Speaker 1: Before the COVID pandemic upended the way the world does business,
Speaker 1: logistics was one of those industries that might have been
Speaker 1: taken for granted. That's not the case anymore due to
Speaker 1: other turbulences over the last two years. Customers are now
Speaker 1: realizing how important it is to have a reliable logistics
Speaker 1: partner on their side. Our people are doing a quite
Speaker 1: complex drop. People think, are they just to live up
Speaker 1: past it somewhere? That's an easy If you think about
Speaker 1: what our people are doing, it's quite complex. Businesses and
Speaker 1: consumers are suddenly thinking a lot more about how things
Speaker 1: they need reach places where they're needed. It's thrust the
Speaker 1: sector into the spotlight. Logistics and supply chain has become
Speaker 1: a household name. It's dramatically different than pre pandemic. Yes,
Speaker 1: it's grown, whether that's in market, revenue, profitability, investor in
Speaker 1: the dress. For Deutsche Post DHL Group, that's created opportunity
Speaker 1: to build on momentum and set ambitious goals for service
Speaker 1: and performance. When you look at our footprint, we're the
Speaker 1: most international logistics company there is. We want to become
Speaker 1: more digital and we want to be much more sustainable
Speaker 1: than we have been. D p d h l's revenue
Speaker 1: has sword since twenty with full year profit nearly doubling
Speaker 1: in one CFO. Melanie christ is a key leader of
Speaker 1: the team that's delivered these results, and she views her
Speaker 1: role as much more than just a number corruption. There are,
Speaker 1: unfortunately these cliches that finance is boring and it's kind
Speaker 1: of like been counting in the back office would be
Speaker 1: successful in finance. I mean, you have to have the
Speaker 1: financial expertise, right, but you also have to be credible
Speaker 1: business leaders in order to really impact the business and
Speaker 1: steer the direction. She is extremely smart and bright. You
Speaker 1: need somebody who is able to digest a lot of
Speaker 1: information that rapidly and can distinguish it's important what's less important.
Speaker 1: She has tremendous skill in that, and she's not afraid
Speaker 1: to cool people out to call out other members of
Speaker 1: the executive team. If she feels that something isn't being
Speaker 1: she does it in a very nice way. Actually, she
Speaker 1: helps me tremendously in straining the company because she is
Speaker 1: highly regarded by my other colleagues in the senior team,
Speaker 1: and typically if they have a problem, they share shared
Speaker 1: first with her before they come to me. When I
Speaker 1: think about the conversations I have with Frank. The shortest
Speaker 1: part is actually about the analysis and the facts. Um,
Speaker 1: it's more the debate about okay. On that basis, what
Speaker 1: are the options? What can we do? My role is
Speaker 1: essentially saying, in three sentences, what is working well in
Speaker 1: this company, where do we have challenges and what to
Speaker 1: do going forward. M Deutsche Post DHL Group consists of
Speaker 1: five divisions, Express Germany's post and parcel service, Global forwarding
Speaker 1: and freight, supply chain and e commerce solutions. Each of
Speaker 1: these segments has seen revenue growth in the last four years,
Speaker 1: while the surge of e commerce volume during the pandemic
Speaker 1: has had a direct impact on the trajectory. If you
Speaker 1: see e commerce as a very structural and fundamental growth
Speaker 1: driver for us as a company, what we now saw
Speaker 1: under the pandemic was a structural acceleration. It took us
Speaker 1: forward to a point in terms of e compenetration which
Speaker 1: we probably would have reached un enormal circumstances in three
Speaker 1: years time, So it was a big step forward. D
Speaker 1: P d h L was well prepared to take this step.
