UPDATE: Deutsche Post Presents Strategy For Growth

Deutsche Post AG (DPW.XE) Wednesday presented its new strategy that focuses on quality and new products at its mail unit and cross-divisional collaboration at its logistics division.

As part of the plan, called "Strategy 2015," the company will rename Deutsche Post World Net, which encompasses the mail and logistics business, as Deutsche Post DHL. The holding company will remain Deutsche Post AG.

Deutsche Post, one of the world's largest express and logistics companies, said the plan was targeted at defending its "strong position on the German mail market and raising profitability at DHL."

The mail unit will refocus its core business and concentrate "on the integration of physical and digital solutions in dialog marketing," in response to decreasing volumes and increasing digitalization.

Logistics unit DHL, which comprises the former express, supply chain and global forwarding and freight divisions, will aim to strengthen collaboration across those separate divisions.

For the mid-term, the company is targeting annual organic growth in all divisions to outperform the market by one to two percentage points. The company wants its divisions to be in the top quarter of their peer groups in terms of profitability, cash conversion and return on capital.

The company, which competes with the likes of TNT NV (00906.AE), FedEx Corp. (FDX) and United Parcel Service Inc. (UPS), reiterated it main short-term goals; to maintain its solid cash position and further lower costs.

A significant contribution comes from a program introduced in November, 2007, that will save EUR1 billion in non-operating costs by the end of 2010.

The DHL divisions can significantly increase revenue by jointly responding to customer requests, the company said.

Deutsche Post Feb. 25 cut its 2009 earnings outlook due to slumping volumes and said it posted a net loss in 2008 of EUR6.9 billion. It expects adjusted earnings to fall in 2009, but predicted reported earnings would improve significantly due to lower one-time charges. It also had indicated it won't be able to provide a firm outlook for the year.

At 1142 GMT, Deutsche Post shares traded up 1.2% at EUR7.49, outperforming the broader market. The shares have lost almost 65% of their value over the past 12 months compared with a drop of about 40% in the blue-chip DAX index during that time.

 
   Company Web site: www.dp-dhl.com 
 
   -By Hilde Arends, Dow Jones Newswires; [phone]; [e-mail]