DHL said that it remains satisfied with the performance of its Supply Chain subsidiary, despite a 23% year-on-year fall in turnover caused in part by a change in the way its NHS Supply Chain contract reports revenue.

For the year-ending 31 December 2016 turnover at DHL Supply Chain fell from £4.01bn to £3.09bn, while pre-tax profit fell from £108.1m in 2015 to £99.4m in 2016.

The business continues to renew consumer and retail contracts formerly reported in its Exel UK and Tradeteam divisions in DHL Supply Chain where possible.

Turnover in Exel UK dropped from £129.3m to £47.4m in the same trading period, with pre-tax profit rising to £1.6m from £521,000; while Tradeteam saw turnover fall from £118m to £106.4m with pre-tax profit falling from £2.7m to £441,000.

Speaking to MT in April, DHL Supply Chain chief executive Paul Dyer said of the evolution of the business: "A year from now you will see a one-team approach, so we can start harnessing some of our scale and expertise and have a fantastic offering against the competition.” 

NHS Supply Chain

DHL re-signed its NHS Supply Chain contract for three years in 2015

Explaining the drop in turnover at DHL Supply Chain, the company said that following the October 2015 renewal of its NHS Supply Chain contract until October 2018 new terms regarding the provision of procurement services had been introduced – resulting in a change of treatment of revenue for such activities.

Previously the company had acted as a principal, and now acts as an agent. This means that the revenue and costs of such purchases and sales are no longer shown as turnover for the business and only the management fee is recognised.

Accounting for this change in reported turnover DHL said that Supply Chain had shown underlying turnover growth of 4% during the financial year.

This year it has signed contracts with Next, Nisa, and BMW among others.

DivisionYear-endingTurnover (£)Pre-tax-profit (£)Employees
DHL Supply Chain31/12/20163,086,252,00099,414,000
Exel UK31/12/201647,397,0001,638,00039,952*
DHL International (UK)31/12/2016795,670,00015,066,0003,983
UK Mail9 months to 31/12/2016356,087,0007,605,0002,786
Total (including UK Mail)4,391,856,000124,164,00048,381

*Staff at DHL Supply Chain as employed by DHL Services

DHL Southern Hub

The Heathrow-based Southern hub for DHL Express opened in March 2017.

Meanwhile DHL International (UK) – which trades as DHL Express – saw turnover rise 11.9% to £795.7m, from £711.1m in 2015.

Pre-tax profit fell slightly to £15m from £15.8m, which DHL saying that this was primarily a result of “servicing significantly increasing shipment volumes, as well as increased operational costs and depreciation charges due to infrastructure investment”.

In March DHL Express opened it 150,000ft2 UK headquarters and southern hub near Heathrow airport.

While Deutsche Post DHL’s £242.7m purchase of UK Mail in December 2016 has been completed, it is yet to align its reporting year with that of other DHL subsidiaries.