Opportunity and risk categories

Overview of material opportunities and risks

We identify opportunities and risks using the categories described in the following overview. In the overview, we have allocated our material opportunities and risks to these categories with the corresponding significance and measurement and explained them in the following pages:

Both the material as well as the immaterial opportunities and risks from the overview are specified in the following. Unless otherwise explicitly labeled, these are considered immaterial.

Opportunities and risks arising from corporate strategy

Over the past few years, the Group has ensured that its business activities are well positioned in the world’s fastest-growing regions and markets. We are also constantly working to create efficient structures in all areas to enable us to flexibly adapt capacities and costs to demand, which is a condition for lasting, profitable business success. With respect to our strategic orientation, we are focusing on our core competencies in the logistics and letter mail businesses. Our earnings projections regularly take account of development opportunities arising from our strategic orientation.

We take action early to counter potential strategic risks. In doing so, it helps that our portfolio of customers and supplier companies is as broad as possible and that we focus on profitable sectors and products, regularly review customer and product performance, practice strict cost management and add surcharges whenever necessary.

In the Express division, our future success depends, above all, upon general factors such as trends in the competitive environment, costs and quantities transported. In addition, market capacities could restrict our pricing leeway due to market pressure from customers and competitors. Given a more conservative assumed rate of price increases and a lower probability of occurrence, this is currently only a risk of low significance for us. We plan to keep growing our international business and expect a further increase in shipment volumes over the medium and long term. Based upon this assumption, we are investing in our network, our services, our employees and the DHL brand.

In the Global Forwarding, Freight division, we purchase transport services for customers from airlines, shipping companies and freight carriers rather than providing them ourselves. In the best case, we are able to outsource transport services at such a low rate that we can generate a margin. In the worst-case scenario, we bear the risk of not being able to pass on all price increases to our customers. The extent of our opportunities and risks essentially depends on trends in the supply, demand and pricing of transport services as well as the duration of our contracts. Comprehensive knowledge in the area of brokering transport services helps us to capitalize on opportunities and minimize risk.

In the Supply Chain division, our success is closely tied to our customers’ business performance. We offer a diverse range of products for companies in various sectors globally, which allows us to diversify our risk portfolio and counter potential risks. Our future success will depend on our ability to continuously enhance our existing operations, seamlessly integrate new business ventures, and expand in our key markets and segments. We will continue to leverage innovative solutions and technologies to drive efficiency and deliver value to our customers.

The eCommerce division is responsible for domestic and international deferred standard parcel delivery services in various countries around the globe. It predominantly serves customers in the fast-growing e-commerce sector. In the cross-border segment, we are building a platform that connects to the most cost-efficient networks for last-mile delivery. We aim to grow profitably in all sectors and segments. To counteract the fundamental risk of rising cost pressure, we have taken measures with which we intend to improve network efficiency and cost flexibility. Cost flexibility, especially in last-mile delivery, will also help us manage the rising volatility of volumes in the eCommerce division.

In the German mail and parcel business, we are responding to the challenges posed by the structural shift from a physical to a digital business and the continual decline in letter mail occurring parallel to the steady increase in volumes of parcels and merchandise mail items. We are counteracting the risk arising from changing demand by offering a range of services that can be tailored to shifting customer requirements. Due to the rise in e-commerce, we expect our parcel business to continue growing in the coming years. We are therefore expanding our automated network, which includes Packstations and Poststations, for example. We are also expanding our range of electronic communications services, securing our standing as a quality leader and, where possible, making our transport and delivery costs more flexible. We follow developments in the market very closely and take them into account in our earnings projections.

We currently do not see any specific corporate strategy opportunities or risks of material significance, either for the Group or individual divisions.

Legal and compliance-related opportunities and risks

Legal disputes may arise in the case of noncompliance with national or international laws and regulations as well as agreements. Investigations of any such violations may result in considerable costs, penalties and damage to our company’s reputation, which could have a disadvantageous impact on the business activities of the Group.

Compliance with laws, regulations and agreements is a clearly formulated obligation of all employees of the Group, and ensuring this is one of the fundamental tasks of our managers. To support our employees and managers, we have established a corporate compliance unit differentiated according to relevant topics that, on the basis of our risk management system, monitors compliance with Group-wide standards at both Group and divisional level with respect to typical compliance risks. Thus, in addition to our compliance initiative aimed at preventing fraud and fighting corruption and violations of cartel and competition law, we have introduced a data protection management system in all divisions intended to ensure compliance with data protection laws – for example, the provisions of the European Union’s General Data Protection Regulation (GDPR). A similar, Group-wide compliance initiative aims to ensure adherence to international and national export controls and embargo regulations. Moreover, our compliance unit supports, coordinates and monitors the observance of human rights and the fundamental environmental standards in our own operations as well as in our external supply chain.

