Income statement disclosures

11 Revenue by business unit

Due to the economic environment, consolidated revenue fell in the 2023 fiscal year. Among other factors, the normalization of freight rates in the Global Forwarding, Freight division contributed to this development. Business in the Express division was shaped by declining volume development. In addition, currency effects and lower fuel surcharges had a reducing effect on revenue. Meanwhile, revenue in the Supply Chain and eCommerce divisions increased due to new business and contract extensions. In the Post & Parcel Germany division, revenue growth in the Parcel Germany business unit compensated for the declining business in the Post Germany area, which is hampered by ongoing structural transition.

The contract liabilities recognized at the beginning of the fiscal year primarily led to revenue in the fiscal year.

The following table shows the factors affecting revenue:

The allocation of revenue to geographical regions is presented in the segment reporting.

12 Other operating income

Other operating income fell short of the prior-year figure. The reduction in income from currency translation was partially compensated for by the increased income from the reversal of provisions and by higher income from the remeasurement of liabilities.

Income from operating leases was attributable mainly to leasing of the aircraft fleet’s cargo space.

In addition to a large number of smaller individual items, miscellaneous other operating income also includes dividend income of €24 million.

13 Changes in inventories and work performed and capitalized

Changes in inventories are attributable largely to real estate development projects. The changes in work performed and capitalized are primarily in conjunction with the discontinuation of production of the StreetScooter vehicles in the 2022 fiscal year.

14 Material expense

Material expense fell in conjunction with the normalization on the freight markets, in particular due to lower transport costs and due to lower aircraft fuel costs.

Aircraft fuel expenses include additional costs for sustainable aircraft fuels in the amount of €113 million (previous year: €53 million) that DHL Group uses as part of its decarbonization measures.

The other expenses item includes furthermore a large number of individual items.

15 Staff costs/employees

Staff costs relate mainly to wages, salaries and compensation, as well as all other benefits paid to employees of the Group for their services in the fiscal year. The increase results primarily from wage and salary raises and from new employees in the fiscal year.

Social security contributions relate, in particular, to statutory social security contributions paid by employers.

Retirement benefit expenses include the service cost related to the defined benefit retirement plans, note 37. These expenses also include contributions to defined contribution retirement plans for civil servants in Germany in the amount of €303 million (previous year: €308 million), as well as for the Group’s hourly workers and salaried employees, totaling €507 million (previous year: €470 million), note 7.

The average number of Group employees in the reporting period, broken down by employee group, was as follows:

The employees of companies acquired or disposed of during the fiscal year were included ratably. The number of full-time equivalents at joint operations included in the consolidated financial statements as of December 31, 2023, amounted to 621 on a proportionate basis (previous year: 523).

16 Depreciation, amortization and impairment losses

Depreciation, amortization and impairment losses increased due to investments, on the one hand and, on the other, due to the business combinations in the fiscal year, as well as the acquisitions that were only included on a pro rata basis in the previous year since the acquisition date, note 22 and 23.

The impairment losses are spread among the various asset classes and segments as follows:

The impairment losses relate primarily to the Express division. There, they are attributable exclusively to the most recent measurement of aircraft prior to reclassification to assets held for sale, note 32. In the previous year, the impairment losses related to the Express and Global Forwarding, Freight divisions, as well as write-downs of assets of Russian companies in the amount of €31 million, 2022 Annual Report, notes 3, 12 and 16 to the consolidated financial statements.

17 Other operating expenses

Other operating expenses declined, in particular, due to lower expenses from currency translation and expenses from write-downs and remeasurement.

Taxes other than income taxes are either recognized in the related expense item or, if no specific allocation is possible, in other operating expenses.

Miscellaneous other operating expenses include a large number of smaller individual items.

18 Net finance costs

Of interest income, €29 million (previous year: €21 million) relates to income from finance lease receivables. Higher interest rates were able to partially compensate for the deterioration in financial income from the change in fair value of the stock appreciation rights (SARs). Further disclosures on interest income and expenses are contained in note 43.

The expense from the unwinding of discounts on bonds resulting from the application of the effective interest method amounted to €12 million (previous year: €12 million).

Gains and losses on changes in fair value of financial assets and liabilities primarily relate to pension plans in the United States.

The foreign-currency result includes net monetary gains of €10 million related to financial reporting in hyperinflationary economies.

Information on interest expenses from unwinding discounted net pension provisions can be found in note 37.

19 Income taxes

The reconciliation to the effective income tax expense based on consolidated net profit before income taxes and the expected income tax expense is as follows:

The difference from deferred tax assets not recognized for initial differences is due to differences between the carrying amounts in the opening tax accounts of Deutsche Post AG and the carrying amounts in the IFRS financial statements as of January 1, 1995 (initial differences). In accordance with IAS 12.15(b) and IAS 12.24(b), the Group did not recognize any deferred tax assets in respect of these temporary differences, which related mainly to property, plant and equipment as well as to pension provisions and similar obligations. As of December 31, 2023, there were no remaining tax-deductible temporary differences between the original IFRS carrying amounts and the tax base (previous year: €99 million).

Effects from deferred tax assets not recognized for tax loss carryforwards and temporary differences in the amount of €38 million (previous year: €3 million) relate to the reduction of the effective income tax expense due to the utilization of tax loss carryforwards and temporary differences, for which deferred tax assets had previously not been recognized. In addition, the recognition of deferred tax assets previously not recognized for tax loss carryforwards and of deductible temporary differences from a prior period reduced the deferred tax expense by €100 million (previous year: €274 million). Effects from unrecognized deferred tax assets do not include any effects (previous year: income of €12 million) due to a reversal or impairment loss recognized for a deferred tax asset. Other effects from unrecognized deferred tax assets relate primarily to tax loss carryforwards for which no deferred taxes were recognized. Tax rate changes also had no material effects.

A deferred tax asset in the amount of €41 million (previous year: €20 million) was recognized in the balance sheet for companies that reported a loss in the previous year or in the current period as, based on tax planning, the realization of the tax asset is probable.

The following table presents the tax effects on the components of other comprehensive income:

20 Earnings per share

Basic earnings per share are computed in accordance with IAS 33, Earnings per Share, by dividing the consolidated net profit by the weighted average number of shares outstanding. Outstanding shares relate to issued capital less any treasury shares held.

Basic earnings per share for the 2023 fiscal year were €3.09 (previous year: €4.41).

To compute diluted earnings per share, the weighted average number of shares outstanding is adjusted for the number of all potentially dilutive shares. This item includes the executives’ rights to shares under the Performance Share Plan and Share Matching Scheme (as of December 31, 2023: 3,891,455 shares; previous year: 6,292,011) and the maximum number of ordinary shares that can be issued on exercise of the conversion rights under the convertible bond issued in December 2017. Consolidated net profit for the period attributable to Deutsche Post AG shareholders was increased by the amounts spent for the convertible bond.

Diluted earnings per share in the reporting period were €3.04 (previous year: €4.33).

21 Dividend per share

A dividend per share of €1.85 is being proposed for the 2023 fiscal year (previous year: €1.85 paid). Further details on the dividend distribution can be found in note 35.