geographically, but also as it relates to our capability portfolio. That is what we are working on and need to deliver on to be able to show stronger growth. I think we have a good track record in supply chain with that gradual expansion of our capability portfolio. It is clearly a strong focus point for Express and Global Forwarding as we go into the year 2026. Fantastic. Thank you so much. Our next question comes from Alex Ervin with Bernstein. Please unmute your line and ask your question. Hi. Good morning. Two from me, please. First of all, on Express into the air peak season, both on volume and on the success of the surcharge, how are you seeing that develop, please?

Second, also on express, you’ve taken out quite a lot of cost year over year, but how much of that do we need to add back as and when volumes rebound? Maybe related to that, where is the weight load factor currently, both year over year and also relative to your view of a normalized baseline? Thank you. I think with regard to the express peak season, maybe not just in express, but also in the other businesses where we see a peak season, we do expect that there will be a B2C peak season. How dynamic that will be remains to be seen. We clearly expect the seasonal increase in the B2C volumes, and we are prepared for that in express, but of course also in Post & Parcel Germany in the e-comm divisions. With regard to the.

Demand surcharge driven by this seasonal additional stress on the system, we are on track with the implementation. We do expect the positive cost offset from that seasonal surcharge also in the fourth quarter of 2025. With regard to how much of the cost improvement is there to stay, as I said before, it is a mix, what we see at the moment, between volume-induced capacity adjustments and structural growth levers. Of course, when volumes come back, we will eventually also flex back with capacity. We also think that those structural Fit for Growth measures will give a lasting benefit, but we cannot quantify that to the very precise number. With regard to weight load factor, while given the current volume and weight situation, we are still not at an optimal point. The cost measures are helping.

Of course, ultimately, that is still a fixed cost network. Where it is more enjoyable when there is more volume and weight. I mean, also with regard to margin, we have seen a good development, but this is not our ultimate margin goal. I think very well managed given the circumstances, but we look forward to the moment when volumes come back. All right. Thank you. Thank you. Our next question comes from Michael Aspinall with Jefferies. Please unmute your line and ask your question. Yeah. G’day, Tobias, Melanie, and Martin. Michael here from Jefferies. A couple on Express. On the Express rest of world kind of impact, it was mostly lower volumes. Maybe you can just talk to us as to why that is. Just thinking about the characteristics of those products. Are they kind of highly desirable B2C products or B2B that still need to move?

Just thinking kind of what’s happening underneath the numbers. I think what we already assumed in August or what was kind of like our hope to keep us away from the worst-case scenario was that, particularly the higher-valued shipments which had entered into the US under the de minimis rule, that they would be more resilient. I mean, you had lots of machinery, spare parts valued below $800 going into the US under the de minimis. Our base case hypothesis was that these volumes would keep moving. Of course, then with clearance, and that is what we have now seen happening. Particularly the very low-value B2C stuff has seen the impact, partially also because customers are then changing to different forms of transporting B2C into the US.

We have seen more resilience on the B2B side, and that explains the difference between the -23% B2C volume decline and the -2.2% B2B. Great. Two other just small ones. In express on TDI volumes, Europe improved sequentially a little bit from -3% to -1% in 3Q. Is there anything underneath that to read into in terms of Europe getting better or not really yet? I think that is a glass half full, glass half empty question. Yes, from -3% to -1% is a move in the right direction. Can we be satisfied with -1%? Clearly not. I think at the moment, we still see a more stagnant European development than we all would have hoped for. Okay. Great. Last one, sorry to slip in three. I think you do not really get into fuel hedging in express.

Maybe you can just remind us on that. Similarly, if there is no hedging, but you expect lower fuel surcharges, would that normally help on the volume front? On the fuel side, there is a well-established mechanism in DHL Express, but also in the industry where you have a fuel surcharge. There is a bit of a time lag, about six weeks. Fundamentally, you then adjust and pass fluctuations in underlying fuel price onto the customer. The volume elasticity is relatively low to that. Okay. Great. Thank you. Our next question comes from Cristian Nedelcu with UBS. Please unmute your line and ask your question. Hi. I hope you can hear me. Thank you very much for giving me the chance to ask the questions. Can I ask the first one in Express? Your competitors are talking about adding air capacity on intra-Asia and Asia-Europe.

I believe, and correct me if I’m wrong, but I believe those are usually trade lanes where your express margins are higher than the divisional average. How do you see the risk of potential market share losses or margin compression there in 2026? The second one, maybe a small one on the Q3 express. For what concerns the U.S., we’ve heard about the postal operators temporarily stopping deliveries to the U.S. in September. There’s been maybe also some de minimis front-loading in August. Did those bring any benefits to the profitability in express in Q3 that may not repeat going forward? The last one on express, very useful, the chart you offer with the weights into different regions. Looking at Q2 and Q3 and just focusing on Europe, weights down 3%, weights down 1%.

If I compare it with the CTS ocean volumes into Europe, those have been growing around 10% year over year. Air freight capacity into Europe overall is also up. High single digit, low double digit. I guess my question is a bit, what do you think is driving the underperformance of express versus ocean and air cargo? Only when we focus on Europe, do you think it could be market share loss? Do you think it could be downtrading or other factors that could explain that? Thank you. Okay. Maybe starting with the third one. The missing element in the comparison is the inter-European business, where obviously our ocean freight statistics do not show what is happening intra-Europe, but that is a big part of our express business, and that has clearly not been the most dynamic. That explains the difference there.

