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Speaker 1: Before the COVID pandemic upended the way the world does business,

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Speaker 1: logistics was one of those industries that might have been

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Speaker 1: taken for granted. That's not the case anymore due to

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Speaker 1: other turbulences over the last two years. Customers are now

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Speaker 1: realizing how important it is to have a reliable logistics

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Speaker 1: partner on their side. Our people are doing a quite

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Speaker 1: complex drop. People think, are they just to live up

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Speaker 1: past it somewhere? That's an easy If you think about

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Speaker 1: what our people are doing, it's quite complex. Businesses and

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Speaker 1: consumers are suddenly thinking a lot more about how things

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Speaker 1: they need reach places where they're needed. It's thrust the

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Speaker 1: sector into the spotlight. Logistics and supply chain has become

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Speaker 1: a household name. It's dramatically different than pre pandemic. Yes,

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Speaker 1: it's grown, whether that's in market, revenue, profitability, investor in

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Speaker 1: the dress. For Deutsche Post DHL Group, that's created opportunity

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Speaker 1: to build on momentum and set ambitious goals for service

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Speaker 1: and performance. When you look at our footprint, we're the

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Speaker 1: most international logistics company there is. We want to become

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Speaker 1: more digital and we want to be much more sustainable

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Speaker 1: than we have been. D p d h l's revenue

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Speaker 1: has sword since twenty with full year profit nearly doubling

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Speaker 1: in one CFO. Melanie christ is a key leader of

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Speaker 1: the team that's delivered these results, and she views her

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Speaker 1: role as much more than just a number corruption. There are,

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Speaker 1: unfortunately these cliches that finance is boring and it's kind

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Speaker 1: of like been counting in the back office would be

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Speaker 1: successful in finance. I mean, you have to have the

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Speaker 1: financial expertise, right, but you also have to be credible

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Speaker 1: business leaders in order to really impact the business and

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Speaker 1: steer the direction. She is extremely smart and bright. You

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Speaker 1: need somebody who is able to digest a lot of

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Speaker 1: information that rapidly and can distinguish it's important what's less important.

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Speaker 1: She has tremendous skill in that, and she's not afraid

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Speaker 1: to cool people out to call out other members of

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Speaker 1: the executive team. If she feels that something isn't being

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Speaker 1: she does it in a very nice way. Actually, she

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Speaker 1: helps me tremendously in straining the company because she is

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Speaker 1: highly regarded by my other colleagues in the senior team,

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Speaker 1: and typically if they have a problem, they share shared

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Speaker 1: first with her before they come to me. When I

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Speaker 1: think about the conversations I have with Frank. The shortest

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Speaker 1: part is actually about the analysis and the facts. Um,

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Speaker 1: it's more the debate about okay. On that basis, what

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Speaker 1: are the options? What can we do? My role is

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Speaker 1: essentially saying, in three sentences, what is working well in

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Speaker 1: this company, where do we have challenges and what to

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Speaker 1: do going forward. M Deutsche Post DHL Group consists of

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Speaker 1: five divisions, Express Germany's post and parcel service, Global forwarding

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Speaker 1: and freight, supply chain and e commerce solutions. Each of

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Speaker 1: these segments has seen revenue growth in the last four years,

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Speaker 1: while the surge of e commerce volume during the pandemic

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Speaker 1: has had a direct impact on the trajectory. If you

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Speaker 1: see e commerce as a very structural and fundamental growth

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Speaker 1: driver for us as a company, what we now saw

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Speaker 1: under the pandemic was a structural acceleration. It took us

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Speaker 1: forward to a point in terms of e compenetration which

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Speaker 1: we probably would have reached un enormal circumstances in three

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Speaker 1: years time, So it was a big step forward. D

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Speaker 1: P d h L was well prepared to take this step.

