Deutsche Post AG
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Thank you. Hello, and good morning to everyone out there. Thank you that could follow our invitation from last night so, so quickly, it's on the preliminary figures we released yesterday. And as announced, we've got Frank Appel, group's CEO; and Melanie Kreis, group's CFO with us today. We're going to take you through the slides that I take it you have in front of you. And after that, there will be time for Q&A. And with that, right over to you, Frank.
Yes. Thank you, Martin. Good morning from my side as well, and thank you for joining us this morning. So yes, let me go straight away into the presentation and start with Page 2. We had, of course, an excellent fourth quarter, and that has led to very good numbers above our previous guidance by quite a bit. And that is reflected in our EBIT as equally in our free cash flow. So we are very happy about that, the total EUR 4.8 billion on a preliminary basis and the cash flow around EUR 2.5 billion, I think, are really excellent results, and that is driven by a lot of volume growth we have seen.On that basis, we have raised our midterm target to the previous one, of course, given that we went out [indiscernible], of course, have not the same time to prepare for as detailed as we usually give it in March, and we were given in March. We feel confident that we definitely will be better than 2020 this year and also next year, better than this year how much we will see in the next weeks. But of course, we feel very confident that we will get better numbers, and that's the reason why we have withdrawn the old guidance and have approved that on the basis, as you'll see later on. But as I already said, above this year's numbers.That is based on Page 3 on tremendous growth. We have seen it in Express. We have also seen that in Parcel, we have seen that equally, eCommerce Solutions, even if we had not given you the detailed numbers yet. But we really have a lot of tailwind from the eCommerce business. And our people have done a fantastic job in the last months, but particularly in the peak period, and that's the reason why we really are very thankful for our colleagues to delivering a very good service quality throughout the whole peak period.And with that, I'd like to hand over to Melanie to give you a little bit more detail on our quarterly numbers and the full year numbers.
Yes. Thank you, Frank, and good morning also from my side. On Page 4, we've put together the preliminary revenue and EBIT numbers for the fourth quarter and the full year 2020. And I just want to talk about a couple of highlights on that page.Starting with the Q4 revenue growth. As you can see in the second column for the group, we had a 13% revenue growth in the fourth quarter. That was a clear acceleration from the 4.4% we showed in the third quarter, driven by some of the trends you saw on Page 3, the acceleration in e-commerce volume growth. And that is also visible then in the divisional composition of the growth. So the highest revenue growth was in our eCommerce Solutions division, 33%, a very strong finish to the year. Equally in Express, 20% growth, a very strong performance. And also Parcel Germany, revenue grew, of course, more than 12%. But in P&P overall, we also have the declining revenue from the mail postal piece. There we saw continued volume decline, but at a slightly better level than what we had in Q3. So very strong revenue growth in the fourth quarter, which took us for the full year to a 5% revenue growth and the overall group EBIT for the year 2020 stands at close to EUR 67 billion.When we look at the EBIT development, 56%. Frank already mentioned it for the fourth quarter. Absolute EBIT in the fourth quarter, close to EUR 2 billion. Of course, the one divisional number really sticking out here is the Express number. The EUR 1.40 billion, EUR 1.25 billion in the quarter, and that is, of course, a tremendous achievement, 70% growth. So really outstanding performance.But also on the P&P side, a very strong finish to the year, 28% growth. And yes, in the fourth quarter of 2020, eCommerce Solutions was actually still negative in 2019, and now EUR 75 million. So all the divisions where we had the direct impact of e-commerce growth showed an extremely strong performance, not only on the top line, but also on the bottom line.And then we come to the full year numbers. On the right side of the page, EUR 4.84 billion, Frank already mentioned it. Again, I think the number really sticking out here is the EUR 2.75 billion from Express. The 35% EBIT growth for the full year. And of course, also EUR 160 million from eCommerce Solutions, fast forward on the growth trajectory we had planned for our youngest operating division.As you know, we have a couple of one-offs in our reported EUR 4.8 billion, which