The Quiet World Champion of Logistics - DHL Group
From a sluggish state monopoly to the world's largest logistics company. DHL Group moves millions of shipments around the globe every day, serving more than 220 destinations! Find out why we consider DHL Group such an attractive investment in our latest Monthly.
MONTHLY
This article does not constitute a buy recommendation or investment advice.
Table 1: DHL Group Business Models; Own Illustration
Every working day, a single German company moves millions of letters, parcels and freight shipments. DHL Group is the world's largest logistics group and, at the same time, one of the most reliable dividend payers in the DAX. No competitor can match its reach – DHL is by far the logistics provider with the largest global outreach. A story of transformation from a former state monopoly into a global champion!
Over 220 countries – no logistics company can serve more destinations than DHL Group!
Why am I writing about DHL Group? DHL Group is the world's largest logistics company – a blue-chip stock with predictable cash flows, an almost 30-year dividend history and a market position that is virtually unassailable. Stability, scale and dividend-paying capacity are combined with structural growth drivers such as e-commerce, healthcare logistics and decarbonisation. For long-term investors, the stock therefore combines substance and security with intact upside potential.
The Business Model: Logistics in Five Dimensions
Unlike a pure parcel delivery company, DHL Group covers almost the entire value chain of global logistics – across five divisions with very different margin and risk profiles. This diversity is precisely the key to understanding the group: when one division experiences cyclical weakness, another provides stability. This is how the five divisions looked in the 2025 financial year:
Table 2: Expected Margin Development; Own Illustration
DHL Express – The Profit Engine
Express is the profitable heart of the business: time-critical shipments between more than 220 countries, handled through its own intercontinental air freight network with dedicated hubs and cargo aircraft. This infrastructure represents a barrier to entry built over decades and through billions in investment – and it gives the company pricing power. The downside is its dependence on global trade: in 2025, time-critical shipments to the US declined noticeably as a result of higher tariffs. What is remarkable is how the division responded: through capacity discipline and pricing adjustments, EBIT increased despite declining volumes, while capacity was shifted to high-growth Asian routes.
Supply Chain – The Growing Stabiliser
Contract logistics for industrial and commercial customers is based on long-term contracts with high renewal rates – predictable, recurring revenues that generated record EBIT of over EUR 1 billion in 2025. The most exciting growth driver lies in pharmaceutical and healthcare logistics: with the acquisitions of CRYOPDP and SDS Rx, DHL is specifically strengthening a high-margin, regulation-driven segment that is structurally growing faster than the global economy.
Forwarding, eCommerce and Deutsche Post
Global Forwarding, Freight (freight forwarding by air, sea and land) generates substantial revenue but is cyclical: in 2025, declining freight rates weighed on earnings – although the division is highly profitable during periods of capacity shortages. eCommerce is growing structurally alongside online retail but is currently investing heavily in network expansion, temporarily weighing on margins. Finally, Post & Parcel Germany is the cash cow facing headwinds: approximately 40% market share in the German parcel business, but a structurally declining letter market and regulated prices. Nevertheless, profit increased by a quarter to EUR 1.03 billion in 2025 – despite the shrinking letter market. This demonstrates how consistently management controls costs.
What this means for our investors: No competitor combines express delivery, freight, contract logistics and a national postal network so extensively under one roof. When the cyclical freight business weakens, Express and Supply Chain provide support – this balance protects our clients' assets from fluctuations in individual markets.
Expected Margin Development – A Realistic Assessment
For an investment, the key question is not so much absolute growth, but whether profitability is improving sustainably. The group's EBIT margin improved from 7.0% (2024) to 7.4% (2025) – despite declining revenue. In other words, the company earns more per EUR of revenue. This is the kind of discipline we look for on behalf of our clients. The driving force is the "Fit for Growth" programme, which aims to structurally reduce the cost base by more than EUR 1 billion and will take full effect from 2027.
