DHL Asia Pacific and China Strategy

Frank Appel Shanghai, 11 July 2012

Asia: Most dynamic global growth region

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

Asia Pacific: An important growth engine for global GDP Asia Pacific: A major driver of the world

Population: GDP: Export:

~ 56% (3,871 mn) ~ 30% (EUR 14.77 trillion) ~ 33% (EUR 4.84 trillion)

Dom. demand: ~ 30% (EUR 14.43 trillion)

Asia Pacific: Strong and stable growth rates GDP growth (real) in % (yoy) 10 Forecast

Asia Pacific: Fastest global growth region Share of absolute GDP growth (2010-2015) 9.8% 13.7% 48.8% 27.7% APAC Americas Europe Other

5 0
2012F 2013F 2014F 2015F 2007 2008 2009 2010 2011

Source: IHS Global Insight (Deutschland) GmbH, 2012

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

 in the centre of gravity for global trade

Example: Air Cargo & Containerized Ocean Freight

Intra<->Asia Trade 32% of total trade (2015) CAGR 7.4% *)

Latin America<->Asia 5% of total trade (2015) CAGR 11.2% *)

Middle East-Africa<->Asia 9% of total trade (2015) CAGR 7.6% *)

More than 40% of global trade expected to originate from three triangles of trade around Asia by 2015
Source: Seabury Cargo 2012; Air Cargo & Containerized Ocean Freight in Metric Tons *) CAGR 2010-2015; for information: Europe<->Asia: 13% of total trade (2015), CAGR 6.4%; North America<->Asia: 13% of total trade (2015); CAGR 6.4% 2010-2015

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

DHL Asia: A strong contributor to the Group

Revenue 20111)2): EUR 38.9bn Others

19%

Asia Pacific

Revenue 20111): EUR 11.4bn

Asia Pacific 30%

Revenue 20111): EUR 10.9bn

Asia Pacific 26%

Revenue 20111): EUR 13.1bn Asia Pacific 9%

Others Clear market leadership in Asian TDI

Others No. 1 in air freight, No. 2 in ocean freight

Others Market leader in contract logistics in Asia

1) External revenue = revenue generated by the divisions from non-Group third parties; 2) incl. DHL Freight

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

We are pioneers in Asia, continuously expanding operations

NOT EXHAUSTIVE
1980 DHL entered China through an agency agreement with Sinotrans 2000 Central Asia Hub (Hong Kong) begins operations 2004 DHL acquires 68% stake in Blue Dart (India) Today

New openings
North Asia Hub, Shanghai (Express)

1991 DHL Danzas Air & Ocean started from a representative office

2003 DHL acquires stake in Sinotrans

2009 DHL opens domestic transportation hub (supply chain) in Shanghai

DHL established presence in China through Intl Express

DHL expanded into global forwarding and contract logistics segments

DHL established presence in dom. transportation services

Future Investments

1980

1990

2000

2005

2010

1986 DHL established JV with Sinotrans 1998 Danzas Z.F. Freight Agency Co. established as a JV

2002 DHL acquires stake in Air Hong Kong 2005 DHL inaugurates Oceania Hub at Sydney Airport

2007 DHL first intl provider of dom. airfreight services in China

MegaHub, Hong Kong (Supply Chain)

Source: DHL, DHL Business Strategy in China (ICFAI Center for Management Research, 2004)

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

Key growth levers in Asia

Improving connectivity, facilitating trade growth North Asia Hub for EXPRESS in Shanghai

Next day delivered everywhere in EU Early bird Overnight Europe from Pearl River Delta

DHL is the most reliable and fastest Express services provider in Asia

GoWest Following growth westward

Trans Pacific Flights Intra-Asia andTrans-Pacific routes

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

Continuously expanding in Asia

New projects in Asia in 20121) EXEMPLARY Mumbai Distribution center for Life Sciences & Healthcare Jun. 2012 Round-the-world-flight, linking Hong Kong, Los Angeles and Leipzig Mar. 2012 Jakarta New multi-user warehouse Jun. 2012 Korea LCL global forwarding hub Aug. 2012 (planned) DHL Door-to-More direct distribution solution from Asia to Europe (Global Forwarding) Jun. 2012 Hong Kong New International Service Center May 2012 Hong Kong Direct flights from Hong Kong to Chengdu and Ho Chi Minh City June 2012

New openings in China July 2012 Shanghai North Asia Hub Hong Kong Supply Chain MegaHub Shenzhen2) DHL Integrated Logistics Center December 2012 Shanghai Airfreight bonded facility expansion

1) Multitude of other investment projects ongoing, for example upgrade and enhance capacity & capability of AFR/OFR/RFR/multimodal products/facilities in Mid-West China, furthermore upcoming launch of multi-national LCL gateway in Korea; 2) Shenzhen Qianhaiwan Free Trade Port Area