is why we have updated the bridge on Page 5, a bridge you are all familiar with because we showed it in the previous quarter already. So this bridge gives you a feeling for what was really the operating improvement from 2019 to 2020, where we have tried to peel out the one-off effect both in 2019 and in 2020. The '19 effect, I think, well known, and so the starting point is EUR 4.48 billion, that was our underlying performance in 2019.When we look at the one-off effects in the full year 2020, we didn't have much in the fourth quarter. So in terms of COVID's onetime effect, it's the EUR 262 million. You are already familiar with the onetime bonus, EUR 163 million, and certain impairments, EUR 99 million from the second quarter.And on the StreetScooter side, we had already indicated at the end of last year that we are going to stretch out the ramp down into '21, '22. And that brought number for the full year impact in 2020 down to now around EUR 320 million.So if you take those onetime effects out, the underlying operating number for 2020 stood at EUR 5.4 billion, which is 34% more than underlying 2019 or in absolute terms, EUR 1.4 billion, that is, of course, a very pleasing result. And the EUR 5.4 billion is going to be important when Frank talks about our guidance going forward because we indeed see that as our new starting point from which we now want to grow going forward.Good operating performance was the basis for good operating cash flow. And that allowed us to continue investing. And we will then now turn to Page 6.I remember that in the second quarter, we had some questions about, oh, shouldn't you kind of like stop CapEx, and we had taken the decision early on. Anticipating some of the volume development, even though in the end, it was even stronger, but we had to continue investing into our infrastructure. That is what we did throughout the year. That is also what we did in the fourth quarter. When you look at the CapEx in the fourth quarter, it was EUR 1.35 billion, taking the full year CapEx number to EUR 3 billion. We know that this is slightly above our guidance of EUR 2.9 billion, but that was a conscious decision, seeing how well the cash flow developed, seeing how strongly the volume growth was, we actually moved forward some of the planned investments and hence, consciously slightly overspent on the gross CapEx.When you look at the year-over-year comparison, you probably are all aware that in 2019, we had EUR 1.1 billion of the 777 CapEx in the EUR 3.6 billion. In 2020, it was just EUR 320 million. So when you kind of take out 777, the underlying number was a growth from EUR 2.5 billion to EUR 2.7 billion, which I think is quite balanced but reasonable given the enormous growth we saw on the business side.Yes. And now to my favorite number in the whole presentation, not surprisingly, the free cash flow number on the very right of the page, you can see that for the full year, our free cash flow is going to be around EUR 2.5 billion. We are still kind of like looking at all the tiny details of cash in remote places. So it's around EUR 2.5 billion, I'd like, to do some currency adjustments. But I think the order of magnitude is definitely right. And that is, of course, again, significantly better than the EUR 2 billion we have given you as a lower base point for 2020. And obviously, in sync with our best EBIT ever, also our best free cash flow ever.That takes me to Page 7, kind of like the wrap-up of the high level financials for 2020. You can see that, obviously, on the EBIT side, we have fully delivered or in most dimensions significantly over delivered on our latest guidance. And I mean, obviously, when we gave the guidance end of last year, we were probably a bit conservative because we didn't know whether operations would really hold, whether the volumes would really come, whether there would be customer insolvencies. We also didn't anticipate a second lockdown in large parts of the world. And so what happened in the end was really that top line growth was stronger than we had anticipated. It came in a very balanced way. So on the operations side, we were able to really cope with the growth without 2 significant disturbances on the cost side. So it was really just a perfect [ relaunch ] leading to this very strong over-delivery in the last weeks of the year.And on the free cash flow, yes, I already mentioned it, we were able to translate that into good cash flow. They have shown yellow tick for the CapEx. But for me, psychologically, it's actually a green tick because it was a conscious decision. And on the tax rate, we anticipate to be at the upper end, around 24%. So much for the high level numbers.With Page 8, we are going back to business trends for 2020, which are also, I think, relevant for what to expect going forward. And with that, I'll hand over to Frank again.
