So far there are “no details to be able to make calculations”, “there are no scenarios yet”. His successor as CEO Tobias Meyer, who will take over the baton after the general meeting, had already said on Wednesday that the group would take a look at Schenker if Deutsche Bahn decided to sell it. We will wait and see the developments. When the time comes, they will see whether Schenker meets the usual criteria for an acquisition, Meyer said in the media conference call after the figures for the first quarter were published. The usual criteria for a transaction apply – the acquisition must bring the group forward strategically – be it with increased “management capacity or a physical network”. The transaction must be “feasible at a reasonable price” and the takeover target must be “easily integrated”.
Several shareholders and representatives of fund companies expressed skepticism about such a takeover on Thursday.
DWS would be against the acquisition. “We believe that such a large acquisition with subsequent restructuring and integration involves great risks for us shareholders. We therefore prefer smaller, selected additions to the portfolio,” said DWS fund manager Sabrina Reeh, who represents DWS Investment GmbH.
Cornelia Zimmermann from Deka Investment said she hoped that the group would “weigh the costs, risks and opportunities very carefully, especially in the case of possible acquisitions – such as the entry into DB Schenker that is currently being discussed”.
Vanda Rothacker, senior ESG analyst at Union Investment, hopes the decision for or against such a takeover will not be influenced by political considerations. She wanted to know from management how specific scenarios for a possible transaction were calculated and how the company viewed a takeover from a strategic point of view.
According to Appel, “there are no political guidelines”. However, if a sale were to be made, potential interested parties would have to “arm themselves quickly” in order to be able to act quickly. The federal government holds around 20.5 percent of Deutsche Post’s share capital via KfW. Although Deutsche Bahn AG has been organized under private law since 1994, it is fully owned by the federal government.
Contact to the author: [email protected]; @UlrikeDauer_
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May 04, 2023 07:12 ET (11:12 GMT)
Deutsche Post shareholders criticize long AR mandates, virtual AGM
-Several Deutsche Post shareholders do not want to discharge the group’s supervisory board or abstain from voting on the agenda item because they accuse it of lacking independence. For example, be a board member Stephen Schulte, who is also Fraport boss, has been in office since 2009. Schulte is the chairman of the finance and audit committee of the supervisory board. According to Deka, “due to his long term of office, he can no longer be regarded as independent, and that is not acceptable according to current corporate governance standards”. According to their own statements, the fund companies Deka Investment and Union Investment, among others, want to vote against the discharge, while DWS wants to abstain. The representative of the DSW shareholders’ association sees a dependency only after 15 years of membership on the board, “that is, from 2024”.
Chairman of the Board Nicholas von Bomhard said he sees a limit at 15 years. Schulte’s mandate expires in 2024, the supervisory board will deal with the replacement.
Several shareholders, including Deka, Union and DSW, also rejected plans to change the articles of association to hold virtual general meetings for two years. They called for attendance or hybrid general meetings to be retained. The Annual General Meeting on Thursday was held in person, but also broadcast online (hybrid).
Sending letters without the post office? Group does not rule out exit
Deutsche Post wants to continue to deliver letters and parcels everywhere in Germany in the future, but calls for the appropriate framework conditions. The outgoing CEO Frank Appel said on Thursday at the postal general meeting in Bonn that the company wants to continue to be a universal service provider in the future. This includes the nationwide delivery obligation – i.e. also in rural areas, where delivery is relatively expensive. However, Appel made it clear that an exit would be possible in the event of adverse conditions. “If the legislature forces us to take other measures, then we have to look at that and see what happens.”
The 61-year-old manager, whose term ended on Thursday, was referring to the reform of the postal law, which has not been significantly amended since 1999. So it comes from a time when letters were much more important than they are today and the internet only played a minor role. Since then, the post office has had to comply with obligations such as the requirement that 80 percent of the letters posted must be with the recipient the next working day. In addition, there must be a post office in every larger village, which is usually a retailer with a post office counter. In addition, mailboxes must be easily accessible.
The Federal Ministry of Economics is currently working on a draft law that is to be presented by the summer. At the beginning of the year, the ministry presented a key issues paper that announced a “fundamental modernization of the postal legal framework”. Overall, the announcement was still quite vague.
Appel called the content of the paper “mixed”. “It’s a bit of squaring the circle: you want universal service to continue. You don’t want prices to go up. You want the best working conditions and there should also be competition – and that in a segment where profits are shrinking.” In particular, the planned “further steps” to strengthen the Post’s competition in the letter market, where the Bonn company has a market share of 85 percent, caused dissatisfaction in the post office. In addition, the Post points out that postage in Germany is relatively cheap compared to other EU countries.
With his statement on universal service, Appel addresses a sensitive topic. Because it is clear that no other company would be ready to deliver letters nationwide. If the post were to get out, the Federal Network Agency could oblige them to continue their delivery. In all likelihood, however, the prices for postal mail would then change significantly.
Long-standing group leader Appel emphasized that the exit from the universal service was “clearly not” the intention of the group. His reference to the previously only theoretical possibility of opting out is to be understood as a pointer to politicians not to put Swiss Post in a worse position than before in the forthcoming reform.
At the Annual General Meeting, shareholder representatives also emphasized the importance of the forthcoming reform. “The cost situation in the letter and parcel area should lead to more flexible delivery in the Postal Act,” said Marc Tüngler from the German Protection Association for Securities Ownership (DSW).
He was referring to the consideration of lowering the 80 percent quota and allowing two-class mailing – then most letters would take longer to reach the recipient and some more expensive letters would arrive faster. “The customer can choose whether he would like a letter to be delivered to its destination quickly or less quickly,” said Tüngler. That makes sense if the longer delivery time is cheaper than what is offered today.
Appel, who in future wants to concentrate on his role as head of the Telekom supervisory board, developed the Bundespost, which was privatized in the 1990s, into a major global corporation that now only generates a sixth of its operating profit in its core business – i.e. domestic letter and parcel shipping. The earnings pearls are global express services and freight business.
Appel’s successor will be 47-year-old Tobias Meyer, who, like his predecessor, used to work for the management consultancy McKinsey. The 47-year-old has been on the Post board of directors since 2019 and is now moving to the top. He recently announced that he intends to stick to the course of his predecessor.
With around 600,000 employees worldwide, a good third of them in Germany, Swiss Post can look back on years of strong growth. This year, however, profits are expected to fall due to the weakening economy.
Warburg Research lowers Deutsche Post to ‘Hold’ – target 47 euros
The analysis house Warburg Research downgraded Deutsche Post from “buy” to “hold”, but raised the price target from 46 to 47 euros. The opportunity/risk ratio of Deutsche Post is becoming less and less attractive, analyst Christian Cohrs justified his new investment vote in a study published on Thursday. That is why he is now more cautious with regard to the further development of the share price, although he assesses the general quality and the financial prospects of the logistics group as positive. Due to the good figures for the first quarter, however, he has raised his forecasts slightly.
Deutsche Post shares temporarily lost 1.30 percent to EUR 43.27 in XETRA trading.
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