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Speaker 1: The company's strategic plan recognized e commerce as a growing

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Speaker 1: trend in the logistics landscape, but no one could have

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Speaker 1: forecast the speed and breadth of the transformation when we

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Speaker 1: are now seeing that also under the pandemic, not only

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Speaker 1: domestic e commerce has taken a faster growth trajectories than anticipated,

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Speaker 1: but also cross border e commerce um and we see

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Speaker 1: that very clearly in our express network but also in

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Speaker 1: our e con Solutions division. What are the other big

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Speaker 1: structural shifts that you see on the horizon? Is it

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Speaker 1: e commerce B two B? Is it increased trade as

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Speaker 1: globalization restructures? What are the shifts that you're seeing The

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Speaker 1: would be to be EQUALM is still at a very

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Speaker 1: early stage, so we believe that there will be a

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Speaker 1: huge growth opportunity there and we also see that when

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Speaker 1: we're talking to our customers now. I guess everybody has

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Speaker 1: been now realized that being dependent on just one supplier

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Speaker 1: in one province in one country is probably not a

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Speaker 1: good idea, so they want to build more resilience into

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Speaker 1: the supply chain. I think our international footprint, our global strength,

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Speaker 1: is really something we can leverage for the benefit of

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Speaker 1: our customers. Another factor in the company's favor is its

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Speaker 1: balance sheet. Since Melanie christ became se FO cash flow

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Speaker 1: has improved significantly. One of my priorities over the last

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Speaker 1: year's has been to really focus the whole organization on

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Speaker 1: better cash generation. It's not just a finance job. Making

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Speaker 1: sure that ultimately revenue converts into ebort and into cash

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Speaker 1: in the bank account is the responsibility of the whole organization.

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Speaker 1: She says, you know, we we can't be successful as

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Speaker 1: a company if we are not collecting the cash for

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Speaker 1: our services we have provided, and she has not missed

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Speaker 1: one single opportunity to talk about that. I think it's

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Speaker 1: a very comfortable situation, particularly in the current environment, to

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Speaker 1: have a strong balance sheet. I think in that sort

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Speaker 1: of respect, I'm very conservative and I rather have a

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Speaker 1: bit more on the balance sheet and a bit more

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Speaker 1: a buff us spell out for us what the priorities are,

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Speaker 1: the longer term priorities in terms of putting some of

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Speaker 1: that cash to use for you. The first priority here

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Speaker 1: is organic growth. He clearly indicated also with our capex

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Speaker 1: budget twelve billion for the next three years, that we

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Speaker 1: will keep investing into organic growth. We are very focused

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Speaker 1: on our regular dividend payment and then if there is

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Speaker 1: something left, which is fortunately the case at the moment,

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Speaker 1: we will think about in organic opportunities and we will

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Speaker 1: also think about other means to allow our shoulders to participate.

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Speaker 1: That is why we're currently running a two billion euros

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Speaker 1: share by back program. In Organic opportunities include M and

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Speaker 1: A like the recent purchase of beverage shipper Hiller brand,

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Speaker 1: but deploying cash is always subject to careful consideration. Does

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Speaker 1: Melanie ever turn around and say no when you're pushing

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Speaker 1: through or pushing for a particular package of spending. Yes,

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Speaker 1: she does it quite often, you know, because she has

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Speaker 1: she You know, she is a person, and that's great

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Speaker 1: if you have a CFO or who is risk of

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Speaker 1: prose because you need somebody. You know. The business is

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Speaker 1: always too optimistic. Melanie might be something too pessimistic, but

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Speaker 1: that's a very healthy discussion. If we've the jointly come

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Speaker 1: to the same conclusion after a debate, then we are

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Speaker 1: probably in the right spot. How often do you find

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Speaker 1: yourself saying no to divisional heads? So when I kind

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Speaker 1: of like was promoted into the C of all position,

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Speaker 1: my team gave me a stamp, was kind of like rejected.

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Speaker 1: It sits on my desk. I think the fact that

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Speaker 1: people know it sits there already has instilled quite a

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Speaker 1: lot of discipline in the organization. UM, so I think

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Speaker 1: UM when I get a proposal, it has also gone

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Speaker 1: already gone through a number of iterations UM and is

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Speaker 1: normally of such a high quality that I don't need

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Speaker 1: to rejected a stamp too often for the time being.

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Speaker 1: Christ should be able to keep that stamp in a draw.