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

China: Global hub and dynamic domestic market

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page

China will remain the engine of the global economy until 2025

Real GDP Growth (Indexed 2010 = 100%) 300 250 China

Origin of Growth 2010 2025 Origin of Absolute GDP Growth (EUR bn) 9,719 4,616

200 150 APAC w/o China World North America Europe 3,664

4,408

4,519 5,103 (China)

0 2010 2015 2020 2025

Europe

RoW

North America

APAC

Source: Copyright IHS Global Insight (Deutschland) GmbH, 2012

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 10

The China of tomorrow

China in 2025 5 million buildings

Half of the worlds buildings constructed until 2025

50,000 skyscrapers
The equivalent to constructing up to 10 New York cities

5 billion square meters of road will be paved

Today its only half of it and even less than in Germany

Chinas urban population increase by 350 m

More than the population of todays United States

221 cities with more than one million people

Europe has 35 today

Source: McKinsey Global Institute Preparing for Chinas urban billion, 2009

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 11

Logistics has a key role to play in Chinas development

As China continues on a path of globalization, logistics has a key role to play:

Help China integrate stronger with the global economy by facilitating international and domestic trade flows Help accelerate the pace of innovation with intelligent logistics solutions Help international players to be successful in China and support Chinese heroes in their quest for internationalization Support shift to environmentally conscious business practices with green logistics solutions

Offer efficient logistics solutions as key enabler of growth

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 12

DHL Express in China: First foreign express company to enter China in 1980

Key strategic growth levers

(DHL Sinotrans) >30 years of experience in China Covering >400 cities in China >110,000 customers Appr. 6,000 employees >30% market share in time definite international

High Potential Regions: Southwest (Chengdu & Chongqing), central cities (Wuhan & Zhengzhou, Northeast Region (Dalian, Qingdao, Jilin, Shenyang)

Emerging industries: Consumer electronics, Automotive, Healthcare, Engineering & Manufacturing, Fashion

Specific Initiatives: Growth initiatives targeted at specific industry sub-segments at city or provincial level, e.g. Wedding Gowns from Suzhou

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 13

DHL Global Forwarding in China: No. 1 Freight Forwarder in the market

Key strategic growth levers Continuous sector development: Maintain strength in Hi-Tech and further expand into Fashion & Luxury, Automotive, Life Sciences, Energy, Retail and Engineering & Manufacturing Expand customer portfolio: From global multi-nationals to fast-growing enterprises and local small- and medium-sized enterprises

First foreign logistics company to enter China domestic airfreight market >35,000 customers Around 3,000 employees Appr. 400,000 sqm of warehouse space

Deliver operational excellence: Enhance exception management and complaint handling through one-touch initiative

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 14

DHL Supply Chain in China: Integrated logistics solutions for key industries

Key strategic growth levers

>25 years experience with domestic transportation and distribution in China >4,000 employees Around 200 customers >600,000 sqm of warehouse and cross docking space 1)

Sector-focused business development Leverage on global solutions with adaptation to local requirements

Focus on operational excellence and quality Continuous investment in IT applications and warehouse footprint

Talent & people development Consultative selling and key account management

) including Hong Kong and Taiwan

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 15

Recent investment: New North Asia Hub in Shanghai

Opening ceremony: 12 July 2012 Regional Express Hubs in Asia Pacific Central Asia Hub Hongkong Seoul Beijing Delhi Bangalore Bangkok Singapore Taipei Manila North Asia Hub Shanghai at Pudong International (PVG)

North Asia Hub Shanghai First-class Express hub Part of multi-hub strategy in Asia Pacific

Sydney Hubs Regional Hubs Commercial Air Hubs

Frank Appel | Shanghai | 11 July 2012

Auckland

Investment of US$ 175m New capacity, greater flexibility and reliability for guaranteed time-definite delivery

Deutsche Post DHL | Page 16

Outlook for Logistics Service Providers in China

There is enormous potential for logistics services in China. But some key challenges remain:

Economy still growing faster than Chinas logistics infrastructure Reliable policy framework for logistics Market fragmentation Stringent regulations for licensing, transport, customs Strong demand for talent

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 17

Our DHL strategy in a nutshell: Continuously increasing our strength in China and beyond

The importance of China and its growth potential is huge (>25% of global GDP growth between 2010 and 2015).

DHL is a pioneer in China and leading logistics provider in the market (e.g. 40% market share in international express).

We continue expanding our presence in China by investing in infrastructure, service excellence and sector management.

The new North Asia Hub in Express is an important milestone, strengthening our leading position in the region substantially.

Frank Appel | Shanghai | 11 July 2012

Deutsche Post DHL | Page 18

DHL Asia Pacific and China Strategy

Frank Appel Shanghai, 11 July 2012