Staying with the trade lane questions. Yeah, I mean, the fact that intra-Asia and Asia to Europe is developing more favorably, which is why others are apparently thinking about moving capacity there, is ultimately a good thing because those trade lanes are strong trade lanes for us in terms of market position and in terms of profitability. I see it more positive if intra-Asia and Asia to Europe is developing favorably. Yeah, I think overall, we have not seen any crazy capacity movements leading to difficult pricing situations beyond the normal competitive dynamics. I would echo that. This is good. We see ourselves in a very competitive situation, both intra-Asia. We sometimes say that Asia is DHL’s second home and also Asia to Europe. The trends that you are seeing, that competitors are more interested in.

Is something that we recognize and overall see as a positive message of. This being a trade lane where we can also expect some growth in 2026. To your second question on the postal operators and the de minimis front-loading, I think there might be small effects of that, but really not much. The de minimis front-loading. Others might have seen to a great extent that we have the postal operators. There might have been some shift for some time, but I think most of that volume just did not show up. We, as you are aware, have already now for several weeks reestablished the postal channel to the United States Postal Service, which is particularly strong on the C2C side. Not much effect on express in the third quarter as it relates to that. Our next question comes from Muniba Kiani with Bank of America.

Please unmute your line and ask your question. Muneeba, we cannot. Star six. Muneeba. Can you hear me now? Yes, we can. Morning. Perfect. Good morning. I just wanted to understand your guidance that you have maintained and unpack some of the moving parts there because it is, of course, on the reported number and with all the one-offs. So you got the EUR 178 million benefit on the accounting on e-commerce. That is certainly new for us. Was that something that you were expecting kind of already when you were giving your guidance maybe earlier in August? Similarly, on the cost of change, this was something you had kind of highlighted and kind of we had taken into account into our numbers. Has that kind of impact of cost of change been different because of the phasing than what you had initially expected? Lastly, on the de minimis, kind of.

What have you accounted for into the year-end on that impact compared to that worst case of $200 million? If you could unpack those moving parts, that’d be super helpful. I think in the de minimis, for us, this is now part of the run rate. The effect is there. We don’t expect much further to move than what we now have. As Melanie laid out, the impact was smaller than the worst case, significantly smaller than the worst case. It’s now part of everyday life. As it relates to the guidance overall, this will net out for the year. We roughly stay to where we originally seen that. Obviously, there’s now the impact quarter by quarter. Melanie can further elaborate on that. Yeah. I think if you put all the one-offs together, what we disclosed in Q2, what we disclosed in Q3.

We currently have a net positive effect of a bit over EUR 40 million. We expect that to turn to a negative number because, as I said, we will have more cost of change now in the fourth quarter. We do not anticipate a positive one-off in the fourth quarter. If you say we have close to EUR 100 million in cost of change year to date, if you want to take that up to EUR 200 million, that gives you a feeling for the order of magnitude in the fourth quarter. We should end the year with a negative contribution for one-offs for the full year. Thank you. Just kind of on your 3Q express volumes and the B2C -23%, can you give us a sense of how that was in the month and what happened in September post the de minimis?

The swing that others might have seen was not as big for us. I think you see over the quarters a pretty consistent trend. We would not see much deviation from that trend. Thank you. Our final question comes from Mark Zeck with Kepler Chevreux. Please unmute your line and ask your question. Hey, good morning. Can you hear me? Yes. Good morning. I heard this. Great. Thank you very much. One question left for me, maybe a bit on the P&P performance. I guess that was pretty good. Certainly much higher than expected by the market. It is like EUR 200 million-plus EBIT in every quarter that is not Q4, kind of the run rate that you would expect now for the next year as well. I guess we have seen the wage increases already for this quarter. It seems like a pretty decent run rate.

With Q4 coming in, would it be fair that maybe you will end up in EBIT maybe more at EUR 1.1 billion rather than EUR 1.0 billion in P&P? I think the recovery that we see this year is also because the last year was relatively weak. I think that’s important to keep in mind. Overall, we see ourselves very well underway to deliver the guidance for next year. Melanie already highlighted this will be a year without regulatory price increases in mail. That provides some pricing headwind. For 2026, we obviously have some freedom in parcel that we’ll also adequately utilize. Similar to other elements that we talked about, we do not see a change of trends for P&P. We have some seasonality in that business as it relates to volume and also earnings. We expect that to be a normal peak season.

That’s where everything’s currently pointing at. We also have higher cost to deal with that. A normal seasonal development is what we expect to close out Q4. Then again, obviously, some of the structural cost measures will carry forward. The headwind on input factor cost and pricing will be a factor in 2026. Thank you. This concludes the Q&A session. I now hand it back to management for closing remarks. All right. We’re not too far away from the 60 minutes that we were looking for. Good news for the guys in Copenhagen who are next. Tobias, your closing remarks, please. It was an interesting quarter, and it, from our perspective, turned out quite well. We do not expect that volatility will go down. We will stay close to our customers. First and foremost, impacted, it’s easier to shift airplanes around than factories.

We do see our narrative confirmed in terms of globalization not being derailed. There is clearly a deceleration relative to decades earlier, but especially in those areas that we focus on, technology and the concentration of manufacturing due to economies of scale and economies of skill, that continues to drive globalization and the growth of trade. We are very focused on, A, staying close to our customers, adjusting capacity, and remain fit in the institutional capability to do so. Secondly, to have enough time and management capacity to do what we clearly need to do to accelerate growth, to execute on Strategy 2030, where we have more headwinds than we had originally anticipated from a macro environment. We talked intensively about that in this call as well. There is clearly work to be done.

We remain optimistic about that and to a great extent, although excited about the opportunity that the world still offers to our company. With that, I thank you for your interest and the great questions that you posed. Have a great day. This concludes today’s call. Thank you for joining. You may now disconnect.

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