Speaker 1: The company's strategic plan recognized e commerce as a growing
Speaker 1: trend in the logistics landscape, but no one could have
Speaker 1: forecast the speed and breadth of the transformation when we
Speaker 1: are now seeing that also under the pandemic, not only
Speaker 1: domestic e commerce has taken a faster growth trajectories than anticipated,
Speaker 1: but also cross border e commerce um and we see
Speaker 1: that very clearly in our express network but also in
Speaker 1: our e con Solutions division. What are the other big
Speaker 1: structural shifts that you see on the horizon? Is it
Speaker 1: e commerce B two B? Is it increased trade as
Speaker 1: globalization restructures? What are the shifts that you're seeing The
Speaker 1: would be to be EQUALM is still at a very
Speaker 1: early stage, so we believe that there will be a
Speaker 1: huge growth opportunity there and we also see that when
Speaker 1: we're talking to our customers now. I guess everybody has
Speaker 1: been now realized that being dependent on just one supplier
Speaker 1: in one province in one country is probably not a
Speaker 1: good idea, so they want to build more resilience into
Speaker 1: the supply chain. I think our international footprint, our global strength,
Speaker 1: is really something we can leverage for the benefit of
Speaker 1: our customers. Another factor in the company's favor is its
Speaker 1: balance sheet. Since Melanie christ became se FO cash flow
Speaker 1: has improved significantly. One of my priorities over the last
Speaker 1: year's has been to really focus the whole organization on
Speaker 1: better cash generation. It's not just a finance job. Making
Speaker 1: sure that ultimately revenue converts into ebort and into cash
Speaker 1: in the bank account is the responsibility of the whole organization.
Speaker 1: She says, you know, we we can't be successful as
Speaker 1: a company if we are not collecting the cash for
Speaker 1: our services we have provided, and she has not missed
Speaker 1: one single opportunity to talk about that. I think it's
Speaker 1: a very comfortable situation, particularly in the current environment, to
Speaker 1: have a strong balance sheet. I think in that sort
Speaker 1: of respect, I'm very conservative and I rather have a
Speaker 1: bit more on the balance sheet and a bit more
Speaker 1: a buff us spell out for us what the priorities are,
Speaker 1: the longer term priorities in terms of putting some of
Speaker 1: that cash to use for you. The first priority here
Speaker 1: is organic growth. He clearly indicated also with our capex
Speaker 1: budget twelve billion for the next three years, that we
Speaker 1: will keep investing into organic growth. We are very focused
Speaker 1: on our regular dividend payment and then if there is
Speaker 1: something left, which is fortunately the case at the moment,
Speaker 1: we will think about in organic opportunities and we will
Speaker 1: also think about other means to allow our shoulders to participate.
Speaker 1: That is why we're currently running a two billion euros
Speaker 1: share by back program. In Organic opportunities include M and
Speaker 1: A like the recent purchase of beverage shipper Hiller brand,
Speaker 1: but deploying cash is always subject to careful consideration. Does
Speaker 1: Melanie ever turn around and say no when you're pushing
Speaker 1: through or pushing for a particular package of spending. Yes,
Speaker 1: she does it quite often, you know, because she has
Speaker 1: she You know, she is a person, and that's great
Speaker 1: if you have a CFO or who is risk of
Speaker 1: prose because you need somebody. You know. The business is
Speaker 1: always too optimistic. Melanie might be something too pessimistic, but
Speaker 1: that's a very healthy discussion. If we've the jointly come
Speaker 1: to the same conclusion after a debate, then we are
Speaker 1: probably in the right spot. How often do you find
Speaker 1: yourself saying no to divisional heads? So when I kind
Speaker 1: of like was promoted into the C of all position,
Speaker 1: my team gave me a stamp, was kind of like rejected.
Speaker 1: It sits on my desk. I think the fact that
Speaker 1: people know it sits there already has instilled quite a
Speaker 1: lot of discipline in the organization. UM, so I think
Speaker 1: UM when I get a proposal, it has also gone
Speaker 1: already gone through a number of iterations UM and is
Speaker 1: normally of such a high quality that I don't need
Speaker 1: to rejected a stamp too often for the time being.
Speaker 1: Christ should be able to keep that stamp in a draw.