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Speaker 1: CEO Frank Cappelle has expressed a commitment to service quality

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Speaker 1: and confidence that customers will accept higher prices that come

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Speaker 1: with it. If you are too expensive, you will be

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Speaker 1: out of business, But if you don't provide the right quality,

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Speaker 1: you will be out of business. So we want to

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Speaker 1: be We will never be the cheapest in town. That's

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Speaker 1: not will be the premium provider. That's all the strategy.

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Speaker 1: Of course, it's also more challenging for us than our

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Speaker 1: customers are under pressure. At the same time, I think

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Speaker 1: over all the last two years have shown that reliable,

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Speaker 1: high quality supply chain comes at a certain price. Tech

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Speaker 1: I definitely see that inflation is having a huge impact

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Speaker 1: on the logistics industry, and there's been substantial price increases

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Speaker 1: in the last few years. I do not see that changing.

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Speaker 1: There's a lot of innovation happening. Uh, and I don't

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Speaker 1: see the inflation necessarily going away. It might level out

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Speaker 1: a bit, but it's not going to go away. Logistics

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Speaker 1: companies may have pricing power with customers, but their stock

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Speaker 1: prices haven't been so robust. I think that the issue

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Speaker 1: there is the increase in interest rates has made everyone

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Speaker 1: rethink and we can turned about the level of inventory

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Speaker 1: that is out um you know, in the system, if

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Speaker 1: you will, and with the level of disruption. I think

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Speaker 1: what's happened more in the lasts is it more of

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Speaker 1: a view that we're actually not heading into certainly an

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Speaker 1: you can't slowdown maybe a recession. With more than half

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Speaker 1: its revenue coming from Europe, investors may see dp d

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Speaker 1: h L as more exposed to recession risk than its

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Speaker 1: global peers. The company insists it can meet its revenue

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Speaker 1: targets in the event of a downturn. It's counting on

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Speaker 1: diversification as a cushion. I'm not so pessimistic that the

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Speaker 1: that there is really a deep recession at our doorsteps.

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Speaker 1: So but even then, you know, our portfolio is very

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Speaker 1: much balanced. You know, we are everywhere in the world

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Speaker 1: of the world will not go entirely in the recession

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Speaker 1: A doubt that would it be a stretch to suggest

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Speaker 1: that DP d h L is to some extent recession proof.

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Speaker 1: I wouldn't go as as to say recession proof, but

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Speaker 1: I think we are very well positioned to deal with

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Speaker 1: all different types of recessions in every scenarios due to

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Speaker 1: the breadth of the portfolio. The balance also portfolio really

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Speaker 1: gives us a lot of resilience against any type of headwind.

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Speaker 1: As the chief financial officer of one of the world's

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Speaker 1: largest logistics companies, Melanie Christ has made her mark in

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Speaker 1: global business. That's not what she originally attended to do.

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Speaker 1: I really wanted to go into research. I wanted to

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Speaker 1: become a physicist, and that was where my passion was.

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Speaker 1: But then during my studies, UM some friends of mine

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Speaker 1: started doing this strange thing. They went into management consulting.

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Speaker 1: I didn't even know how to spell it, and I

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Speaker 1: had no idea what it was about, but what they

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Speaker 1: told me was quite interesting. Um and UM. So I

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Speaker 1: ended up doing an internship with a consulting firm, and

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Speaker 1: I learned more in the two months there than I

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Speaker 1: had in the last two years in my physics job

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Speaker 1: at university. That is how I ended up in consulting.

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Speaker 1: She started her career with three years at mckensey, then

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Speaker 1: spent four years in private equity with Apax Partners in

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Speaker 1: London before joining Deutsche Post DHL Group into thousand and four.

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Speaker 1: I was brought into the company to do international M

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Speaker 1: and A project. That was at a time around twenty

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Speaker 1: years ago when we were really building the company in

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Speaker 1: the current shape, acquiring lots of logistics companies around the world.

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Speaker 1: The M and A part was the first thing, and

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Speaker 1: I then wandered into a more mainstream finance UH field

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Speaker 1: here in in the group, becoming the CFO of our

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Speaker 1: DIATL Express division. So from then on it was more

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Speaker 1: leading towards the CFO role. Eventually, Melanie Christ now heads

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Speaker 1: the finance team with around eleven thousand employees. Success in

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Speaker 1: this role is as much an art as a science.

