"Carrying out growth plans with full energy"

Mr. Rosen, how would you describe the company's performance at the beginning of fiscal year 2012?

Larry Rosen: Given the slightly slower economy, we are very satisfied with the company's performance in the first quarter. We have gotten off to a good start: Both revenues and earnings rose. And this growth was produced on the Group level as well as - and this highlights the strong foundation of our success - in all divisions. To put it clearly: We are growing, and we are growing profitably. This pleasing performance is being fueled in part by the strong, continous growth in the domestic parcel business in Germany. In the DHL divisions, we are profiting more than ever from the investments we have made in our global network and our presence in the world's growth markets. In a nutshell: We are doing well in all divisions and remain on the right track. And there is one other critical issue that is particularly important to me as the CFO: Our financial situation remains very solid.

You just touched on the economy, which has not only stalled in Europe, but also slowed somewhat in some emerging markets. The euro crisis also has yet to be completely solved and is clouding the business climate. Is your business immune to all of this?

Larry Rosen: We have a clear advantage: We have a robust situation thanks to our very good and broad market position and our presence in the world's leading growth regions. For this reason, we can offset an economic slowdown in one area with growth in another area. You have to keep one other point in mind as well: The pace of worldwide economic growth may have indeed slowed, but we are a long way from a recession. And some regions, like Asia, are continuing to produce particularly strong growth. Thanks to the excellent market position that our DHL divisions have in this region, we continue to profit in an above-average way from the very dynamic growth being generated there. If anything, we have seen isolated traces of a lower economic dynamic only in our Global Forwarding, Freight division. As a result of a slowdown in demand from single sectors, revenues particularly in our air freight business have declined somewhat. However, thanks to our selective, profitability-driven strategy and our systematic cost management, this is having no impact on earnings. The opposite is actually true: The division's EBIT climbed sharply in the first quarter.

And how did the other DHL divisions perform?

Larry Rosen: In the two other DHL divisions - Express and Supply Chain - we also boosted revenues and earnings in the first quarter. The general growth trend remains intact in these areas. The key to this continued growth is that we not only have reaped what we have sown, but are also putting something back into the land. To better serve the increasing demands of our international express customers, we are currently investing nearly US$50 million in the expansion of our hub in Cincinnati. In China, we are investing US$175 million into our new hub for northern Asia that will go into operation in the second quarter of the year. With our state-of-the-art hubs in Leipzig, Hong Kong, Shanghai and the United States, we have a world-class global network. At Supply Chain, we concluded new contracts with a volume of nearly EUR 200 million in the first quarter alone. Taking all of this into account we have every reason to be pleased about our achievements and our future.

Were you surprised by the revenue growth and the disproportionately high increase in earnings produced by the MAIL division?

Larry Rosen: Considering the ongoing structural changes in the mail market that continue to burden us, we are very satisfied with the division's performance in the first three months of the year. But the first-quarter results are hardly surprising. Rather, they are the direct result of the far-reaching steps we have taken to achieve long-term stabilization of the division's profitability. The exceptionally dynamic parcel business is still the growth driver, and we are continuing to invest in its further development. And while we saw revenues and volume decrease in the traditional mail business - as expected - the pace of growth in the parcel business even picked up once again during the first quarter. Revenues and volume saw clear double-digit growth. With revenues of nearly EUR 850 million, this very successful part of our business now generates about one-quarter of all MAIL revenues. This underscores the key role that the parcel business will play in the division's future.

During the past fiscal year, you raised your earnings guidance several times. Will that happen again this year - anytime soon?

Larry Rosen: We consider the guidance we have issued to be ambitious, but realistic in the current business environment. As a result of the company's good performance in the first three months of the year, we have confirmed our guidance and continue to expect that we will generate operating earnings of EUR 2.5 billion to EUR 2.6 billion on the Group level during the current fiscal year. Should we hit this target - and it appears right now that we will - this would be an excellent result and be the fourth consecutive year that we increased our EBIT.

Earlier, you touched on the company's stable financial position. But your net liquidity has fallen sharply from the previous year's level. Why?

Larry Rosen: It is natural for a company's liquidity situation to change during the year. At the beginning of each year, the Group's operating cash flow and liquidity position are affected by the annual pension contribution that the company makes to the Bundes-Pensions-Service für Post und Telekommunikation. This regularly totals more than EUR 500 million. The first quarter also included a negative one-off effect related to the termination of a factoring program. For this reason, our net liquidity did indeed decrease. But at more than EUR 300 million, it is still very solid. We have the flexibility not only in the operational divisions, but also in the financial area that enables us to further carry out the global growth plans contained in our Strategy 2015 with full energy.

How will the company be affected by the payment that it will have to make to the German government as a result of the EU's state-aid decision?

Larry Rosen: We still think the state aid decision made by the EU Commission is unjustified. There is no merit to it whatsoever, and it clearly conflicts with a previous EU decision and the results of similar cases. For this reason, we have appealed the decision to the European Court of Justice. We have the backing of the German government, which has also filed an appeal. The payment - which we most likely will have to make in the second quarter - will have a temporary negative effect on our liquidity, but will not affect earnings. We also believe that the court will overturn the decision and that we will ultimately get our money back - plus interest.

A key development for the Group during the past quarter was the completion of Postbank's sale to Deutsche Bank. What do you think of the transaction in retrospect?

Larry Rosen: Our strong business performance demonstrates that the decision to withdraw from the banking business was the correct one to make. Financially speaking, we were able to carry out the transaction under good conditions and during a period of difficulties for the financial industry. Since then, we have been able to devote our full energies to our core business: the successful operation of our mail business and the continued implementation of our growth strategy in the global logistics business. At the same time, Postbank can continue its positive development under the wing of Deutsche Bank. We will continue to work together in the successful retail-outlet partnership. I would like to mention one other pleasing effect: In the first quarter, we have seen the final impact related to the sale of Postbank on our financial statements. In the future, our results will no longer be affected by the Postbank transaction.

The company is performing well, but the Standard & Poor's ratings agency has placed you on a watch list for of a possible downgrading. Do you think this could really happen?

Larry Rosen: S&P put us on the watch list because of the EU Commission's decision on state aid. As I stated earlier, we believe the decision by the EU Commission is completely unjustified and think we will get our money back when everything is said and done. Nonetheless, some rating figures will be temporarily impacted. It is too early to say just how this will affect our rating in the end.

This year's Annual General Meeting is about to be held. What sort of reception do you expect to receive from shareholders?

Larry Rosen: One point is clear: Our Group is in excellent shape. 2011 was a very good year for Deutsche Post DHL. We hit all of our targets, are growing according to plan and are systematically and successfully carrying out our Strategy 2015. The first quarter also clearly demonstrates that our operational business is flourishing and our financial position remains very comfortable. We want to share this success with our stockholders and have proposed to the Annual General Meeting that the dividend should be raised by EUR 0.05 per share to EUR 0.70. This dividend proposal reflects our finance strategy. As part of this strategy, we defined clear goals more than two years ago, and we have systematically met them since then. I think shareholders really appreciate this reliability. And they know that the Group is in better shape than ever - and that it maintains this position in a volatile economic environment. This is the best-possible demonstration of our business model's resilience.