Speaker 1: CEO Frank Cappelle has expressed a commitment to service quality
Speaker 1: and confidence that customers will accept higher prices that come
Speaker 1: with it. If you are too expensive, you will be
Speaker 1: out of business, But if you don't provide the right quality,
Speaker 1: you will be out of business. So we want to
Speaker 1: be We will never be the cheapest in town. That's
Speaker 1: not will be the premium provider. That's all the strategy.
Speaker 1: Of course, it's also more challenging for us than our
Speaker 1: customers are under pressure. At the same time, I think
Speaker 1: over all the last two years have shown that reliable,
Speaker 1: high quality supply chain comes at a certain price. Tech
Speaker 1: I definitely see that inflation is having a huge impact
Speaker 1: on the logistics industry, and there's been substantial price increases
Speaker 1: in the last few years. I do not see that changing.
Speaker 1: There's a lot of innovation happening. Uh, and I don't
Speaker 1: see the inflation necessarily going away. It might level out
Speaker 1: a bit, but it's not going to go away. Logistics
Speaker 1: companies may have pricing power with customers, but their stock
Speaker 1: prices haven't been so robust. I think that the issue
Speaker 1: there is the increase in interest rates has made everyone
Speaker 1: rethink and we can turned about the level of inventory
Speaker 1: that is out um you know, in the system, if
Speaker 1: you will, and with the level of disruption. I think
Speaker 1: what's happened more in the lasts is it more of
Speaker 1: a view that we're actually not heading into certainly an
Speaker 1: you can't slowdown maybe a recession. With more than half
Speaker 1: its revenue coming from Europe, investors may see dp d
Speaker 1: h L as more exposed to recession risk than its
Speaker 1: global peers. The company insists it can meet its revenue
Speaker 1: targets in the event of a downturn. It's counting on
Speaker 1: diversification as a cushion. I'm not so pessimistic that the
Speaker 1: that there is really a deep recession at our doorsteps.
Speaker 1: So but even then, you know, our portfolio is very
Speaker 1: much balanced. You know, we are everywhere in the world
Speaker 1: of the world will not go entirely in the recession
Speaker 1: A doubt that would it be a stretch to suggest
Speaker 1: that DP d h L is to some extent recession proof.
Speaker 1: I wouldn't go as as to say recession proof, but
Speaker 1: I think we are very well positioned to deal with
Speaker 1: all different types of recessions in every scenarios due to
Speaker 1: the breadth of the portfolio. The balance also portfolio really
Speaker 1: gives us a lot of resilience against any type of headwind.
Speaker 1: As the chief financial officer of one of the world's
Speaker 1: largest logistics companies, Melanie Christ has made her mark in
Speaker 1: global business. That's not what she originally attended to do.
Speaker 1: I really wanted to go into research. I wanted to
Speaker 1: become a physicist, and that was where my passion was.
Speaker 1: But then during my studies, UM some friends of mine
Speaker 1: started doing this strange thing. They went into management consulting.
Speaker 1: I didn't even know how to spell it, and I
Speaker 1: had no idea what it was about, but what they
Speaker 1: told me was quite interesting. Um and UM. So I
Speaker 1: ended up doing an internship with a consulting firm, and
Speaker 1: I learned more in the two months there than I
Speaker 1: had in the last two years in my physics job
Speaker 1: at university. That is how I ended up in consulting.
Speaker 1: She started her career with three years at mckensey, then
Speaker 1: spent four years in private equity with Apax Partners in
Speaker 1: London before joining Deutsche Post DHL Group into thousand and four.
Speaker 1: I was brought into the company to do international M
Speaker 1: and A project. That was at a time around twenty
Speaker 1: years ago when we were really building the company in
Speaker 1: the current shape, acquiring lots of logistics companies around the world.
Speaker 1: The M and A part was the first thing, and
Speaker 1: I then wandered into a more mainstream finance UH field
Speaker 1: here in in the group, becoming the CFO of our
Speaker 1: DIATL Express division. So from then on it was more
Speaker 1: leading towards the CFO role. Eventually, Melanie Christ now heads
Speaker 1: the finance team with around eleven thousand employees. Success in
Speaker 1: this role is as much an art as a science.