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Speaker 1: If you do the greatest piece of analysis and you

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Speaker 1: see it all and you know it all, but you

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Speaker 1: can't convey that message and you can't convince the rest

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Speaker 1: of the organization that we should move into a certain direction,

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Speaker 1: it's useless. DP d h L is sending a consistent

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Speaker 1: message with its investments. The company spent a hundred twenty

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Speaker 1: three million euros to upgrade its logistics center at the

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Speaker 1: Clone Bonn Airport, designing it around key strategic goals. Well,

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Speaker 1: I love about this building is it actually shows them

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Speaker 1: the big mega trends which formed our strategy which was

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Speaker 1: inaugurated in tween this building opened. So globalization, connecting the

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Speaker 1: worlds e commerce. We have a lot of sortation facilities

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Speaker 1: here for smaller e commerce shipments. Sustainability, it's a very

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Speaker 1: sustainable building that solar panels on the room and everything,

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Speaker 1: and digitalization and well you can obviously see that it

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Speaker 1: is quite automated. How did the team pitch this investment

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Speaker 1: to you initially and how hard was it as a

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Speaker 1: cell for them? How quickly did you turn around say yes,

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Speaker 1: this is worth a hundred twenty three million euros. Of course,

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Speaker 1: you always have to make sure that you have the

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Speaker 1: right capacity for the growth in the network. And at

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Speaker 1: that time they came and said, hey, we will really

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Speaker 1: see a strong growth in new commerce volumes on top

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Speaker 1: of the regular B two B growth. We need more

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Speaker 1: sorting capacity, we need this building. And of course they

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Speaker 1: always debates doesn't really have to coast under twenties three

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Speaker 1: million euros and so on. But fortunately they convinced us

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Speaker 1: because then with Corvid and the volumes hurt who urgently

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Speaker 1: needed the capacity. At the same time as COVID accelerated

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Speaker 1: demand for logistics services, disruptions in the labor supply hurt.

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Speaker 1: Productivity advances and technology like this digital sort have helped

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Speaker 1: offset some pressures. But automation also raises questions. Does this

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Speaker 1: tell us that there's the business grows, this is gonna

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Speaker 1: become a more automated business, that there's going to be

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Speaker 1: less need for labor for workers. Well, you still see

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Speaker 1: people here, and I think what you can nicely sportins

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Speaker 1: here is the combination of technology which supports people. So

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Speaker 1: for examply, when you look it's a customs area. It

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Speaker 1: used to be a very manual and sometimes confusing process.

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Speaker 1: Now the people are supported in picking the right hipments

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Speaker 1: for customs inspections by light and they are automatically sorted

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Speaker 1: in this sort of to go to customers expections. So

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Speaker 1: it is also having the people. Um, it was the

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Speaker 1: job they're doing here every day. We all a said,

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Speaker 1: you know in two thousand, nineteen twenty, you know we

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Speaker 1: might get one third less jobs in the current set

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Speaker 1: up until twenty thirty if we digitalized for your organization,

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Speaker 1: But we are very sure that our company will be

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Speaker 1: at least fifty maybe hundred percent bigger, and we will

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Speaker 1: have more jobs to offer than at the beginning of

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Speaker 1: a couple of years ago when we started their journey,

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Speaker 1: people said, oh, you know, I might lose one job.

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Speaker 1: I haven't heard that in the last two years as

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Speaker 1: a question in any town hall. This airport have also

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Speaker 1: showcases dp DHLS aviation fleet, which both more than three

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Speaker 1: hundred twenty dedicated cargo aircraft. We all in the biggest

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Speaker 1: tone of our aircraft, but we also have short and

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Speaker 1: medium and long term nieces and with the growth in

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Speaker 1: our business, we anticipate that the people keep growing. And

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Speaker 1: you've talked about investing, of course in sustainable fuel. Yes,

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Speaker 1: when does that, when does that come online? How significant

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Speaker 1: is it? Is it just the critics might say that's

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Speaker 1: just window dressing around a part of the business that

