Basis of preparation

1 Basis of accounting

The condensed consolidated interim financial statements as of June 30, 2024, were prepared in compliance with International Financial Reporting Standards (IFRSs) and the related Interpretations of the International Accounting Standards Board (IASB) for interim financial reporting as adopted in the European Union as of the reporting date. These interim financial statements thus include all information and disclosures required by IFRSs to be presented in condensed interim financial statements.

Preparation of the condensed consolidated interim financial statements in accordance with IAS 34 requires the Board of Management to exercise judgement and make estimates and assumptions that affect the application of accounting policies in the Group and the presentation of assets, liabilities, income and expenses. Actual amounts may differ from these estimates.

The accounting policies applied to the condensed consolidated interim financial statements generally derive from the same accounting policies as used in the preparation of the consolidated financial statements for the 2023 fiscal year. Exceptions are the new or revised International Financial Reporting Standards (IFRSs) required to be applied for the first time in the 2024 financial year that, however, have not had a material influence on the consolidated interim financial statements. Detailed explanations of these can be found in the 2023 Annual Report in note 5 to the consolidated financial statements.

The income tax expense for the reporting period was deferred on the basis of the tax rate expected to apply to the full fiscal year. The effective tax rate is unchanged from the previous year at 30%.

Changes to parameters
For DHL Group, the changes to parameters relate primarily to exchange rate changes for the most important currencies for the Group as well as to interest rates for the determination of the present value of pension obligations. The changes are as follows:

Accounting pursuant to IAS 29 is applied for Turkish companies. The consumer price index of the Turkish Statistical Institute was used for the adjustment of the purchasing power effects. As of December 31, 2023, this figure was 1,859 basis points, as of June 30, 2024, it had increased to 2,319 basis points.

The following discount rates were used to determine the present value of the pension obligations:

2 Consolidated group

The number of companies consolidated with Deutsche Post AG is shown in the following table:

The changes are primarily the result of mergers, formations and liquidations of immaterial companies. No companies were acquired in the first half of 2024.

Final purchase price allocation for MNG Kargo
MNG Kargo, acquired on October 5, 2023, with the approval of the Turkish competition authorities, and its subsidiary are leading parcel carriers in Turkey and have a strong presence in the e-commerce segment. The acquisition complements the business portfolio of DHL Group and is contributing to the company being able to benefit from growth potential in the Turkish market and continuing to strengthen its position in Turkey and in European markets. MNG Kargo is allocated to the eCommerce segment.

The purchase price allocation was finalized on July 25, 2024, and resulted in non-tax-deductible goodwill of €234 million, which is allocated to the eCommerce cash generating unit (CGU). It is mainly attributable to the synergies and network effects expected from the e-commerce market in Turkey. Customer relationships will be amortized over three to eight years. The brand name has a useful life of one year. The useful lives of the property, plant and equipment range from four to ten years. Current assets include trade receivables of €24 million. There was a difference of €1 million between the gross amount and the carrying amount.

DHL Logistics LLC – SO
On December 7, 2023, DHL Global Forwarding acquired the remaining 60% of shares in Danzas AEI Emirates. Until that time, the equity method had been applied to this company. Since then, the company has been fully consolidated and now operates under the name DHL Logistics LLC – SO (DHL Logistics). DHL Logistics is a specialist in logistics and transport services in Dubai and the northern Emirates. Thanks to this acquisition, the Global Forwarding, Freight division will continue driving its strategic goal and accelerate profitable growth in the Middle East and Africa region. The purchase price allocation was finalized on May 28, 2024, and resulted in non-tax-deductible goodwill of €208 million, which is allocated to the Global Forwarding CGU. The goodwill is mainly attributable to the synergies and network effects expected in Dubai and the northern Emirates. Customer relationships will be amortized over a period of seven to ten years. The useful lives of the property, plant and equipment range from 15 to 33 years. Current assets include trade receivables of €41 million. There was a difference of €2 million between the gross amount and the carrying amount.

There were no material derecognition or deconsolidation effects in the first half of 2024.

3 Significant transactions

Sale of shares by the KfW
On February 6, 2024, the KfW sold 50 million shares from its holding in Deutsche Post AG. This took the KfW’s shareholding to 16.45%. With the capital reduction that took place in May 2024, its equity interest increased again and stands at 16.99% as of June 30, 2024, note 14. The KfW remains the largest shareholder in Deutsche Post AG.

Share buyback of up to €4 billion
On February 12, 2024, the Board of Management resolved to expand the current share buyback program so that a total of up to 130 million treasury shares are to be purchased at a price of now up to €4 billion through the end of 2025. The purposes remain unchanged. The repurchased shares will either be retired, used to service long-term executive remuneration plans and any future employee participation programs or used to meet potential obligations if rights accruing under the 2017/2025 convertible bond are exercised, note 14.

Capital reduction
With the authorization granted by the Annual General Meeting on May 4, 2023, the Board of Management resolved on May 2, 2024, to reduce the issued capital by €39,059,409 through the retirement of 39,059,409 treasury shares, note 14. This was entered in the commercial register on May 22, 2024. The withdrawal and cancellation of the shares was confirmed by Deutsche Bank on June 6, 2024.

Issue of a new bond
On March 25, 2024, Deutsche Post AG issued a bond with a volume of €1 billion. The twelve-year term ends on March 25, 2036. The bond has a fixed interest rate of 3.5% per year. The revenue will primarily be used for general company purposes, including the refinancing of existing financial liabilities.

4 Adjustment of prior-period amounts

The final purchase price allocation for MNG Kargo and DHL Logistics resulted in adjustments to the balance sheet items below. The adjustments were accounted for in the opening balance and led to a corresponding adjusted presentation in the balance sheet as of December 31, 2023.