Chief Future Officer: Melanie Kreis, DPDHL Group

what our people are doing, it's quite complex. Businesses and consumers are suddenly thinking a lot more about how things they need reach places where they're needed. It's thrust the sector into the spotlight. Logistics and supply chain has become a household name. It's dramatically different than pre pandemic. Yes, it's grown, whether that's in market, revenue, profitability, investor in

the dress. For Deutsche Post DHL Group, that's created opportunity to build on momentum and set ambitious goals for service and performance. When you look at our footprint, we're the most international logistics company there is. We want to become more digital and we want to be much more sustainable than we have been. D p d h l's revenue has sword since twenty with full year profit nearly doubling

in one CFO. Melanie christ is a key leader of the team that's delivered these results, and she views her role as much more than just a number corruption. There are, unfortunately these cliches that finance is boring and it's kind of like been counting in the back office would be successful in finance. I mean, you have to have the financial expertise, right, but you also have to be credible business leaders in order to really impact the business and

steer the direction. She is extremely smart and bright. You need somebody who is able to digest a lot of information that rapidly and can distinguish it's important what's less important. She has tremendous skill in that, and she's not afraid to cool people out to call out other members of the executive team. If she feels that something isn't being

she does it in a very nice way. Actually, she helps me tremendously in straining the company because she is highly regarded by my other colleagues in the senior team, and typically if they have a problem, they share shared first with her before they come to me. When I think about the conversations I have with Frank. The shortest part is actually about the analysis and the facts. Um, it's more the debate about okay. On that basis, what

are the options? What can we do? My role is essentially saying, in three sentences, what is working well in this company, where do we have challenges and what to do going forward. M Deutsche Post DHL Group consists of five divisions, Express Germany's post and parcel service, Global forwarding and freight, supply chain and e commerce solutions. Each of these segments has seen revenue growth in the last four years, while the surge of e commerce volume during the pandemic

has had a direct impact on the trajectory. If you see e commerce as a very structural and fundamental growth driver for us as a company, what we now saw under the pandemic was a structural acceleration. It took us forward to a point in terms of e compenetration which we probably would have reached un enormal circumstances in three years time, So it was a big step forward. D P d h L was well prepared to take this step.

The company's strategic plan recognized e commerce as a growing trend in the logistics landscape, but no one could have forecast the speed and breadth of the transformation when we are now seeing that also under the pandemic, not only domestic e commerce has taken a faster growth trajectories than anticipated, but also cross border e commerce um and we see that very clearly in our express network but also in our e con Solutions division. What are the other big

structural shifts that you see on the horizon? Is it e commerce B two B? Is it increased trade as globalization restructures? What are the shifts that you're seeing The would be to be EQUALM is still at a very early stage, so we believe that there will be a huge growth opportunity there and we also see that when

we're talking to our customers now. I guess everybody has been now realized that being dependent on just one supplier in one province in one country is probably not a good idea, so they want to build more resilience into the supply chain. I think our international footprint, our global strength, is really something we can leverage for the benefit of our customers. Another factor in the company's favor is its balance sheet. Since Melanie christ became se FO cash flow

has improved significantly. One of my priorities over the last year's has been to really focus the whole organization on better cash generation. It's not just a finance job. Making sure that ultimately revenue converts into ebort and into cash in the bank account is the responsibility of the whole organization. She says, you know, we we can't be successful as a company if we are not collecting the cash for our services we have provided, and she has not missed

one single opportunity to talk about that. I think it's a very comfortable situation, particularly in the current environment, to have a strong balance sheet. I think in that sort of respect, I'm very conservative and I rather have a bit more on the balance sheet and a bit more a buff us spell out for us what the priorities are, the longer term priorities in terms of putting some of that cash to use for you. The first priority here

is organic growth. He clearly indicated also with our capex budget twelve billion for the next three years, that we will keep investing into organic growth. We are very focused on our regular dividend payment and then if there is something left, which is fortunately the case at the moment, we will think about in organic opportunities and we will also think about other means to allow our shoulders to participate. That is why we're currently running a two billion euros

