Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome and thank you for joining Deutsche Post Conference Call. Throughout today's recorded presentation, all participants will be in a listen only mode. I would now like to turn the conference over to Martin Ziegenberg, Head of IR.
Please go ahead.
Thank you. Good morning and a warm welcome to everyone out there at to our scheduled Q2 2020 reporting call. As you've seen in the invite, Garton Melanie, our group CFO, with us who will take you through the presentation, which I take it you have in front of you. And after that, there will be time for Q and A. So the usual procedure, Melanie, over to you.
Yeah. Thank you, Martin, and good morning, everybody. Welcome also from my side to our Q2 call. As you know, we pre released our Q2 numbers in early July. I think the first important message is that in the second quarter, our group EBIT was back to growth.
And I think what is extremely pleasing and you will see that in the remainder of the presentation all 5 operating divisions had a positive EBIT and actually 4 out of 5 divisions showed year over year EBIT growth. The second positive message is that cash flow development has been very strong in the second quarter, but overall, for the first half, of the year 2020. For me, this is both a confirmation of the fundamentally sound operating performance in our divisions. But it's also the result of our strong internal focus on improved cash generation. So obviously, it has been quite a dynamic development in the last month.
And in the beginning of the pandemic, our focus had been very much on preserving liquidity keeping us in a super safe balance sheet position. In early July, based on the good performance we have seen in the second quarter, We had a discussion in the corporate board to reassess our cash allocation. And as you will have seen on that basis, we first of all took the decisions to reward our employees with a bonus for their exceptional efforts, as throughout the last month. And we also scheduled a date for our AGM and or not our commitment to dividend continuity with a proposal of a 1.15 dividends to the ATM. So I guess overall, so far, we have gone through this plex morning event quite successfully.
And I would say that our investment case, which you can see on Page 3, is fully intact. The first element of our investment case is sustainable growth from our diversified logistics portfolio. And you can see that in action on page 4. So as you can see here, we had a reported revenue growth of 3.1%. Organic growth of 4.6%.
We, of course, saw an impact of the pandemic situation, for example, in our mail volumes, and also overall in global trade related flows. But 4 out of 5 divisions, nevertheless, were able to report a solid revenue growth in the second quarter. The one division, our supply chain, where we had a revenue decline, that was driven by the fact that this non net ROC business is really impacted by lower activity levels in customers, operations, quite often, we have dedicated customer side and that of course also has an impact on our supply chain revenue development. The growth we saw across the group has also been heavily driven by e commerce. We have talked about that now for quite a long time as a structural growth driver.
And of course, that was also an important element now in the second quarter of 2020. The growth in the second quarter is also a manifest of our ability to successfully manage the very unusual market circumstances. Like for example, the tight air freight market, as well as a very quickly changing volume pattern, which we saw over the last month in Express. Let's take a look at some important volume trends. I think nothing materially new, but I would still want to talk a bit about, what we saw in P And T Express and over forwarding on the next three pages, starting with P and P on page 5.
So as previously flagged, dialogue marketing volumes were down significantly, but that was offset by the very significant growth in parcels, up 21% in the 2nd quarter. One of the positive numbers on this page here is the mail communication decline, which was minus 3%. Has held up very well. Just as a reminder, we had a change in product portfolio at the start of the year. Which led to some shift from dialogue marketing to mail communication.
We lost more on the dialogue mail volume side than what we gained on the mail location side. But of course, particularly in dialogue marketing, we also see the impact of the pandemic. You can also see the strong effect our continuous yield measures, driving higher average unit prices in both mail and parcel. The positive developments, particularly on the parcel side, are really the result of the very focused years initiatives we have been driving for the last 2 years since the summer of 2018. So that is also a very structural trend, which we're seeing here, which has been helped in the second quarter also by a very healthy customer mix, under the pandemic.
Express volumes on Page 6 show, first on the left side, the monthly pattern, which we also described earlier on, we had a very good start into the year in January. We then saw the effect of the pandemic in February in China and Asia. Early March, we were back into growth, but then of course, the lockdowns in Europe and the U. S. Taking effect in the second half of March, we turned into negative territory in March again.
April was the low point, by May, we were back into growth. And in June, we saw a very strong and healthy growth in our stress TDI volume. This growth is strongly driven by e Commerce. And just as a reminder, for our Express division is premium e commerce. You also had a very strong focus on taking the right type of e commerce into our most expensive network.
So what we always say internally e commerce, but in a profitable way. And you can also see that in the good margin development in Express. On the right side of the graph, you can see the regional split. I think nothing really surprising here in the second in the first quarter, Asia was the declining region in the second quarter, Asia, particularly driven by China, was healthily back into growth whilst for the quarter overall, we had negative numbers in Europe and the Americas are there as well. We of course saw an acceleration from growth from April towards June.