Speaker 1: If you do the greatest piece of analysis and you
Speaker 1: see it all and you know it all, but you
Speaker 1: can't convey that message and you can't convince the rest
Speaker 1: of the organization that we should move into a certain direction,
Speaker 1: it's useless. DP d h L is sending a consistent
Speaker 1: message with its investments. The company spent a hundred twenty
Speaker 1: three million euros to upgrade its logistics center at the
Speaker 1: Clone Bonn Airport, designing it around key strategic goals. Well,
Speaker 1: I love about this building is it actually shows them
Speaker 1: the big mega trends which formed our strategy which was
Speaker 1: inaugurated in tween this building opened. So globalization, connecting the
Speaker 1: worlds e commerce. We have a lot of sortation facilities
Speaker 1: here for smaller e commerce shipments. Sustainability, it's a very
Speaker 1: sustainable building that solar panels on the room and everything,
Speaker 1: and digitalization and well you can obviously see that it
Speaker 1: is quite automated. How did the team pitch this investment
Speaker 1: to you initially and how hard was it as a
Speaker 1: cell for them? How quickly did you turn around say yes,
Speaker 1: this is worth a hundred twenty three million euros. Of course,
Speaker 1: you always have to make sure that you have the
Speaker 1: right capacity for the growth in the network. And at
Speaker 1: that time they came and said, hey, we will really
Speaker 1: see a strong growth in new commerce volumes on top
Speaker 1: of the regular B two B growth. We need more
Speaker 1: sorting capacity, we need this building. And of course they
Speaker 1: always debates doesn't really have to coast under twenties three
Speaker 1: million euros and so on. But fortunately they convinced us
Speaker 1: because then with Corvid and the volumes hurt who urgently
Speaker 1: needed the capacity. At the same time as COVID accelerated
Speaker 1: demand for logistics services, disruptions in the labor supply hurt.
Speaker 1: Productivity advances and technology like this digital sort have helped
Speaker 1: offset some pressures. But automation also raises questions. Does this
Speaker 1: tell us that there's the business grows, this is gonna
Speaker 1: become a more automated business, that there's going to be
Speaker 1: less need for labor for workers. Well, you still see
Speaker 1: people here, and I think what you can nicely sportins
Speaker 1: here is the combination of technology which supports people. So
Speaker 1: for examply, when you look it's a customs area. It
Speaker 1: used to be a very manual and sometimes confusing process.
Speaker 1: Now the people are supported in picking the right hipments
Speaker 1: for customs inspections by light and they are automatically sorted
Speaker 1: in this sort of to go to customers expections. So
Speaker 1: it is also having the people. Um, it was the
Speaker 1: job they're doing here every day. We all a said,
Speaker 1: you know in two thousand, nineteen twenty, you know we
Speaker 1: might get one third less jobs in the current set
Speaker 1: up until twenty thirty if we digitalized for your organization,
Speaker 1: But we are very sure that our company will be
Speaker 1: at least fifty maybe hundred percent bigger, and we will
Speaker 1: have more jobs to offer than at the beginning of
Speaker 1: a couple of years ago when we started their journey,
Speaker 1: people said, oh, you know, I might lose one job.