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Speaker 1: is of course very very carbon intensive, at least a

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Speaker 1: lot of emissions. Yeah, so you absolutely right. The problem

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Speaker 1: with our beautiful aircraft is the CEO two emissions and

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Speaker 1: when you look at our overall, it's U two emissions

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Speaker 1: to thirds up from aviation. It is about flying these

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Speaker 1: birds with more sustainable fuel, and we said that we

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Speaker 1: are really willing to spend billions on it. We now

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Speaker 1: really hope that we will see the uptick in supply

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Speaker 1: over the next year's spending billions isn't vague hyperbole. The

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Speaker 1: company has pledged to put seven billion euros towards sustainable

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Speaker 1: technologies and fuels by thirty with the goal of climate

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Speaker 1: neutral logistics by twenty fifty. Just inability makes good business

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Speaker 1: sense anyway, especially if you are in a business that

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Speaker 1: is energy or fuel hungry. As a compliance element that

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Speaker 1: not just operators in the logistics sector need to consider

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Speaker 1: but also their customers, so being transparent becomes part of

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Speaker 1: the service about their impact on the globe. We had

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Speaker 1: a lengthy discussion should we make financial commitment how much

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Speaker 1: we want to invest for the next decade in our

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Speaker 1: sustainability and we had a long debate is it right

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Speaker 1: to say we want to invest seven billion? Until there

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Speaker 1: were pros and cons But that was a very intense

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Speaker 1: discussion Melanie and I had where we finally came to

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Speaker 1: the conclusion that this is a right number. This is

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Speaker 1: a right approach. We convinced our colleague, and that's the

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Speaker 1: reason why we are where we are. Where we are

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Speaker 1: seen as somebody who really commit. They're not that many

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Speaker 1: companies who have quantified their future investment, which opposed DHL groups.

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Speaker 1: CFO Melanie Christ is often named to lists of the

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Speaker 1: most powerful women in business, and while men still out

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Speaker 1: number women as finance heads of large companies, there are

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Speaker 1: signs that the balance is shifting. The number of female

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Speaker 1: CFOs across major US companies has risen to an all

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Speaker 1: time high. According to a study by Chris Colder Associates

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Speaker 1: and executive search firm Cohen Partners reports that thirty six

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Speaker 1: percent of new CFOs hired by notable companies in the

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Speaker 1: first half of two were women. I asked Melanie Christ

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Speaker 1: if she's encountered obstacles as a woman rising through the

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Speaker 1: executive ranks. I have to say, UM, I have not

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Speaker 1: made many negative experiences. UM. Maybe I was also a

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Speaker 1: little bit even not thinking about these challenges so much so.

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Speaker 1: I mean, when I studied physics, there weren't many women,

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Speaker 1: so I was somehow always used to it. And it

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Speaker 1: can also be an advantage when you're kind of like

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Speaker 1: the only girl in the room. I mean the boss

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Speaker 1: at the end remembers your name and not the nineteen

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Speaker 1: guys who all kind of like we're dark suits and

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Speaker 1: white shirts and look alike. Right. So, UM. I never

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Speaker 1: experienced it um as a yeah, external stress factor. I

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Speaker 1: have to say for me personally, it was more balancing

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Speaker 1: my own UM expectations around kind of like getting family

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Speaker 1: and the job combined. UM. But that was probably more

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Speaker 1: of a pressure I put on myself, thinking that I

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Speaker 1: had to be perfect in every dimension, and not something

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Speaker 1: where the pressure was put on me from my male colleagues.

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Speaker 1: So how do you take that experience and put it

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Speaker 1: to play in terms of how you advance the role

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Speaker 1: of women in this organization. I think the great thing

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Speaker 1: is that now across the board in finance, but also

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Speaker 1: in the group overall, we have role marvels which show

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Speaker 1: young female talent that everything is possible. In finance, we

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Speaker 1: have a share of women in management of thirty um,

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Speaker 1: so we are ahead of the group. We want to

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Speaker 1: get to thirty five percent by five I think they

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Speaker 1: are not a position. If you have a vacancy. I

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Speaker 1: want to have at least one woman on the short

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Speaker 1: list because we have enough female talent, so every short