Yes. Thank you, Melanie. So yes, indeed, on Page 8, you can see what has been the dominant theme in 2020, is that it's a structural acceleration of the e-commerce. And at the same time, a significant drop in B2B volumes. But fortunately, we have seen already in Q4. If you take TDI already growth again year-over-year, which is good. And of course, that will give us some tailwind into 2021.Overall, on Page 9, you can see our exposure, we have grown across the board in all our bits and pieces. In e-commerce, we have launched that strategy already as a part of our 2020 strategy. We started in 2014. And you now really see that we are benefiting from that in all parts as well. So the focus on that segment has been the right one. Even I remember that some of you might have had a concern how much B2C might dilute our quality of earnings. And as we have proven just last year, it has strengthened our portfolio quite a bit.On Page 10, why we expect a better 2021 than 2020 is based on that we will get, I think, good tailwind on B2C, not as strong as we have seen that last year because we have to assume that we will get our lockdowns again for the year, but we will see a continuation of B2C growth. And of course, this -- our lockdown is different from the first. I think we see still a significantly more economic activity than in last year's spring, and that shall help our B2B business, be it in Express or DGF (sic) [ DGFF ] and freight or supply chain quite a bit, too. So that's the reason why we are optimistic overall for our portfolio.Of course, on Page 11, we are playing an important role in the distribution of vaccines. We have already contracts with players, and we are doing our best to really bring that as fast as possible to the countries. We expect increasing volumes in due course. But of course, it is not a game-changer for the overall numbers, but it's important, I think, for the world of the logistics industry, and we, in particular, are helping really to get the vaccine distributed.On Page 12, we have the muscle and the strength to continue in our investments last year. Melanie just said that, and we will continue to do so in the new year. As you know, we announced yesterday as well that we buy additional 8 airplanes. And again, it's the same game as the first 14 that we will replace now in growth capacity we have on more short-term capacity, and we'll replace that so that we are not betting on long-term fast growth. We really have enough flexibility, but we thought like before for the last 14 that it's the right time to buy our additional airplanes to really fulfill the needs of the Express business with that amazing performance. And we will do continue as well in the others.That's the reason why now the guidance for CapEx is at the upper end of the previous guidance. But at the same time, we feel confident that we will deliver on the upper end as well for our free cash flow even beyond, like on Page 13, where we say and as I already said earlier, it's too early to give you all detail, but being very early in the year, we feel very confident that this year will be stronger than last year. And on the underlying basis, I mean we start from, as Melanie said, EUR 5.4 billion. And next year will be stronger than this year again. And that's significantly above our previous guidance. And on the cash flow, we will be better than EUR 6 billion, and we will be at the upper end of our CapEx guidance.More detail, we will come back later to you in March, but we believe that this is already a significant lift against the previous guidance we have given you, given the very early time of the year as well. So in summary, to wrap up, we had a great year. It was a record. I say that with some pride as well. We gave you EUR 5 billion in 2014 as a goal for 2020. If you just exclude only the bonus payment, not split to any one-offs, we are just above that or at that point.And I think long term, 6 years in advance to give you that guidance, I think, has proven to be pretty ambitious, as many of you said, but I think we have delivered against what we have promised. And you always can argue how much tailwind and headwind you get but we didn't know that even in 2014, so spot on. Yes, the number -- the reported number is slightly lower. But as we said, we paid everybody, EUR 300. And I think that's well invested money as well from a shareholder's perspective as well because the morale of the organization has been amazing, and we saw that as well in our U.S. results.So we are also very well positioned. As at end of 2019, we are in better shape than ever. Our muscle has strengthened through the crisis. We are now even better shape than we were end of 2019, and that's the reason why we believe we can capture the potential from e-commerce, but also from the returning B2B business in the same way. So we are in great shape, and that's the reason why we also give a positive outlook for this year and beyond.Thank you very much. And now the floor is yours for any Q&A.
[Operator Instructions] And the first question is from the line of Andy Chu of Deutsche Bank.