That takes me to Page 7 and the forwarding volumes, yes, and I think obviously global forwarding and particularly air rate has been the most distorted market where we saw the most unusual patterns. Volumes are down significantly. But I guess it looks compared to markets as if we still performed relatively well, particularly on the airfreight side. I think I really have to say thank you to our airfreight team here. They did an outstanding job in early on securing capacity in this extremely tight market where the name of the game in the second quarter was getting the right type of capacity at all.
And by moving swiftly and using our long standing relationships and our size advantage, we have been able to deliver strong GP uplift and that has been the main driver for our strong Q2 EBIT overall. That being said, it is also encouraging to see that GP per TEU was up in ocean freight. And also on the road trade side, our colleagues has equally managed to navigate successfully through these unusual circumstances. One very positive number, which you may have noticed, is our GP to EBIT conversion for DGF, and order of magnitude we had never achieved before. And as you know, Tim and the team are very focused on structurally improving the GP to EBIT conversion by improving our core processes.
Quarter is of course also due to the unusual circumstances and a positive outlier. Underlying trend is also going in the right direction, but Emeritus take a bit longer in an underlying way. Yes, let's take me to page 9 and the overall profitability improvement, which you can see in our P and L on Page 9. In a nutshell, based on a solid revenue increase and strong cost focus. You turn to roughly 5 percent organic revenue growth into a 19% EBIT increase which I think is a quite pleasing development.
No unexpected moves otherwise below the EBIT line. Tax is up, reflecting both higher earnings as well as an increase in the tax rate in line with our guidance for the year 2020. The bridge on page 10 is something that we already showed you in early July. We have now updated the page with our final Q2 numbers. The message ultimately remains the same as on July 7th.
If you adjust for all nonrecurring items, group EBIT was up significantly plus 26% year over year. In that number, we have included all operational COVID impacts with every month got more and more difficult to quantify them in isolation. So we're not doing that anymore. The only precise COVID induced one off number we are showing on this page is -99. Those are the extraordinary asset impairments, which in use by the lockdown measure.
So 26% overall operating EBIT growth is a very healthy result. And if you ask me, honestly, probably not the number I would have predicted at the beginning of April when VirTra or going through the low point, of the pandemic to date. Yeah. So page 11 recaps the main drivers by division. I'm not going to go through all the numbers and all the information here on the page.
That's a couple of words by division. I think in P and P, 2 things are sticking out. Under the pandemic, we have seen an acceleration of the structural shift from major parcel. It's a little bit of fast forward a state we may have achieved otherwise in maybe 3 years time. The positive news is that we have been able to operationally cope with this is acceleration in mail volume decline and the boom in parcel.
And it has obviously also worked financially And that is due to the 2nd important point to emphasize on P And P. For the last 2 years, we have made great progress in all those structural improvement programs be it the overhead cost reduction and be it the systematic unit improvement program? And that is what is really helping the strong P and P performance. The expert colleagues have once again done an excellent job in adapting the network to the quickly changing circumstances and to make sure that the extra cost we had in the network we're already also offset on the used side, where we have been able to really provide our customer us with ongoing service quality. And we have been able to give some capacity, which another kind circumstances wasn't to be taken for granted.
Global Forwarding, as already mentioned, the really great DGFF performance is dominacies driven by the strong airfreight DP development as the main driver. Supply Chain Our not network business, we appear also on the EBIT side see the impact that this business is more closely linked to activity levels of individual customers. And I think that explains why the impact of the pandemic in the second quarter has been more pronounced for supply chain. However, also here, cost focus and the devices diversified customer portfolio have been key to maintaining a positive profit contribution despite the 1,000,000 lower revenue shown earlier. And finally, last but not least, EHL E Commerce Solutions is taking full benefits of orientating its network totally towards B2C.
Our youngest division was just in the positive, despite a million asset impairment in the second quarter, which is great. And they are firmly on track towards the first positive EBIT contribution for the full year 2020. With that, I'm turning to the important topic of cash flow generation and cash usage. The Q2 cash flow statement on Page 13 shows how the EBIT performance is translating into even stronger OCF growth. Where is that coming from?
Well, in addition to the strong reported EBIT growth, this reflects the fact that a lot of the Q2 1 offs unknown cash. The asset impairments, some of the provisions for the sweet sweater restructuring costs. And we also delivered an ongoing strong working capital control, and that all leads to our OCS being up 1,000,000 year over year. In the second quarter of 2019, we saw the peak in the 777 CapEx. So I think to have an honest free cash flow year over year comparison, you have to take out the 777s and that is what we did in the last line on page 13.