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Speaker 1: list should contain a woman, and then the best person

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Speaker 1: in the race should win. CEO Frank Capelle says Christ

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Speaker 1: sets an example for the entire organization and he believes

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Speaker 1: her success may influence the entire industry. She has proven

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Speaker 1: that she is an outstanding CEFO and she's definitely a

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Speaker 1: wrong one in many dimensions that you you know what

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Speaker 1: I like about there? She is still, you know, a

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Speaker 1: very warm and nice person and that makes such a

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Speaker 1: big difference, so you can get to that level without

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Speaker 1: compromising on how nice you are as a person. I

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Speaker 1: think she's a great wrong one and I hope that

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Speaker 1: this has had positive impact for many of us from

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Speaker 1: the big picture down to the smallest operational details. Melanie

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Speaker 1: Gryce is fully engaged in guiding dp DHL to the future.

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Speaker 1: I wanted to know what she sees when she looks ahead.

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Speaker 1: What do you see is the biggest opportunities for d

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Speaker 1: P d H L over the next ten years. I

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Speaker 1: think we have a fantastic portfolio and we just have

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Speaker 1: to leverage the growth opportunities which are there both on

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Speaker 1: the equam side um and also on the traditional B

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Speaker 1: two B side, and the key differentiators for us will

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Speaker 1: be digitalization, sustainability and our great people. As you look

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Speaker 1: ahead ten years, what are some of the challenges what

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Speaker 1: keeps you up at night as you think about the

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Speaker 1: business going forward. I think we have to keep this

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Speaker 1: focus and the ability to adjust in a very agile way.

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Speaker 1: Sometimes when you kind of like think about all the

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Speaker 1: risk controlling and stuff, people tend to create the impression

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Speaker 1: that you can pre plan everything. That's clearly not the case.

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Speaker 1: So I think we have to stay focused and keep

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Speaker 1: the ability to react in a very edgile way. But

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Speaker 1: looking at what happened over the last twenty four months,

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Speaker 1: I'm very optimistic that we will also be able to

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Speaker 1: cope with whatever happens next. And how do you see

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Speaker 1: your role changing in the years ahead. I think it

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Speaker 1: is changing at a very rapid pace, which is a

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Speaker 1: great thing because it never gets boring. Um, those elements

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Speaker 1: I just mentioned for the group overall, digitalization and sustainability

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Speaker 1: are also hugely irrelevant for the finance role. It's like

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Speaker 1: a new language you have to learn, and you learn

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Speaker 1: the vocabulary, but then you also have to develop a feeling.

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Speaker 1: If I kind of like, put so much capital into

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Speaker 1: this de carbonization measure, I get so much in terms

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Speaker 1: of return out of it. But that's a fascinating opportunity

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Speaker 1: where we can make a huge difference for finance and

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Speaker 1: for the group overall. As you look to the future, Melanie,

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Speaker 1: what do you think is going to be the skill sets,

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Speaker 1: the knowledge basis They're going to be essential to the

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Speaker 1: success of future CFOs. Guess probably the two most essential

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Speaker 1: new skills will be to get even better at lifelong learning,

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Speaker 1: because we will have to learn so much new stuff

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Speaker 1: every year, be it in the digitalization area, be it

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Speaker 1: on sustainability. So this ability also as a fifty year

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Speaker 1: plus old person to keep learning and keep the curiosity,

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Speaker 1: I think that is going to be super essential. And

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Speaker 1: the second element will be being a great team player.

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Speaker 1: The world is complex, you can't know it all, so

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Speaker 1: you really have to work even more strongly with your team.

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Speaker 1: What advice would you give to someone who has just

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Speaker 1: recently been appointed CFO. That's a great question. I think

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Speaker 1: I would probably simply say, be curious and ask as

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Speaker 1: many questions as you can, try to learn as much

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Speaker 1: as possible, not only in the finance area, but get

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Speaker 1: close to the business. Try to really understand the business,

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Speaker 1: because only when you are close to the business and

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Speaker 1: you understand the fundamental profit drivers will you'll be a

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Speaker 1: really great, fearful I'm Tom Mackenzie. This is Bloomberg foot