General
Total underlying operating income grew by €98 million from €240 million in 2009 to €338 million in 2010 (€317 million at constant foreign currency exchange). All segments contributed to this improvement, with the exception of the Americas. Underlying operating income is calculated as operating income after the adjustment of restructuring and other non-recurring or extraordinary items.
Europe & MEA
| Year ended at 31 December | 2010 | variance % | 2009 | ||
|---|---|---|---|---|---|
| Operating revenues | 4,453 | 7.5 | 4,142 | ||
| Operating income (EBIT) | 371 | 32.0 | 281 | ||
| Underlying operating income (EBIT) | 399 | 20.9 | 330 | ||
| (in € millions, except percentages) | |||||
Europe & MEA’s revenue improved organically (excluding acquisitions/disposals and external factors, i.e. fuel and foreign currency exchange differences) in 2010, mainly due to higher volumes, partially offset by the lower revenue-quality. Eastern Europe, Middle East and Africa experienced double-digit growth while the mature markets increased at a slower rate albeit from a higher base. Continued focus on cost efficiency led to further unit cost reductions, in spite of inflationary pressure in many markets.
Asia-Pacific
| Year ended at 31 December | 2010 | variance % | 2009 | ||
|---|---|---|---|---|---|
| Operating revenues | 1,656 | 33.2 | 1,243 | ||
| Operating income (EBIT) | 14 | 143.8 | (32) | ||
| Underlying operating income (EBIT) | 14 | 170.0 | (20) | ||
| (in € millions, except percentages) | |||||
Asia-Pacific experienced organic revenue growth of 17% (excluding acquisitions/disposals and foreign currency exchange differences) with the most significant contribution from China, mainly due to higher volumes from existing and new global customers. Currency effects added 15.9% to the revenue growth. Operating income improved in most markets, with the most significant improvement in China. Cost per consignment increased in line with higher inflation in most of these markets, but was offset by positive development of revenue-quality. Express increased its own capacity between China and Europe through the introduction of two additional Boeing 747 freighters to improve service and reduce its reliance on commercial linehaul, allowing the company to have more control over its linehaul costs in order to reduce costs.
Americas
| Year ended at 31 December | 2010 | variance % | 2009 | ||
|---|---|---|---|---|---|
| Operating revenues | 502 | 25.8 | 399 | ||
| Operating income (EBIT) | (67) | (109.4) | (32) | ||
| Underlying operating income (EBIT) | (39) | (62.5) | (24) | ||
| (in € millions, except percentages) | |||||
Total Americas’ revenue grew by 25.8%, driven by acquisitions (LIT Cargo, acquired in February 2009, and Expresso Araçatuba, acquired in May 2009: 10.3%) and currency related effects (17.8%). Americas’ organic revenue decreased by 2.3% due to contract rationalisation in Brazil, partially offset by the positive improvement of revenue-quality.
Express operates on a relatively small scale in North America, predominantly catering for US inbound demands of its global customers; as such it is an important part of the Express global network even though it does not have the size that allows for a profitable operation.
The underlying operating income for the Americas include an adjustment of ‡20m related to Brazil integration, customer claims and provisions. The reduction in underlying operating income is related to foreign currency exchange differences, and lower results in Brazil.
Other Networks
| Year ended at 31 December | 2010 | variance % | 2009 | ||
|---|---|---|---|---|---|
| Operating revenues | 448 | 4.2 | 430 | ||
| Operating income (EBIT) | 18 | 18 | |||
| Underlying operating income (EBIT) | 19 | 19 | |||
| (in € millions, except percentages) | |||||
Revenue increased organically by 3.5% mostly driven by increase in Innight activities. The operating income increase in Innight was offset by a similar decrease in the Fashion business, related to a few specific contracts.
Non-allocated
| Year ended at 31 December | 2010 | variance % | 2009 | ||
|---|---|---|---|---|---|
| Operating revenues | (6) | (6) | |||
| Operating income (EBIT) | (156) | 10.3 | (174) | ||
| Underlying operating income (EBIT) | (55) | 15.4 | (65) | ||
| (in € millions, except percentages) | |||||
Non-allocated operating income
| Year ended at 31 December | 2010 | 2009 | |
|---|---|---|---|
| Demerger costs | (45) | ||
| Projects | (7) | (5) | |
| Profit pooling | (41) | (92) | |
| Pensions | (15) | (12) | |
| Other costs | (48) | (65) | |
| Total | (156) | (174) | |
| (in € millions) | |||
In 2010, non-allocated operating costs amounted to €156 million (2009: 174) including €45 million of demerger costs and €41 million (2009: 92) relating to the profit and loss pooling arrangement (see Change in format, presentation and scope of results). Non-allocated pension costs of €15 million relate to Head Office employees, which have not been allocated to segments. Other costs relate to specific assigned tasks and events related to corporate activities which are not charged to segments.