Two questions, please, for me. The first one is around free cash flow. And then maybe just some comments around sort of cash returns and then just that -- I know, Frank, you mentioned it's obviously very early in the year to put out your sort of midterm guidance, but it does feel very concerned to the free cash flow guidance, given that you've delivered EUR 2.5 billion in 2020. You expect EBIT to be up for the next 2 years. And yet, that implies kind of just more than EUR 3.5 billion of free cash flow for '21 and '22.And then the second question is around B2C and obviously, your comments on Slide 10, but you expect B2C to grow in 2021 from a higher base. I just wondered how much of that is due to sort of you mentioned sort of lockdowns continuing into 2021. Would you, therefore, believe that in 2022, with the hopefully unlikely to be any sort of further lockdown, but volumes in B2C can grow in 2022 off of 2021?
Yes. Melanie will talk about the first. Maybe I'll start with the second. So we said already before that we expect that we will go back to a normal growth rate if the COVID-19 is over. So this year is definitely still significantly impacted. Proof of evidence is China. China has not been locked down and Chinese business and e-commerce has grown and continue to grow quite rapidly. So we believe that from 2022 on, we should be more normal rates. And always, in Germany, we always said it's -- the market will grow between 5% and 7%. In some other markets, it will be higher for sure. [ Internal ] continental might be growing faster as well. It's too early to judge. But we believe that even beyond 2021, we will see a structural -- now after the structural change now where many years will be pulled forward and accelerated the e-commerce transition, we will go back to normal levels after COVID-19 is over. But of course, we will see a continuation of growth. E-commerce is still only a small part of the global retail business, and that's the reason why there should be a continuation of growth beyond COVID-19. And Melanie, maybe you can say something about cash flow.
Yes. So on the free cash flow guidance, I think the EUR 6 billion really should be seen as a minimum floor. We are fully aware of the math if you take the EUR 2.5 billion, at least only EUR 3.5 billion for the remaining 2 years. And we understand that, that would be seen as a disappointment. So it is obviously a floor.Given that it's so early on in the year, and we haven't had an opportunity to do any system-based analysis on, for example, how did the working capital really finish at the end of 2020? We just need a bit more time to give you a solid new guidance, and that is what we will do for '21. And then, of course, also for the new midterm period out to '23 on the 9th of March.
The next question is from Cristian Nedelcu of UBS.
Three, if I may. The first one in Express. Could you give us a rough indication what is the -- what was the one-off tailwind to EBIT in 2020 in the Express division on the back of the higher air freight rates and high load factors? And I guess in that regard, the Express EBIT margin was above -- well above 14%. It used to be 12% EBIT margin before. So what is the sort of normalized level you expect there?The second one, could you give us a bit more color on your returns on capital employed in Express and in PeP? I guess -- and if we can tie this up to your CapEx guidance, you are guiding for growth in CapEx, some of it the 777 order. If you can elaborate a little bit more where else are you growing the CapEx and how that is tied up to your return on capital into other expectations?
Okay. So in terms of Express margin distortions. So I mean, first of all, what we have done throughout the year since the onset of the crisis is we have tried to utilize an emergency surcharge to compensate for extra cost particularly on the aviation side. And that has worked very well. But the idea here was really to make this an offset. So I think the fundamental driver for the very good margin performance, both in the third quarter and the fourth quarter has been the strong volume growth, the [ perfect ] utilization of a network with fixed costs, which we're now really nicely utilized. And what was particularly helpful, starting the third quarter, but also in the fourth quarter, was a very balanced utilization. So we had really good growth across the regions. And so that was a very ideal setup. I already said that when we talked about the Q3 numbers. It showed you what margin we can do in Express in a perfect constellation is that going to be the new normal on the margin side. I think it shows you what is possible. I think we now have to see how the volume growth and the utilization continues going forward.In terms of return on capital employed. We have good ROCE numbers both for Express and P&P. So in our CapEx-heavy divisions, we are earning a good return on the capital employed. And obviously, also with the forward-looking CapEx, the intention is to keep it that way.And talking about CapEx going forward. Indeed, the biggest increase will be in -- at the divisions where we have seen the very strong volume growth, where we have fixed asset network operations. So it will be in Express. It will be in eCommerce Solutions, and it will be in Parcel Germany. There, we will, of course, continue with our shift from less utilized mail sites and getting parcel in there. So we will try to continue with that game, which helps us quite a lot.