share by back program. In Organic opportunities include M and A like the recent purchase of beverage shipper Hiller brand, but deploying cash is always subject to careful consideration. Does Melanie ever turn around and say no when you're pushing through or pushing for a particular package of spending. Yes, she does it quite often, you know, because she has she You know, she is a person, and that's great if you have a CFO or who is risk of

prose because you need somebody. You know. The business is always too optimistic. Melanie might be something too pessimistic, but that's a very healthy discussion. If we've the jointly come to the same conclusion after a debate, then we are probably in the right spot. How often do you find yourself saying no to divisional heads? So when I kind of like was promoted into the C of all position, my team gave me a stamp, was kind of like rejected.

It sits on my desk. I think the fact that people know it sits there already has instilled quite a lot of discipline in the organization. UM, so I think UM when I get a proposal, it has also gone already gone through a number of iterations UM and is normally of such a high quality that I don't need to rejected a stamp too often for the time being. Christ should be able to keep that stamp in a draw.

CEO Frank Cappelle has expressed a commitment to service quality and confidence that customers will accept higher prices that come with it. If you are too expensive, you will be out of business, But if you don't provide the right quality, you will be out of business. So we want to be We will never be the cheapest in town. That's not will be the premium provider. That's all the strategy. Of course, it's also more challenging for us than our

customers are under pressure. At the same time, I think over all the last two years have shown that reliable, high quality supply chain comes at a certain price. Tech I definitely see that inflation is having a huge impact on the logistics industry, and there's been substantial price increases in the last few years. I do not see that changing. There's a lot of innovation happening. Uh, and I don't see the inflation necessarily going away. It might level out

a bit, but it's not going to go away. Logistics companies may have pricing power with customers, but their stock prices haven't been so robust. I think that the issue there is the increase in interest rates has made everyone rethink and we can turned about the level of inventory that is out um you know, in the system, if you will, and with the level of disruption. I think what's happened more in the lasts is it more of a view that we're actually not heading into certainly an

you can't slowdown maybe a recession. With more than half its revenue coming from Europe, investors may see dp d h L as more exposed to recession risk than its global peers. The company insists it can meet its revenue targets in the event of a downturn. It's counting on diversification as a cushion. I'm not so pessimistic that the that there is really a deep recession at our doorsteps. So but even then, you know, our portfolio is very

much balanced. You know, we are everywhere in the world of the world will not go entirely in the recession A doubt that would it be a stretch to suggest that DP d h L is to some extent recession proof. I wouldn't go as as to say recession proof, but I think we are very well positioned to deal with all different types of recessions in every scenarios due to the breadth of the portfolio. The balance also portfolio really gives us a lot of resilience against any type of headwind.

As the chief financial officer of one of the world's largest logistics companies, Melanie Christ has made her mark in global business. That's not what she originally attended to do. I really wanted to go into research. I wanted to become a physicist, and that was where my passion was. But then during my studies, UM some friends of mine started doing this strange thing. They went into management consulting. I didn't even know how to spell it, and I had no idea what it was about, but what they

told me was quite interesting. Um and UM. So I ended up doing an internship with a consulting firm, and I learned more in the two months there than I had in the last two years in my physics job at university. That is how I ended up in consulting. She started her career with three years at mckensey, then spent four years in private equity with Apax Partners in London before joining Deutsche Post DHL Group into thousand and four. I was brought into the company to do international M

and A project. That was at a time around twenty years ago when we were really building the company in the current shape, acquiring lots of logistics companies around the world. The M and A part was the first thing, and I then wandered into a more mainstream finance UH field here in in the group, becoming the CFO of our DIATL Express division. So from then on it was more leading towards the CFO role. Eventually, Melanie Christ now heads

the finance team with around eleven thousand employees. Success in this role is as much an art as a science. If you do the greatest piece of analysis and you see it all and you know it all, but you can't convey that message and you can't convince the rest of the organization that we should move into a certain direction, it's useless. DP d h L is sending a consistent message with its investments. The company spent a hundred twenty three million euros to upgrade its logistics center at the