And you can see that including the 777 CapEx, we actually improved our free cash flow by 1,000,000 compared to the second quarter of 2019 and overall reported a free cash flow of more than 1,000,000 in the second quarter of 2020. On page 1415, we have updated, our expectations for the major cash flow drivers in 2020. And we have also given you an indication, towards our 2022 guidance. One obvious question when you look at our guidance for the year 2020 is, why are we able to keep our free cash flow guidance at 1,000,000,000, which we also had pre COVID when we were still targeting a significantly higher EBIT. I think the first thing to bear in mind is that our EBIT guidance, was 1000000000 to 1000000000 include round about 1,000,000 in one off costs and the biggest chunk of those 1,000,000 are non cash.
So depreciation and amortization and changes in provisions. Secondly, we have seen a very strong working capital performance so far in 2020. Where we are quite confident that we should be able to hold on to at least part of that in the second half of the year. And Thirdly, whilst we have 1,000,001 off in real cash from the employee bonus, We also expect million lower CapEx than in our original guidance due to a different way of financing the 777s. You can see more details and numbers on those two pages.
And we do hope that they will be helpful to model, the free cash flow, not only for 2020, but also for the outer years towards our 2022 guidance. Let me have a quick word on the balance sheet. You can see that on Page 16, we are going to mention 2 significant movements in the second quarter. The first one also nothing new is we issued a billion in bonds in May at record low coupons. And that is obviously yes, I would say further safety buffer on liquidity.
This has led to a balance sheet extension per quarter end. And of course, it has also been one of the drivers for the step up in our cash and cash equivalents position at the year end 2019 that stood at 1,000,000,000. 30th March, 2.6 and now on the 30th June, up at 1,000,000,000. The second point I want to mention is the development in our defined benefit pension obligations. So obviously interest rates have further declined in a very extreme way in the UK.
You can see that in the lower right corner of that page. In Germany, we had a bit of the refinement in the methodology that helped to dampen the decline. But I guess the big topic is, the UK. I guess we will not be the only company to tell you that we are currently in discussions with our UK pension trustee how to address this topic, I mean, obviously that size of a decline nobody had ever seen in the UK before in a quarter. Turning to a couple of pages, which are, completely unchanged compared to July 7.
So I guess I can be rather quick on pages 18 to 20. As we basically confirm all guidance components as given in July, as well as our dividend proposal, which is a good sign of stability in our finance policy. So page 18 shows our new 2020 guidance as introduced on July 7. No change here. And, yes, I just talked about the bridge to the 1,000,000,000 free cash flow target.
Page 19 tries to kind of like put this guidance a bit into context, pointing towards the 1 offs million of one offs included in the 1,000,000 to 1,000,000,000 guidance. So if you take that out and you look at the operating performance implied by the guidance, you can see that this guidance actually implies 4% to 11% growth in 2020 towards an EBIT run rate of 4.2% to 4.5%, excluding the earlier flagged and explained one off. On page 20, 22 guidance is also fully confirmed. No changes here. And last but not least, on Page 21, I've, yes, I'm very happy that based on the good Q2 performance, we felt indeed able to schedule a date for our AGM and to fully deliver on our promise of dividend continuity by proposing a stable dividend of a euro 15 per share.
Also, under the very unusual circumstances of the year 2020. And I know every once in a while, it still comes back. So should any one of you still have 2019 2009 in mind? I hope that this eventually testifies our strong commitment to shareholder returns and our finance policy. Technically We are in the final stretches of preparing our virtual AGM for August 27th and the dividend payment is then expected on September 1st.
So to conclude, it has been a challenging and unusual year, I guess, for all of us, I think on the positive side, it has shown how mission critical logistics services are to keep the work moving. And for us as a company, it has shown how our leading and diversified propositions across the industry provide us with a resilient base for sustainable success. And that is what gives me strong confidence beyond this, second quarter. Our stable strategic logistics footprint in combination with our agility, which we have proven now in the second quarter, we really had to respond back the, to unforeseeable events and the colleagues out there has done an amazing job. And I think the fundamental basis for this success has actually what we have worked on continuously over the last years, and that is our company culture and the values.
We have had our purpose connecting people, improving lives out there for many years now. And our people across the organization have probably never felt this contribution this purpose. So real and first hand, like under the pandemic circumstances now in the second quarter. I think that shows that, also with our Strategy 2025 aspiration, we are on the right path to keep delivering sustainable performance also for the next quarter. And with that, Martin, back to you, and we are happy to take your questions.
Exactly. Thanks, Melanie. And Emma, if you will then push all the right
The first question comes from the line of Daniel Ulska with Bernstein Research. Please go ahead.
