Frank Appel admits a mistake at his last general meeting as Post boss: When he extended his management board contract a year and a half ago until just the date of this shareholder meeting, he assumed that 2022 would be a difficult financial year. “Then the hurdle wouldn’t have been so high” for his successor Tobias Meyer, says Appel, who is leaving after 15 years at the top. But in reality, last year Deutsche Post DHL achieved the fourth best operating profit in a row, and there was also a record for sales. “That doesn’t make it any easier for Mr. Meyer,” says Appel with sympathy.
At the general meeting in a Bonn congress center, shareholder representatives praised the 61-year-old Appel on Thursday; They thank him for leaving behind a “well cultivated field”, as Cornelia Zimmermann from the fund company Deka Investment puts it. The Dax group and its 600,000 employees worldwide are doing “better than they’ve been for a long time,” confirms Vanda Rothacker from the fund company Union Investment. The representatives wish the new boss Meyer every success.
The 47-year-old seamlessly took over the management of the world’s largest logistics group at the end of the Annual General Meeting. And the industrial engineer will be able to use friendly wishes, because the environment for the Bonn-based company has deteriorated significantly compared to the record year 2022. Management therefore expects profits at a similar level again in two years at the earliest, but perhaps not until the end of the decade.
Appel, on the other hand, benefited from a helpful environment in his last years at the top. The pandemic caused online trade and thus the number of parcels to grow even faster than expected. And airlines grounding their passenger jets meant no cargo could be taken in there in the luggage compartment. The prices for air freight shot up – and the post office was able to cash in heavily, because it has around 300 freight planes of its own in its express division.
The collective agreement costs 400 million euros per year
But the prices for air and sea freight have fallen sharply since the highs. At the same time, the economy has weakened, which means that transport volumes are falling. In the first quarter, the volume of air and sea freight at Deutsche Post DHL was almost a fifth below the previous year’s figure. In addition, the German letter and parcel business continues to cause problems. The division is struggling with the fact that fewer and fewer letters are being sent. In the meantime, the area accounts for less than a fifth of the group’s revenues.
The international freight forwarding and express business as well as warehouse services are sources of revenue and profit. The domestic letter and parcel business, on the other hand, makes little profit. And even just keeping it will be difficult, because the Post and Verdi signed a new contract for the 160,000 employees in this division in March. Their wages will rise by an average of 11.5 percent; the costs will increase by 400 million euros annually.
Meyer knows the area well. He came to Post from the management consultancy McKinsey in 2013 – Appel and his predecessor Klaus Zumwinkel had also worked there before their corporate career. From 2019 to summer 2022, Meyer managed the German mail and parcel business. In this tough market, the legal framework could soon change: the federal government wants to reform the postal law.
Which ties will Appel wear now?
Berlin is considering improving the conditions for Post’s smaller competitors at the expense of the group. In addition, the Federal Network Agency could for the first time be given the right to impose penalties if the service is not good. Just like last year, when many customers complained to the supervisory authority that the post office was delivering letters too late. Ironically, Meyer was responsible for the division and its quality problems until the summer. The management naturally sees the advances of the federal government critically. At the general meeting, Meyer says that the struggle for the postal law will be one of the focal points of his work in the coming months.
Appel, in turn, makes it clear that Swiss Post would, if necessary, refrain from being a universal service provider for Germany if the new rules were too unattractive. The universal service means that the group has to deliver letters nationwide – even in rural areas, where this is quite expensive. As a reward, the company does not have to pay sales tax in this division. An exit from the universal service is “clearly not” the intention of the company, says Appel. But “if the legislature forces us to take other measures, then we have to look at that and see what happens”.
Appel is full of praise for the new boss: “I would like a successor who is either better or different than me. Tobias Meyer is both,” he says. Appel himself will now focus primarily on another Bonn Dax company. He has been head of the Deutsche Telekom Supervisory Board for a year now. At the annual general meeting, a fashion-conscious shareholder representative wants to know whether Appel will soon be wearing ties in Telekom’s corporate colors. The manager dismisses this indignantly: He has never worn a Post/DHL tie and “I will not appear in a magenta tie”.