Clone Bonn Airport, designing it around key strategic goals. Well, I love about this building is it actually shows them the big mega trends which formed our strategy which was inaugurated in tween this building opened. So globalization, connecting the worlds e commerce. We have a lot of sortation facilities here for smaller e commerce shipments. Sustainability, it's a very sustainable building that solar panels on the room and everything, and digitalization and well you can obviously see that it

is quite automated. How did the team pitch this investment to you initially and how hard was it as a cell for them? How quickly did you turn around say yes, this is worth a hundred twenty three million euros. Of course, you always have to make sure that you have the right capacity for the growth in the network. And at that time they came and said, hey, we will really see a strong growth in new commerce volumes on top of the regular B two B growth. We need more

sorting capacity, we need this building. And of course they always debates doesn't really have to coast under twenties three million euros and so on. But fortunately they convinced us because then with Corvid and the volumes hurt who urgently needed the capacity. At the same time as COVID accelerated demand for logistics services, disruptions in the labor supply hurt. Productivity advances and technology like this digital sort have helped

offset some pressures. But automation also raises questions. Does this tell us that there's the business grows, this is gonna become a more automated business, that there's going to be less need for labor for workers. Well, you still see people here, and I think what you can nicely sportins here is the combination of technology which supports people. So for examply, when you look it's a customs area. It used to be a very manual and sometimes confusing process.

Now the people are supported in picking the right hipments for customs inspections by light and they are automatically sorted in this sort of to go to customers expections. So it is also having the people. Um, it was the

job they're doing here every day. We all a said, you know in two thousand, nineteen twenty, you know we might get one third less jobs in the current set up until twenty thirty if we digitalized for your organization, But we are very sure that our company will be at least fifty maybe hundred percent bigger, and we will have more jobs to offer than at the beginning of a couple of years ago when we started their journey, people said, oh, you know, I might lose one job.

I haven't heard that in the last two years as a question in any town hall. This airport have also showcases dp DHLS aviation fleet, which both more than three hundred twenty dedicated cargo aircraft. We all in the biggest tone of our aircraft, but we also have short and medium and long term nieces and with the growth in our business, we anticipate that the people keep growing. And you've talked about investing, of course in sustainable fuel. Yes,

when does that, when does that come online? How significant is it? Is it just the critics might say that's just window dressing around a part of the business that is of course very very carbon intensive, at least a lot of emissions. Yeah, so you absolutely right. The problem with our beautiful aircraft is the CEO two emissions and when you look at our overall, it's U two emissions to thirds up from aviation. It is about flying these birds with more sustainable fuel, and we said that we

are really willing to spend billions on it. We now really hope that we will see the uptick in supply over the next year's spending billions isn't vague hyperbole. The company has pledged to put seven billion euros towards sustainable technologies and fuels by thirty with the goal of climate neutral logistics by twenty fifty. Just inability makes good business sense anyway, especially if you are in a business that

is energy or fuel hungry. As a compliance element that not just operators in the logistics sector need to consider but also their customers, so being transparent becomes part of the service about their impact on the globe. We had a lengthy discussion should we make financial commitment how much we want to invest for the next decade in our sustainability and we had a long debate is it right

to say we want to invest seven billion? Until there were pros and cons But that was a very intense discussion Melanie and I had where we finally came to the conclusion that this is a right number. This is a right approach. We convinced our colleague, and that's the reason why we are where we are. Where we are seen as somebody who really commit. They're not that many companies who have quantified their future investment, which opposed DHL groups.