At present, we do not see any specific legal or compliance-related opportunities or risks of material significance.

Opportunities and risks arising from capital expenditure and projects

The Group invests in maintaining and growing its network, in buildings and technical equipment, in IT solutions and in its fleet of vehicles and freight aircraft. The objective of the investment projects is to strengthen the positioning of our divisions in consideration of aspects related to economic efficiency and ESG.

The risks associated with the investments relate primarily to deviations in costs and timelines as well as to the complexity of the projects and the availability of resources. This can lead to adverse effects on the economic efficiency, continuity and quality of our services.

The aforementioned risks are monitored via ongoing project management and investment controlling so that targeted countermeasures can be taken at an early stage. The status of investment projects is documented on a regular basis and reported to the Group Board of Management and, for larger projects, to the Supervisory Board. Moreover, the Group Board of Management is informed promptly of any critical projects.

We do not currently see any specific opportunities or risks of significance in the area of investment projects.

Operational opportunities and risks

Logistics services are generally provided in bulk and require a complex operational and external infrastructure with high quality standards. Any weaknesses with regard to the tendering, sorting, transport, warehousing, customs clearance or delivery of shipments could seriously compromise our competitive position. In particular, the impairment of significant infrastructure such as central transport hubs can have negative effects. Recent years have revealed how external factors such as geopolitical conflicts can restrict our transport routes and means or reduce the availability of our employees, and hence potentially impair our operating performance. To consistently guarantee reliability and punctual delivery, processes must be organized so as to proceed smoothly with no technical or personnel-related glitches. We counteract potential operational risks, for example through efficient workflows and structures. We also take out insurance policies to guard against potential losses.

A large number of internal processes must be aligned so that we can render our services. This also includes supporting functions such as sales and purchasing. The extent to which we succeed in aligning our internal processes to meet customer needs while simultaneously lowering costs correlates with potential positive deviations from the current projections. Our earnings projections already incorporate the expected cost savings.

The risk of operational restrictions due to climate change has developed into a risk of low significance for us, as the measures to achieve our decarbonization targets, such as increasing the proportion of electric vehicles, are proving to be effective mitigation measures.

At this time, we do not see any specific operational opportunities or risks of material significance.

Opportunities and risks arising from human resources

Qualified, dedicated and motivated employees are a prerequisite for sustainable success. Demographic change and a tense labor market situation across all job types in some regions represent a challenge for recruiting workers on a local level in some cases. To address this adequately and to avoid labor shortages, we place particular emphasis on the quality and scalability of our recruiting activities. In addition, we prevent staff shortages through recruiting measures abroad, by using skilled labor migration and by hiring refugees.

For our business success, it is important to provide our employees with development opportunities and foster their long-term loyalty to the company. In this context, we value the professional development of our executives, with our Group-wide Leadership Dimensions serving as a guide for action. Furthermore, we ensure that our employees are able to continuously improve their skills in line with their needs through on-the-job learning opportunities as well as off-the-job training courses. We have also introduced our Career Marketplace across the Group. This is a technology platform that offers employees personalized training and job opportunities based on their individual profile.

The health and safety of our employees are of central importance for DHL Group. We therefore place a high value on health and occupational safety measures. With respect to health management, we make use of initiatives tailored to local requirements and cooperate across divisions in the management of healthcare initiatives. This is supplemented by targeted measures to improve individual health literacy, such as offering check-ups in the workplace. In addition, we address risks in the area of mental health using preventive activities, including by means of a continuously refined system for assessing risks associated with mental stresses.

As a globally active company with approximately 600,000 employees (headcount as of December 31, 2024) in over 220 countries and territories, upholding human rights is a top priority for us. We account for this responsibility through our Human Rights Policy Statement. If infringements are reported, we will take appropriate measures for clarification.

The development of staff costs is a key factor for us due to the large number of employees. In Germany, this particularly includes the impact of collective bargaining negotiations. The development of staff costs is also covered as a component of inflation risk in the Market- and customer-specific opportunities and risks section.

Overall, we do not currently see any personnel-related opportunities or risks of material significance.

Opportunities and risks arising from information technology

The security of our information systems is particularly important to us. The goal is to ensure continuous IT system operation and prevent unauthorized access to our systems and databases. To this end, we have defined guidelines, standards and procedures based upon ISO 27001, the international standard for information security management. In addition, IT risks are monitored and assessed on an ongoing basis by Group Risk Management, Corporate Internal Audit, Data Protection and Corporate Security.