Speaker 1: I haven't heard that in the last two years as
Speaker 1: a question in any town hall. This airport have also
Speaker 1: showcases dp DHLS aviation fleet, which both more than three
Speaker 1: hundred twenty dedicated cargo aircraft. We all in the biggest
Speaker 1: tone of our aircraft, but we also have short and
Speaker 1: medium and long term nieces and with the growth in
Speaker 1: our business, we anticipate that the people keep growing. And
Speaker 1: you've talked about investing, of course in sustainable fuel. Yes,
Speaker 1: when does that, when does that come online? How significant
Speaker 1: is it? Is it just the critics might say that's
Speaker 1: just window dressing around a part of the business that
Speaker 1: is of course very very carbon intensive, at least a
Speaker 1: lot of emissions. Yeah, so you absolutely right. The problem
Speaker 1: with our beautiful aircraft is the CEO two emissions and
Speaker 1: when you look at our overall, it's U two emissions
Speaker 1: to thirds up from aviation. It is about flying these
Speaker 1: birds with more sustainable fuel, and we said that we
Speaker 1: are really willing to spend billions on it. We now
Speaker 1: really hope that we will see the uptick in supply
Speaker 1: over the next year's spending billions isn't vague hyperbole. The
Speaker 1: company has pledged to put seven billion euros towards sustainable
Speaker 1: technologies and fuels by thirty with the goal of climate
Speaker 1: neutral logistics by twenty fifty. Just inability makes good business
Speaker 1: sense anyway, especially if you are in a business that
Speaker 1: is energy or fuel hungry. As a compliance element that
Speaker 1: not just operators in the logistics sector need to consider
Speaker 1: but also their customers, so being transparent becomes part of
Speaker 1: the service about their impact on the globe. We had
Speaker 1: a lengthy discussion should we make financial commitment how much
Speaker 1: we want to invest for the next decade in our
Speaker 1: sustainability and we had a long debate is it right
Speaker 1: to say we want to invest seven billion? Until there
Speaker 1: were pros and cons But that was a very intense
Speaker 1: discussion Melanie and I had where we finally came to
Speaker 1: the conclusion that this is a right number. This is
Speaker 1: a right approach. We convinced our colleague, and that's the
Speaker 1: reason why we are where we are. Where we are
Speaker 1: seen as somebody who really commit. They're not that many
Speaker 1: companies who have quantified their future investment, which opposed DHL groups.
Speaker 1: CFO Melanie Christ is often named to lists of the
Speaker 1: most powerful women in business, and while men still out
Speaker 1: number women as finance heads of large companies, there are
Speaker 1: signs that the balance is shifting. The number of female
Speaker 1: CFOs across major US companies has risen to an all
Speaker 1: time high. According to a study by Chris Colder Associates
Speaker 1: and executive search firm Cohen Partners reports that thirty six
Speaker 1: percent of new CFOs hired by notable companies in the
Speaker 1: first half of two were women. I asked Melanie Christ
Speaker 1: if she's encountered obstacles as a woman rising through the
Speaker 1: executive ranks. I have to say, UM, I have not
Speaker 1: made many negative experiences. UM. Maybe I was also a
Speaker 1: little bit even not thinking about these challenges so much so.
Speaker 1: I mean, when I studied physics, there weren't many women,
Speaker 1: so I was somehow always used to it. And it
Speaker 1: can also be an advantage when you're kind of like
Speaker 1: the only girl in the room. I mean the boss
Speaker 1: at the end remembers your name and not the nineteen
Speaker 1: guys who all kind of like we're dark suits and
Speaker 1: white shirts and look alike. Right. So, UM. I never
Speaker 1: experienced it um as a yeah, external stress factor. I
Speaker 1: have to say for me personally, it was more balancing
Speaker 1: my own UM expectations around kind of like getting family
Speaker 1: and the job combined. UM. But that was probably more
Speaker 1: of a pressure I put on myself, thinking that I
Speaker 1: had to be perfect in every dimension, and not something
Speaker 1: where the pressure was put on me from my male colleagues.