Following the exceptional economic conditions during the pandemic (2021 margin: 9.8%), profitability did not return to its previous level of 5–6%, but instead stabilised at a structurally higher level. As part of "Strategy 2030", management has formulated ambitions for each division – which we consider a realistic benchmark:
Table 3: Financial Performance of DHL Group; Own Illustration
My assessment: A sudden expansion in margins is not to be expected – the group is simply too large and too dependent on economic cycles. A gradual improvement towards 8% is realistic, driven by margin expansion in eCommerce following the investment phase, disproportionately strong healthcare growth in Supply Chain, and cost savings from "Fit for Growth". However, there are genuine constraints: the low-margin freight business and the regulated letter business weigh on the overall margin mix. We therefore deliberately use conservative assumptions.
What this means for our investors: A structurally increasing margin over the course of a decade is more valuable to investors than a one-off jump in profits: it demonstrates that management consistently translates efficiency gains into profits – and makes future earnings more predictable. This results in an attractive profile: downside margin risk is limited by broad diversification, while there is realistic potential for positive development on the upside.
Management: From Glider Pilot to Corporate Leader
At the helm since May 2023 is Dr. Tobias Meyer (born in 1975), CEO of DHL Group. Growing up in Schwalmstadt in northern Hesse, he studied industrial engineering with a focus on aviation technology and earned a doctorate in mechanical engineering at TU Darmstadt. A rather fitting educational background for someone working in logistics – Meyer has also been a passionate glider pilot since the age of 14, a hobby that reveals much about his enthusiasm for aerodynamics and precise planning.
His defining professional experience before DHL: 13 years at McKinsey & Company, becoming a partner in 2010, with many years spent working in Frankfurt and Singapore – and, as he himself emphasises, exclusively in transport and logistics. In 2013, he joined Deutsche Post DHL and worked his way through practically all the group's key positions: Head of Corporate Development, COO at DHL Global Forwarding, responsibility for Operations & IT, and finally CEO of Post & Parcel Germany.
“Joined Deutsche Post DHL in 2013 as Head of Corporate Development. This was a very conscious choice as I wanted to work in an area I had at least some expertise in and for an institution and for a person I trusted. It was a good choice. I never regretted the move.” - Dr. Tobias Meyer, CEO DHL Group, on his move to the company
An important sign of confidence for investors: in March 2026, the Supervisory Board extended Meyer's contract ahead of schedule until 2031. Supervisory Board Chair Dr. Katrin Suder justified the decision by stating that, under Meyer's leadership, the group had successfully completed "Strategy 2025" and sustainably improved profitability. "Strategy 2030", developed by Meyer and his team, is now intended to enable more targeted growth in a challenging market environment.
Competitive Position: Network and Diversification
The fiercest competitors are the US giants UPS and FedEx in the express business, as well as freight forwarding groups Kühne+Nagel and DSV. However, in one respect, DHL Group simply has no rival: global reach. UPS and FedEx are heavily focused on North America, while Kühne+Nagel and DSV do not operate their own integrated express and delivery networks. DHL is the only truly global provider covering express, freight, contract logistics and last-mile delivery worldwide from a single source.
Added to this is its discipline during periods of crisis: while competitors suffer sharp declines when volumes fall, DHL responds with active capacity management and efficiency programmes – its EBIT margin increased in 2025 despite declining revenue, while UPS announced a revenue decline of approximately USD 2 billion and Kühne+Nagel reported weaker operating earnings.
What this means for our investors: The real protective moat of this investment is its network. A globally integrated system combining express delivery, freight, contract logistics and a national postal network cannot be replicated overnight or without billions in investment – a classic barrier to entry. For investors, this means that the company's market position will remain defensible in the future, with competitors only able to gain market share gradually. This resilience forms the foundation for predictable cash flows and reliable dividends – and thus for the investment thesis as a whole.
The Market: Structural Drivers for Decades
The global logistics market is expected to grow at annual rates of around 7% until 2030. The strongest driver is the e-commerce boom: global online retail reached approximately USD 6 trillion in 2024, and e-commerce logistics is considered the fastest-growing segment. Additional drivers include the growth markets of Asia and the Middle East (where DHL is specifically expanding), high-margin healthcare logistics, entirely new demand profiles resulting from the AI and data centre boom, and decarbonisation – with approximately 45,400 electric vehicles and 10% sustainable aviation fuel, DHL is positioning itself as the "Green Logistics" provider of choice.