Understand. I guess, short follow-up. Could we quantify roughly the ballpark returns in Express and in PeP? Are you talking about mid-teens? Are you talking about low teens below?
Yes. So I mean, I haven't seen the final balance sheet numbers myself yet for 2020. So this is some of the stuff we now really want to do properly, but we are -- I mean our internal [ WAC ] is 8.5%, which we always use for our EBIT after asset charge calculations and both P&P and Express are very solidly overdelivering against that.
The next question is from Neil Glynn of Crédit Suisse.
If I can ask 2 questions, please. The first one, with respect to your growth in the Parcel and the Express side and what that means for head count progression. If you could give us a feel for how many people you expect to add in each area in 2021 if possible.And then the second question with respect to Express. I've seen that the weakening of the U.S. dollar relative to a lot of the APAC currencies have become a bigger theme. And historically, when it's moved the other way, when you've had a bit of a headwind, the market has adjusted pricing in Asia, in particular, to absorb that headwind. Just interested, do you expect the same thing to happen again with the market adjusting pricing in the other direction this time around? Or is the APAC currency development relative to the dollar, the tailwinds, to think about for 2021?
Okay. So in terms of growth and what does that mean for FTE. I mean, directionally, we indeed assumed that we should add head count. I think what we have now shown is that we have been able to really increase efficiencies. So that is one of the drivers for the good performance. We don't budget precisely for FTE, so we don't have a target number for '21. But I think what our divisions have shown across the board in 2020 is that they really know how to do that in a very efficient way. And I would expect that trend to continue.Yes. In terms of currency, that's indeed an interesting question where -- I mean in terms of pure U.S. dollar, we are short. So -- but the rate of the upside from the Asian currency bucket is currently higher for us. So at the moment, currency looks favorable for us.The general way we do it in Express is when we do our general GPI discussion in the fall and we agreed on the price increase for our country, FX is obviously one of the things we take into consideration. That has now also happened for the '21 pricing. We normally don't adjust in the course of the year. So I think on -- unless there's a mega -- massive distortion. And so at the moment, that should be indeed a bit of a tailwind, but let's see how the year develops. We were actually in the similar situation at the beginning of last year. And then, of course, under COVID, everything changed on the currency side. So it's nothing we bank on but it would be nice to have a bit of tailwind here for once.
The next question is from Adrian Pehl of Commerzbank.
Three questions from my side. Well, first of all, on CapEx. Actually, as you had a press release, obviously, on 8 [indiscernible] 777s. I was just wondering how that's baked into your CapEx forecast? And could you elaborate a little bit on the respective financing of the aircraft? And when they will become part of your fleet?And second is on supply chain very quickly. I was quite positively surprised by the Q4 results at the end. And I was wondering if there is some kind of, call it, one-off or potentially phasing effects that we have probably in the past already on real estate or anything like that to be taken into account.And lastly, sort of a bit of an outlook into Q1 would be pretty much interesting, in particular, on the parcel-related divisions, eCommerce Solutions and P&P, given that we should suspect probably that volumes should be quite high. But then I would assume that, let's say, kind of peak levels should be more distributed evenly throughout the quarter. Should we actually assume comparably significantly better cost base in these divisions in Q1 versus the fourth quarter? Or is it quite some cost sticky in the March quarter?
