DHL Group’s stock experienced an impressive 11% increase on Thursday morning following the company's announcement of earnings for 2024 that met expectations. The logistics giant not only unveiled its financial results but also expanded its share buyback program while reinforcing its commitment to achieving earnings growth in 2025 through a comprehensive cost-cutting strategy exceeding 1 billion euros. To counterbalance ongoing macroeconomic and geopolitical pressures, DHL implemented a peak season demand surcharge for the first time, a move that significantly enhanced its fourth-quarter performance.
This resulted in a year-over-year revenue increase, marking a rise from 81.76 billion euros to 84.19 billion euros for the 12-month period ending December 31, 2024. Despite the downturn in consolidated net profit, attributable to shareholders, which fell to 3.33 billion euros from 3.68 billion in 2023, the topline growth helped manage expectations.
Analysts, surveyed by FactSet, had anticipated sales of 84.11 billion euros and a net income of 3.35 billion euros. In light of the prevailing subdued macroeconomic climate, the German logistics conglomerate has proposed retaining a stable dividend at 1.85 euros per share. In a bid to enhance shareholder value, DHL has significantly boosted its share buyback initiative, increasing the total amount approved since its inception in 2022 by an additional 2 billion euros, bringing the total up to 6 billion euros, which will continue through to 2026. Looking ahead to 2025, DHL forecasts an uptick in operating profit, projecting an increase to over 6 billion euros compared to 5.89 billion euros in 2024.
Notably, this forecast does not factor in potential consequences stemming from changes in tariff and trade policies, which could yield both positive and negative impacts on DHL Group. CFO Melanie Kreis emphasized, "We expect to revert to earnings growth in 2025, actively driving this process through our 'Fit for Growth' initiative and strategic investments in burgeoning market opportunities." Part of the 'Fit for Growth' restructuring effort involves laying off 8,000 employees primarily within the Post & Parcel Germany sector, which has faced challenges due to wage arrangements, increasing operational costs, and a dip in traditional mail volumes.
The comprehensive impact of this group-wide initiative is expected to be fully realized by 2027. CEO Tobias Meyer conveyed that, "We anticipate the global political and economic landscape to persist in its volatility during 2025. However, we remain determined to foster growth amidst this context, concentrating on manageable aspects of our operations.
Our focus lies in bolstering efficiency and accelerating our sustainable growth objectives through our Group cost program, 'Fit for Growth.'" Meyer further mentioned that the results and initiatives of today are instrumental in restoring investor confidence. Analysts from AlphaValue/Baader noted, "We believe that the guidance for FY 2025 is now based on attainable criteria, relieving management from excessive pressure related to economic fluctuations." In a related discussion coinciding with the publication of annual earnings, CEO Meyer stated that detailed divisional strategies, which represent 80% of the growth outlined in Strategy 2030, will be elaborated upon during the capital markets day scheduled for April 2025..