For our business processes to run smoothly at all times, the essential IT systems must be continuously available. We have therefore designed our systems to protect against complete system failure. Our software is monitored and updated regularly to address potential bugs, close gaps in security and increase functionality. We employ a patch management process – a defined procedure for managing software upgrades – to control risks that could arise from outdated software or from software upgrades. In this context, we use structured processes to collect and check the devices and software versions used in our IT network, the goal being to achieve the highest possible level of coverage.

We limit access to our systems and data such that employees can generally only access the data they need to perform their duties. Systems and data are backed up on a regular basis, and critical data are replicated across data centers. We make use of outsourced data centers of established providers and operate central data centers in the Czech Republic, Malaysia and the United States. Our systems are thus geographically separate and, in addition, are replicated at local disaster recovery locations.

To assess risks in the area of information security, we take a uniform Group-wide approach that factors in risks from the lack of availability, manipulation, misuse, spying and infection of data and information, as well as physical damage to IT facilities. In total, these represent a latent risk of medium significance (1).

Artificial intelligence (AI) opens up a wide range of possibilities, but it also comes with increasing risks for the Group due to the dangers of cybercrime. In addition, complying with regulations in dealing with generative AI is a compliance topic in general.

We also take continuous action to minimize risk, such as holding regular training courses for our employees and monitoring all of our networks and IT systems globally via our Cyber Defense Center, along with regular information security incident simulations.

We currently do not see any other specific IT-related opportunities or risks of material significance.

Financial opportunities and risks

As a global operator, we are exposed to financial opportunities and risks arising from fluctuating foreign exchange rates, interest rates and commodities prices, as well as the Group’s capital requirements. Changes in pension obligations also impact our business. Due to the high volatility of recent years, the influence of interest rates on our pension obligations represents both a risk as well as an opportunity of medium significance for us (2). We attempt to reduce the volatility of our financial performance due to financial risk by implementing both operational and financial management measures. Within the Group, derivative financial instruments are used exclusively for hedging purposes and thus reduce existing risks. Detailed information on risks in relation to the Group’s defined benefit retirement plans can be found in note 37 to the consolidated financial statements.

With respect to currencies, opportunities and risks result from scheduled foreign-currency transactions as well as those budgeted for the future. Any significant currency risks arising from budgeted transactions are quantified as a net position over a rolling 18-month period. Highly correlated currencies are consolidated in blocks. At the Group level, the most important net surpluses are budgeted for the US dollar block as well as for the pound sterling, the Japanese yen and the Australian dollar. The Czech koruna is the only currency with a considerable net deficit. The main currency risks for 2025 were approximately 30% hedged at the reporting date.

Any general depreciation of the euro presents an opportunity as regards the Group’s earnings position. The main risk to the Group’s earnings position would be a general appreciation of the euro.

While the overall impact of all currency effects for the Group represented an opportunity and risk of medium significance in the previous year, we now see only an opportunity and risk of low significance, partly due to hedging.

As a logistics group, our biggest commodity price risks result from changes in fuel prices (kerosene, diesel and marine fuels). In the DHL divisions, most of these risks are passed on to customers via operating measures (fuel surcharges).

The key control parameters for liquidity management are the centrally available liquidity reserves. The Group’s liquidity is secured over the short and medium terms. Moreover, the Group enjoys open access to the capital markets on account of its solid investment-grade rating and is well positioned to ensure that long-term capital requirements are fulfilled. We therefore see no significant risk to the Group at present in the area of liquidity.

Further information on the Group’s financial position and finance strategy, as well as on the management of financial risks, can be found in the Report on economic position and in note 44 to the consolidated financial statements.

Risks may also arise from our accounting, controlling, budgetary and financial processes. We monitor those processes continuously to prevent such risks from materializing.

We do not currently see any other significant financial opportunities or risks.

Tax-related opportunities and risks

Due to the international scope of our operations, we are subject to a variety of tax regimes. Opportunities and risks arise from the introduction of new types of taxes, legislative changes and judicial rulings. As such, opportunities and risks could arise from the different interpretation of complex tax regulations, for instance.

We mitigate this risk through continual dialog with taxation authorities and tax advisers to obtain the greatest possible degree of legal certainty. This allows us to meet tax compliance requirements in the countries in which we operate to the best of our knowledge and belief. Our Group risk management system incorporates a tax risk management framework that enables us to monitor and avoid tax risk as far as possible.