Okay. Let me start with the 777s. So yes, first of all, maybe a sentence on the phasing. From the old 14, the first 777 order, 10 have already been delivered. The remaining 4 will come in the first 7 months of '21. So by the summer, we will have all 14 operational in the fleet. The new 8 are planned to be delivered in '22 and '23, basically 1 per quarter, so 4 in '22 and 4 in '23.In terms of financing, we have baked it into the around EUR 9.5 billion for the cumulative CapEx guidance 2020 to '22. We don't expect anything beyond that. Because in terms of financing, we actually plan for some flexible financing structures, which we already used for the last -- of the first 14 batch, which means that only a portion of the overall amount will actually be booked as CapEx and be due immediately. So we will do some type of leasing construction, which will face the cash out over the next couple of years. And that is already included in the guidance we have now given for CapEx. And we will, of course, consider it fully in our new guidance for '21 and the new midterm period.Second question on supply chain in terms of one-off effects. So there were no one-off effects in the fourth quarter of 2020. We still had some restructuring cost of change in the fourth quarter of 2019. But there was nothing now in 2020. So we have indeed really seen a bit of a comeback. We didn't have any significant site closures anymore in the fourth quarter of 2020, and volume activities were beginning to move in the right direction. And of course, for supply chain in '21, for some quarters, we will work against a very low comparison base, so that should give some opportunity for year-over-year improvement in supply chain.In terms of Q1, what do we see in terms of trading, particularly for kind of like Parcel and eComm volumes? Obviously, we see a continuation of stronger volume that we would have normally expected in the first weeks of January. So it looks like a continued strong start into the year, but it's too early to quantify it and give any more details on the costs yet.
Can I just quickly follow up? In the EUR 9.5 billion cumulative CapEx that's for the new 777s like what, just a couple of hundreds of millions that you have baked in for these new aircraft?
Yes. So I think -- I mean, again, we are kind of like working all the detailed financing constructions. But if you take an order of magnitude of around EUR 300 million, I think that would be a good ballpark figure and that is, of course, included in the EUR 9.5 billion.
The next question is from Sam Bland with JPMorgan.
I have 2 questions, please. The first one is on the Freight Forwarding division. I think EBIT was down slightly year-on-year. Just wondering why that is. I think it was up quite materially year-on-year in Q3. I guess volumes are probably a little bit better. And I think unit margins have been fairly stable, but any commentary there would be helpful.And the second question is on the mail volumes within P&P. I think the statement says, down 7%. I just wonder if you could clarify whether that's sort of just mail communications or whether it's mail communications and dialogue marketing? And just some commentary on what both of those lines are doing would be helpful.
Okay. So I mean on the DGF, yes. So I mean, indeed, looking at the fact there is a revenue growth of 14% and EBIT has essentially flipped that looks a bit weak. It's in line with what we had expected internally for the fourth quarter. I mean volumes are obviously still impacted by the state of the global economy. Given that this is a B2B division, we don't have the e-comm boost, and obviously, rates have come down from the abnormal levels we had seen in Q2 and over the summer, with low volumes, getting good productivities, et cetera, it's always difficult. But from what I've seen so far, there's nothing materially concerning. So I think it's, for me, in line with what we had expected given the overall state of the economy. And we will give you more details on GP and so on, on March 9.In terms of mail volumes, the 7%, that's the postal volume. So kind of like the number we always give you as opposed to volume in our regular presentations, so it's combined. And of course, minus 7% is still worse than our long-term average, but it's a bit of an improvement compared to what we had seen in the second and third quarter.
The next question is from Andre Mulder of Kepler.
Two questions for both Parcel Germany. Firstly, looking at the other postal operators. So they seem to have had big problems in handling very high volumes. Did you experience anything of that resulting in, let's say, excess costs and the pressure on margins? Same on the mail side, with some upgrades have been a sort of research of cards. Did you see that? Has that had an impact on Q4 numbers, which were the decline is slightly smaller than in Q3? Or was it really in direct marketing?
So I'm not sure I totally got the question, but I'll try to answer and then you tell me because I [ don't ] have the right question. So I think, first of all, in terms of did we have any stress in the system, I mean, obviously, yes, it was the most extreme peak we ever had. But the system didn't break. And the colleagues in the P&P division did an outstanding job in really keeping operations running without any major hiccups. So it was overall relatively well balanced.I think what clearly helped was the continuation of some of the stuff we have been doing throughout the year, sorting the smaller parcels in the letter sorting centers, giving the bulky stuff to the freight division. We did some sorting on behalf of P&P. So the utilization was overall good. And I mean, of course, absolute costs were up. But in terms of cost efficiency, it works very smoothly.On the mail volumes, so I mean, we are now just doing the initial analysis on what is really driving it. How much is dialogue marketing, mail communication? On March 9, we will give you the specific breakdown from all I've seen so far, there has been nothing extraordinary.