Speaker 1: So how do you take that experience and put it
Speaker 1: to play in terms of how you advance the role
Speaker 1: of women in this organization. I think the great thing
Speaker 1: is that now across the board in finance, but also
Speaker 1: in the group overall, we have role marvels which show
Speaker 1: young female talent that everything is possible. In finance, we
Speaker 1: have a share of women in management of thirty um,
Speaker 1: so we are ahead of the group. We want to
Speaker 1: get to thirty five percent by five I think they
Speaker 1: are not a position. If you have a vacancy. I
Speaker 1: want to have at least one woman on the short
Speaker 1: list because we have enough female talent, so every short
Speaker 1: list should contain a woman, and then the best person
Speaker 1: in the race should win. CEO Frank Capelle says Christ
Speaker 1: sets an example for the entire organization and he believes
Speaker 1: her success may influence the entire industry. She has proven
Speaker 1: that she is an outstanding CEFO and she's definitely a
Speaker 1: wrong one in many dimensions that you you know what
Speaker 1: I like about there? She is still, you know, a
Speaker 1: very warm and nice person and that makes such a
Speaker 1: big difference, so you can get to that level without
Speaker 1: compromising on how nice you are as a person. I
Speaker 1: think she's a great wrong one and I hope that
Speaker 1: this has had positive impact for many of us from
Speaker 1: the big picture down to the smallest operational details. Melanie
Speaker 1: Gryce is fully engaged in guiding dp DHL to the future.
Speaker 1: I wanted to know what she sees when she looks ahead.
Speaker 1: What do you see is the biggest opportunities for d
Speaker 1: P d H L over the next ten years. I
Speaker 1: think we have a fantastic portfolio and we just have
Speaker 1: to leverage the growth opportunities which are there both on
Speaker 1: the equam side um and also on the traditional B
Speaker 1: two B side, and the key differentiators for us will
Speaker 1: be digitalization, sustainability and our great people. As you look
Speaker 1: ahead ten years, what are some of the challenges what
Speaker 1: keeps you up at night as you think about the
Speaker 1: business going forward. I think we have to keep this
Speaker 1: focus and the ability to adjust in a very agile way.
Speaker 1: Sometimes when you kind of like think about all the
Speaker 1: risk controlling and stuff, people tend to create the impression
Speaker 1: that you can pre plan everything. That's clearly not the case.
Speaker 1: So I think we have to stay focused and keep
Speaker 1: the ability to react in a very edgile way. But
Speaker 1: looking at what happened over the last twenty four months,
Speaker 1: I'm very optimistic that we will also be able to
Speaker 1: cope with whatever happens next. And how do you see
Speaker 1: your role changing in the years ahead. I think it
Speaker 1: is changing at a very rapid pace, which is a
Speaker 1: great thing because it never gets boring. Um, those elements
Speaker 1: I just mentioned for the group overall, digitalization and sustainability
Speaker 1: are also hugely irrelevant for the finance role. It's like
Speaker 1: a new language you have to learn, and you learn
Speaker 1: the vocabulary, but then you also have to develop a feeling.
Speaker 1: If I kind of like, put so much capital into
Speaker 1: this de carbonization measure, I get so much in terms
Speaker 1: of return out of it. But that's a fascinating opportunity
Speaker 1: where we can make a huge difference for finance and
Speaker 1: for the group overall. As you look to the future, Melanie,
Speaker 1: what do you think is going to be the skill sets,
Speaker 1: the knowledge basis They're going to be essential to the
Speaker 1: success of future CFOs. Guess probably the two most essential
Speaker 1: new skills will be to get even better at lifelong learning,
Speaker 1: because we will have to learn so much new stuff
Speaker 1: every year, be it in the digitalization area, be it
Speaker 1: on sustainability. So this ability also as a fifty year
Speaker 1: plus old person to keep learning and keep the curiosity,
Speaker 1: I think that is going to be super essential. And
Speaker 1: the second element will be being a great team player.
Speaker 1: The world is complex, you can't know it all, so
Speaker 1: you really have to work even more strongly with your team.
Speaker 1: What advice would you give to someone who has just
Speaker 1: recently been appointed CFO. That's a great question. I think
Speaker 1: I would probably simply say, be curious and ask as
Speaker 1: many questions as you can, try to learn as much
Speaker 1: as possible, not only in the finance area, but get
Speaker 1: close to the business. Try to really understand the business,
Speaker 1: because only when you are close to the business and
Speaker 1: you understand the fundamental profit drivers will you'll be a
Speaker 1: really great, fearful I'm Tom Mackenzie. This is Bloomberg foot