Currently, we have not identified any significant tax­related opportunities or risks.

Opportunities and risks related to real estate transactions

DHL Group is one of the world’s largest corporate users of industrial properties. A large portion of the Group’s industrial real estate portfolio consists of leased properties. Ownership solutions have additionally been implemented for a number of especially strategic properties. Our business may be impacted by opportunities and risks arising from the lease, purchase, sale, construction or use of real estate. A global team of real estate professionals manages the Group portfolio and ensures that any opportunities or risks are identified at an early stage and a suitable response is selected.

We negotiate suitable solutions early with our lessors, analyze real estate markets and identify suitable properties for expanding or optimizing the current portfolio based on our divisions’ business strategies and operational location planning. The main objective is to secure the availability of properties needed for our core business.

We do not currently see any specific opportunities or risks of significance in the area of real estate.

Market- and customer-specific opportunities and risks

Macroeconomic and sector-specific conditions are a key factor in determining the success of our business. In addition to the development of the global economy, growth in the logistics market and its interaction with our stakeholders – our customers, suppliers and competitors – is of particular importance in this regard. Changes in demand present both opportunities and risks.

As a provider of choice, our business is based on our customers’ needs. Our customers are likewise exposed to macroeconomic trends that impact growth in their respective sectors. We monitor market developments on an ongoing basis and review the potential financial effects of relationships with business partners and suppliers at regular intervals, to enable us to avert any risk that could arise from potential insolvencies, for example, at an early stage. Our Customer Solutions & Innovation unit uses a risk dashboard for this purpose. Compared with the previous year, we have reduced our volumes with companies potentially at risk of insolvency. Potential customer insolvencies therefore represent only a risk of low significance for us at present.

Global trade and consumers’ general inclination to spend remain persistently weak, partly due to geopolitical instability. There are differing views as to the scale and timing of the possible upturns in the macroeconomic environment. We expect moderate business performance in 2025. In spite of the continued expectation of weaker global economic growth, we will see opportunities for growth, for instance through structural growth in e-commerce. The general trend of businesses outsourcing processes continues as well. In addition, our DHL divisions are benefitting from rising demand for complex and integrated logistics solutions thanks to our position as the global market leader.

Our strong position in all the regions in which we operate allows us to compensate, at least partially, for declines in certain trade lanes, often based on growth in others. Cyclical risks can affect our divisions differently depending on their magnitude and point in time, which could mitigate the total effect. Moreover, we have taken measures in recent years to make costs more flexible and to allow us to respond quickly to changes in market demand. However, an additional weakening of global economic growth represents a risk of medium significance (3).

Deutsche Post and DHL are in competition with already established companies, as well as new entrants to the market. Such competition can significantly impact our customer base as well as the levels of prices and margins in our markets. In the logistics and letter mail business, the key factors for success are quality, confidence and competitive prices. Thanks to the high quality we offer, along with the cost savings we have generated in recent years, we believe that we will be able to remain competitive and keep any negative effects at a low level.

As a logistics concern, we are additionally exposed to the effects of fluctuations in market prices on Group profit. On top of this, inflation is driving changes in staff costs. Despite its recent decline, inflation – including the impact of the current collective bargaining negotiations – still represents a risk of medium significance overall (4).

The availability of energy from renewable sources is of central importance for us to achieve our sustainability goals. In line with Strategy 2030, our ambition is for sustainable aviation fuels (SAF) to account for 30% of the fuel we use for air transport by 2030. The current availability and planned projects do not yet appear to be sufficient to meet the demand for sustainable aviation fuels. The possibility that the market supply of energy from renewable sources and SAF may not be sufficient therefore represents a risk of medium significance (5).

Beyond this, no significant opportunities or risks are seen at present in this risk category.

Opportunities and risks arising from political, regulatory or legal conditions

Our business is fundamentally intertwined with the political and legal environments in which we operate. The stability and security of international transport routes represent the first line in this framework, and they could be critically disrupted by events ranging from geopolitical developments to military conflicts such as the war in Ukraine and the conflict in the Middle East. A number of the indirect effects of these geopolitical crises, such as the development of the global economy and inflation, have been taken into account for the corresponding risks. The remaining direct effects in the countries and regions affected currently represent a risk of low significance.