The next question is from Muneeba Kayani of Bank of America.
On cash return, with a strong free cash flow, how should we be thinking about cash return to shareholders? I know you have your normal dividend policy. Can we expect anything on top of that in terms of a special dividend or a share buyback? That's the first question.And then secondly, can you share progress on the price discussions on the rate increases for both the Express and the Parcels business so far?
So with regard to cash returns, I mean, we have a very clear finance policy. Talking, first of all, about the regular dividend, there's a 40% to 60% payout corridor where we now will finalize the net profit number for the year then take a decision on the regular dividend. And we also have the element in there that if we generate excess liquidity, we will think about the right means to share that with our shareholders at the right point in time.We are very aware of that statement. And obviously, the EUR 2.5 billion is a good foundation. But there is nothing to be announced and decided today. In terms of the second question, I didn't fully understand it. Looking at margins error? Can you rephrase the question?
I didn't quite understand it. Maybe you can -- can you repeat the second part of the question?
Maybe -- I understood it. We have already agreed on a contract. So we will have 3% salary increase January 1 this year. And what was the number for next year, 2%, I think. So that is agreed. That was agreed [indiscernible]
I'm actually asking on the price increases, the -- is that all concluded at this point? The rate increase discussions.
The rate increase, yes. Sorry, we understood wage. And so the wage thing is fixed until the end of '22. And so on the rates and what we said is towards private customers, we're not going to change prices for Parcel Germany. But of course, for the larger customers, that is by now an ongoing process. We have our annual GPI process like in Express where the communication is out.So I would say this is all kind of like a business as usual there, fortunately, I think we now also have in Parcel Germany, a very good and healthy routine, and we will continue putting out price increases, obviously.
[Operator Instructions] And the next question is from Johannes Braun of Stifel Europe.
Just 3, actually. Firstly, on the B2B in Express, you said you expect ongoing gradual recovery here. But the question would be, yes, has B2B volumes continue to grow so far in Q1 this year? Or did it stop on the renewed lockdowns?And similar question regarding supply chain. Do you expect the negative effect given the new lockdowns as we have seen during the first lockdown in April last year? And then lastly, there was a couple of news flow regarding the German letter price regulation with, I think, the administrative court in Cologne decided that the 2019 stamp price increase was unlawful. I do understand that this does not change anything immediately, but just some thoughts on that. And on the revision of letter price regulation and what it all means for future price increases.
Maybe on both. So what definitely is happening at the moment is that consumers are behaving differently from the first lockdown. They not have not stopped completely to buy cards or whatever. And I think that will continue in the same way. People have learned now that they live with COVID-19, we have lockdowns, but they don't have to do nothing. Certain sectors definitely have seen boom in things like furniture and e-bikes and all this kind of stuff. So we don't see any reason why that should change, and that should give with some catch-up anyway, some good development on B2B, and we see that already with the constraints of sea freight capacity out of Asia somehow. So the lockdowns probably will not lead in the same way as they have done then the first lockdown to shutdowns of supply chain, but it's too early to judge it completely. But as I said, B2B will definitely not as weak as it was last year in the lockdown.Regarding letter prices, other regulation is more about technicality because the prices are still in place. What the highest court in Germany said is that they think the application was not covered fully by the post law. The government is now set to change that. That's on its way. We have still approved our stamp price until end of 2021. This year, it would be the year anyway that we start the regulator to talk about prices next year. As I said, the government has had on their pipeline. They said very publicly. So we have to see if that's -- when is that happening. And then, of course, the process will start to look into what the new law, which will be based on what has been applied so far. That's at least our understanding.What that means going forward is very much dependent, of course, as in the past, on volume developments of last year. This year, all this kind of stuff. So it's too early to predict what that means for the postage. But as I said, none of the courts have said that the price is wrong. It just said that the application was not right and not backed by the post law, and that needs to be fixed and the government is doing that at the moment.