Latest Development: The USD 10 Billion Deal with the US Postal Service
The importance of the US market is underscored by the announcement of 28 May 2026: DHL eCommerce has signed an exclusive multi-year agreement with the United States Postal Service (USPS), with an expected value of over USD 10 billion – unprecedented in their 25-year partnership. DHL will handle sorting (19 fully automated hubs) and linehaul transportation, while USPS will manage the last mile across 41,550 ZIP codes and more than 170 million delivery points. In this way, DHL combines its own high-performance infrastructure with America's densest delivery network – without having to invest billions in its own fleet and facilities.
“This agreement creates a dependable, long-term platform for our customers. Working with USPS allows us to serve communities nationwide in a highly efficient way, minimizing additional vehicles on the road and supporting our commitment to reducing emissions." - Scott Ashbaugh, CEO DHL eCommerce Americas, 28 May 2026
What this means for our investors: Predictable, recurring revenues over many years in the world's most important individual market – developed in a capital-efficient manner because DHL leverages its network strength rather than building an expensive proprietary delivery infrastructure. It is precisely such long-term partnerships that provide the solid foundation on which we build for our clients.
Financial Performance
DHL Group has demonstrated that its business model remains profitable even during volatile periods. More important than fluctuations in revenue is the structural improvement in earnings and margins – accompanied by an uninterrupted record of dividend payments. A five-year perspective illustrates the trend:
Table 4: Valuation Scenarios 2030; own estimates
The Risks
Despite all its strengths, a serious analysis must also take a critical view. We identify the following risks:
Economic and Trade Sensitivity: The freight and express businesses depend on global trade. US tariff policy, the elimination of the de minimis exemption for small shipments to the US, and geopolitical tensions could weigh on volumes. Management itself classifies this as a medium-level risk.
Regulated Letter Business: The German letter business is structurally declining and now accounts for only a few percent of group profit. The Federal Network Agency most recently approved a postage increase of just 10.5% – less than DHL had requested.
Job Cuts & Delivery Quality: The reduction of approximately 8,000 jobs in the German letter and parcel business coincides with record levels of consumer complaints (over 44,000 in the first nine months of 2025).
Competitive Pressure in the Domestic Market: Amazon is expanding its market share through its own delivery service (approximately 25% of the German parcel market), challenging DHL's dominance.
Currency and Fuel Risks: Negative currency effects reduced revenue by approximately EUR 1.7 billion in 2025. Fluctuations in kerosene and fuel prices affect margins.
These risks are real, but manageable for a group of this size and diversification. They are reflected in our conservative valuation assumptions.
Valuation Scenarios 2030 - Our Own Estimates
We deliberately take a conservative approach to valuing DHL Group. The current P/E ratio of approximately 16.5x is slightly above the historical ten-year average, but remains moderate for a global logistics leader with stable cash flows. Scenario 1 conservatively assumes revenue growth of just 2.5% p.a. – roughly equivalent to real global trade growth – with stable margins. Scenario 2 assumes 4.5% p.a. (closer to market growth) and a slightly improved margin, supported by Express, healthcare logistics and the efficiency programme.
Figure 1: DHL Group's share price performance over the last 10 years; sourced from tikr.com.
Basis: Market capitalisation at entry EUR 44.6 billion (purchase price approx. EUR 40); base revenue 2026: EUR 84.5 billion (run-rate); growth horizon 5 years (2026–2030); OHP's own estimates.
What this means for our investors: At an average entry price of EUR 40 per share, we only need average growth to achieve an excellent return for our clients. The key factor is the continuation of the very positive margin expansion, which we consider highly realistic given current developments.
Conclusion
DHL Group is the rare example of a global market leader that is also attractively valued enough to offer substance and security. A management team with deep logistics DNA, a global network built over decades that cannot be replicated, a reliable dividend history, and a clear growth strategy aligned with the major megatrends of e-commerce, healthcare and decarbonisation. The recently concluded exclusive agreement with the US Postal Service worth more than USD 10 billion is a prime example of how the group translates the strength of its network into predictable, long-term revenue.
Ott, Hagen & Partner AG
© Copyright Ott, Hagen & Partner AG 2026. All rights reserved.