In addition, the international transport of goods is subject to the import, export and transit regulations of more than 220 countries and territories as well as their applicable foreign trade laws. In recent years, not only the number but also the complexity of such laws and regulations has increased significantly (including their extraterritorial application). Violations are also being pursued more aggressively by the competent authorities, with stricter penalties imposed. We have implemented, on the one hand, ongoing monitoring of the regulatory and legislative developments in the markets most relevant for us and, on the other, a Group-wide compliance program in response to this development. This comprises the legally prescribed checking of all senders, recipients, suppliers and employees against current embargo lists. In addition, this includes in particular the legally required review of shipments for the purpose of enforcing applicable export restrictions as well as country sanctions and embargoes. DHL Group also cooperates with the responsible authorities, both in working to prevent violations as well as in assisting in the investigation of any infringements in order to avoid or limit potential sanctions.

A number of risks arise primarily from the fact that the Group provides some of its services in regulated markets. Many of the postal services rendered by Deutsche Post AG and its subsidiaries (particularly the Post & Parcel Germany division) are subject to sector-specific regulation by the German federal network agency (Bundesnetzagentur). The agency approves or reviews prices, formulates the terms of downstream access, has special supervisory powers to combat market abuse and guarantees the provision of universal postal services. This general regulatory risk could lead to a decline in revenue and earnings in the event of negative decisions.

Revenue and earnings risk can arise, in particular, from the price cap procedure used to determine the rates for a wide range of letter mail and parcel products.

An association from the CEP sector and customers have filed an action with the Cologne Administrative Court against the price cap approval of the German federal network agency for the years 2022 to 2024. Oral proceedings in relation to this took place at the Cologne Administrative Court on February 12, 2025.

One postal service provider filed a civil suit for repayment of allegedly excessive conveyance fees for standard letters delivered in 2017. The action was dismissed by the Cologne District Court in a ruling from June 17, 2021. The Düsseldorf Higher Regional Court dismissed the appeal against this ruling on April 6, 2022, and did not permit any further appeals. On May 2, 2022, the plaintiff submitted an appeal against nonpermission with Germany’s Federal Court of Justice to have its appeal allowed.

It cannot be ruled out that the effects on existing pricing approvals, or on future price cap procedures, of the actions currently pending could be negative for Deutsche Post. According to current assessments, this represents a risk of medium significance (6).

We also describe significant legal proceedings in note 46 to the consolidated financial statements.

The fight against climate change may result in increased regulatory and legal changes in the coming years. An increase in, or stepped-up introduction of external carbon prices, such as carbon taxes and levies, certification regulations and other direct costs in conjunction with greenhouse gas emissions represents a risk of medium significance (7). We have implemented ongoing monitoring of the regulatory and legislative developments in the markets most relevant for us in response to this risk, but above all we constantly work to reduce our greenhouse gas emissions. To this end, we have set ourselves greenhouse gas emissions reduction targets verified by the Science Based Targets initiative. The risk of increased restrictions on greenhouse gas emissions has developed into a risk of low significance for us, as the measures to achieve our decarbonization targets are proving to be effective mitigation measures. The lack of clear rules and criteria on how to account for insetting (GHG protocol) and on decarbonization claims (Green Claims Directive) could potentially result in challenges in the commercialization of greenhouse gas emission reductions to customers, in higher costs and uncertainties around verification, auditing, reporting and implementation, and in compliance and reputational risks. Uncertainty around the recognition of decarbonization measures and environmental claims currently represents a risk of medium significance (8).

We have not identified any other significant opportunities or risks associated with the political, regulatory or statutory environment.

Opportunities and risks arising from the environment, catastrophes and epidemics

Our business operations can be impacted by natural disasters, epidemics and ecological factors, also including physical risks caused by climate change, such as floods or storms, and other crisis events.

Overall, we do not currently see any specific opportunities or risks of material significance in this area.

Change in risk exposure after the reporting date

On February 12, 2025, the Cologne Administrative Court dismissed the action against the price cap approvals for 2022 to 2024. The court did not give leave to appeal.

Arising from US trade policy, increased changes to customs-related and commercial regulations took place after the reporting date with a substantial impact on commercial and practical aspects of international trade. These may lead to significant negative or positive effects on international freight and logistics markets. We currently assess this issue to be a new risk of medium significance in the regulation category.

Since the beginning of 2025, we have increasingly observed that competitors are tendering their letter mail services without VAT, despite the fact that they do not provide a nationwide universal postal service. This appears to have arisen from tax authorities treating these companies as universal service providers, which we believe to be contrary to European law. This development, which has emerged from an incorrect interpretation of the requirements that postal service providers must fulfil in order to qualify as a universal service provider, represents a new risk to Post & Parcel Germany of medium significance in the regulation category. This is because Deutsche Post AG incurs higher costs as a result of the nationwide universal service it provides and its limited entitlement to deduct input taxes.