But is it correct that we need the revised post law pretty soon to -- for you to have a clear base for the 2022 price increase?
Yes. So of course, the key thing is we will get an election year -- or we are in an election year. Therefore, it has to happen in the next month because the period is over. And as always, if a new government comes in, there is a certain period where no legislation takes place. So and they know as well that the current stamp price is only approved until the end of this year, and therefore, they understand that it has to happen in the next weeks because that has to be then the basis for the next regulation.
[Operator Instructions] And we have a follow-up question from Adrian Pehl of Commerzbank.
Actually, I've got 2 quick ones, I think. First of all, as results are better, and obviously, you might be consuming some of the remaining tax advantages that you have, obviously, ending the year with the upper end kind of tax rate. How should we think of it going forward? Because probably there are 2 factors, I would presume. One is actually a faster consumption of potential remaining tax benefits that you have. And on the other hand, however, given that Express is growing quite nicely in some jurisdictions, you should have quite low tax rate. So any kind of insight on that?And second, as obviously, we are now in the process of the first vaccines having been shipped out to the countries. Is it actually -- would you stick to your previous statements that you don't think there are any kind of bottlenecks, obviously, on your end, but rather production is the big issues? Or what are your -- maybe you could share some experiences that you had already in the first weeks of shipping the vaccines and what do you think going forward.
Yes. Let me start with a second before Melanie answers the first. So we will not see any issues with the logistics on a global scale. Our industry, we, in particular, were prepared to deal with these kind of volumes. And then we should not worry about that. The question is always more, what happens between the warehouse, the doctor and the patient. And that is working in some countries better. But I think governments and authorities will go through with steep learn curve as well. And therefore, we will see a significant acceleration.So I'm very optimistic than in some of the world would look already at the COVID-19 in a very different way. The production is streaming up. That's the strength of market economics. There are many people who see the opportunity. And that's the reason why they start producing more and more and look into [indiscernible] BioNTech just announced with Pfizer that they now want to produce 2 billion. And this is exactly what happens. The market dynamics are great. And of course, we are looking as well, it doesn't change the picture for us. It will be a cream on the cake somehow, but nothing else from the volume perspective and from the profit and all this kind of revenue. But it's -- we were well prepared, and we have deep interest that this gets rolled out because we need to get back to normal. And since we have many opportunities in the normal world as well, we don't -- I think the limitation is in the production, but it's -- I think it's increasing day by day, quite a bit, and that's the reason why I think we can look positively forward.
Yes. So on the tax rate, that's, of course, was quite early on in the year, and we will give more details both on what happens to the tax rate 2020 and also on the outlook on March 9. I think directionally, we still have significant tax losses in some jurisdictions, particularly in the U.S. So if the business perspective for our U.S. entities improve, we still have opportunity to activate tax losses there. But directionally, we expect the tax rates to continue to go up like what we have talked about for quite some time now.
Fantastic. Operator, I understand there no further questions out there, right? And therefore, I would like to finish the call with Frank's closing remarks and looking forward to talking to you later.
Yes. Thank you for joining us this morning. We had a great year, 2020. Our organization was really high energy, very agile, adaptive to whatever happened and has really delivered a great number. So I think, as I said, I -- or we feel as an organization, very proud that we really have delivered what we have promised a long time ago. We have a very clear plan going forward with our strategy 2025. We have strengthened the financial muscle to execute that swiftly, and that's the reason why we are optimistic going forward.And of course, we understand as well that there is shareholder demand as well, but that's for later. But overall, I think we are really have strengthened our portfolio through the crisis. We are more aligned as a senior team as well at the same time than ever before. And that makes us all very positive and forward-looking, very optimistic. And with that, thank you very much and see you then next time, I think, on the 9th of March. Thank you. Bye-bye.