CFO Melanie Christ is often named to lists of the most powerful women in business, and while men still out number women as finance heads of large companies, there are signs that the balance is shifting. The number of female CFOs across major US companies has risen to an all time high. According to a study by Chris Colder Associates and executive search firm Cohen Partners reports that thirty six percent of new CFOs hired by notable companies in the

first half of two were women. I asked Melanie Christ if she's encountered obstacles as a woman rising through the executive ranks. I have to say, UM, I have not made many negative experiences. UM. Maybe I was also a little bit even not thinking about these challenges so much so. I mean, when I studied physics, there weren't many women, so I was somehow always used to it. And it can also be an advantage when you're kind of like

the only girl in the room. I mean the boss at the end remembers your name and not the nineteen guys who all kind of like we're dark suits and white shirts and look alike. Right. So, UM. I never experienced it um as a yeah, external stress factor. I have to say for me personally, it was more balancing my own UM expectations around kind of like getting family

and the job combined. UM. But that was probably more of a pressure I put on myself, thinking that I had to be perfect in every dimension, and not something where the pressure was put on me from my male colleagues. So how do you take that experience and put it to play in terms of how you advance the role of women in this organization. I think the great thing is that now across the board in finance, but also in the group overall, we have role marvels which show

young female talent that everything is possible. In finance, we have a share of women in management of thirty um, so we are ahead of the group. We want to get to thirty five percent by five I think they are not a position. If you have a vacancy. I want to have at least one woman on the short list because we have enough female talent, so every short list should contain a woman, and then the best person

in the race should win. CEO Frank Capelle says Christ sets an example for the entire organization and he believes her success may influence the entire industry. She has proven that she is an outstanding CEFO and she's definitely a wrong one in many dimensions that you you know what I like about there? She is still, you know, a very warm and nice person and that makes such a big difference, so you can get to that level without

compromising on how nice you are as a person. I think she's a great wrong one and I hope that this has had positive impact for many of us from the big picture down to the smallest operational details. Melanie Gryce is fully engaged in guiding dp DHL to the future. I wanted to know what she sees when she looks ahead. What do you see is the biggest opportunities for d

P d H L over the next ten years. I think we have a fantastic portfolio and we just have to leverage the growth opportunities which are there both on the equam side um and also on the traditional B two B side, and the key differentiators for us will be digitalization, sustainability and our great people. As you look ahead ten years, what are some of the challenges what keeps you up at night as you think about the

business going forward. I think we have to keep this focus and the ability to adjust in a very agile way. Sometimes when you kind of like think about all the risk controlling and stuff, people tend to create the impression that you can pre plan everything. That's clearly not the case. So I think we have to stay focused and keep the ability to react in a very edgile way. But looking at what happened over the last twenty four months, I'm very optimistic that we will also be able to

cope with whatever happens next. And how do you see your role changing in the years ahead. I think it is changing at a very rapid pace, which is a great thing because it never gets boring. Um, those elements I just mentioned for the group overall, digitalization and sustainability are also hugely irrelevant for the finance role. It's like a new language you have to learn, and you learn the vocabulary, but then you also have to develop a feeling.

If I kind of like, put so much capital into this de carbonization measure, I get so much in terms of return out of it. But that's a fascinating opportunity where we can make a huge difference for finance and for the group overall. As you look to the future, Melanie, what do you think is going to be the skill sets, the knowledge basis They're going to be essential to the

success of future CFOs. Guess probably the two most essential new skills will be to get even better at lifelong learning, because we will have to learn so much new stuff every year, be it in the digitalization area, be it on sustainability. So this ability also as a fifty year plus old person to keep learning and keep the curiosity, I think that is going to be super essential. And the second element will be being a great team player.

The world is complex, you can't know it all, so you really have to work even more strongly with your team. What advice would you give to someone who has just recently been appointed CFO. That's a great question. I think I would probably simply say, be curious and ask as many questions as you can, try to learn as much as possible, not only in the finance area, but get

close to the business. Try to really understand the business, because only when you are close to the business and you understand the fundamental profit drivers will you'll be a really great, fearful I'm Tom Mackenzie. This is Bloomberg foot