Morning, Daniel.
Daniel can't hear you. Good morning. Oh,
sorry. Good morning, everybody. Maybe first on the express pricing, that seems to be fairly benign, so it didn't really move that in the quarter, although airfreight capacity was very tight, kind of what did you see in terms of price and mix development in Express? And how should we think about that kind of in the quarter going forward as airfreight capacity likely remains fairly tight? And second, I mean, supply chain, could you comment a little bit on the different verticals in your, in your supply chain mix?
And again, how you would be thinking about those over the next couple of quarters? Seems that that's a business that really cranked down on costs and that was a big, kind of a big benefit in Q2. But I'm sure there are different developments depending on the verticals and just some guidance on how that's progressing would be helpful. And lastly, on the pensions, which you already touched on, It seems like the plan assets are proceeding nicely. But of course, there's a question around how plan assets will develop in the next, let's say, 12 24 months.
What scenarios are you considering when it comes to your pension kind of in the medium term? And is there kind of any scenario out there where you would consider funding a little bit more into the pension deficit?
Yes. So first of all, on the express pricing, so, our basic philosophy here under those circumstances as we saw in the second quarter has been that we have to find a way to special pricing to offset the extra costs we incurred in the network. And that is why We introduced an emergency surcharge in the second quarter, which we refined several times in the course of the quarter. I think really the fundamental approach here has been not to really squeeze the orange to the limit and go for the maximum yield. But to also work with our customers and to support our customers and get to a level where we are able to offset the additional costs.
In the second half of the year, we will go through our general annual GPI exercise. Those discussions are ongoing are of course influenced by the pandemic. But I think the Express team doesn't see a necessity to fundamentally change our approach here. I think this approach has been extremely successful over the last year where we saw good growth and a good margin development at the same time. In terms of the supply chain verticals, yes, indeed a mixed picture, not surprisingly, the best performance best performing sector has been Life Science And Healthcare.
We also had a positive development in part of retail, but you're that other parts of retail like fashion, which weren't doing really well. And then of course, in terms of the low light, that has been auto mobility, the whole automotive sector, I would say overall, we have now seen towards the end of the second quarter, that's across all verticals things are moving in a more positive direction. We are, for example, tracking the number of close sites there's no activity at all that has come down significantly. We are also tracking sites where the volume levels are significantly deviating from normal levels. Here, we still have a number of sites, but also the number has come down overall.
So for supply chains, we also expect a gradual recovery in the second half of the year, but obviously, given that some sectors like for example, Automotive are still not doing well. We won't come back to what we had originally planned for supply chain for the second half of the year. Yes. In terms of pensions, I mean, the one country where we have to keep a close eye on in terms of pension deficit is the UK, due to this dramatic decline in discount rates, the deficit has gone up. As I mentioned before, we are not alone in this situation and what normal happens is that you would cast a visit trustees, a multiyear approach to closing a gap.
But the UK is really the main country for us. I hope that answers your questions.
Thanks. So basically you're not worried about the German defined benefit at this point.
No. In German, we don't have a required funding level. There's no pressure from anybody. So I'm not concerned about the German situation at all.
Thanks, Daniel. And next question, I'm pleased The
next question comes from the line of David Kerstens with Jefferies. Please go ahead.
Hi, good morning everybody. Two questions, please. First of all, on your TDI volumes in DHL Express, I was wondering if you could give a split between the growth in or the decline maybe in B2B and the growth offsetting in B2C. I think some of your peers had that seen an earlier recovery than June. I was wondering how strong was the recovery that you experienced in June in TDI volume.
Then secondly, on the airfreight market, you seem to have gained substantial market share and still managed to increase the yield by far the strongest in the sector. I was wondering what's driving that substantial gain in market share? Is it the access to capacity? Partly facilitated by DHL Express. So more color on that would be very, very useful.
Yes, thank you. So two good questions. I mean, first of all, on the TDI volumes, I think the comparison with peers is always a bit difficult and I think under the current circumstances even more so given that our peers have a much stronger exposure to the Transpacific Lane, while our portfolio is really globally more balanced, So when we look at what we saw on the Trans Pacific, that is much more in line with what our competitors reported In terms of B2B, B2C, so I would say B2B also recovered in the course of the second quarter compared to the low point in April, but is still negatively impacted to what end of the quarter. So the strong growth driver for this significant growth in June has been B2C. Again, what is pleasing for me is, that, and this is what we consistently showed over the last years, we are able to get the right type of B2C in our Express network.
So the Express margin was really good now in the second quarter. Even with this a different mix compared to enormous circumstances. On the airfreight side, I think it's a combination of factors. The good working relationship between Global Forwarding And Express was clearly helpful. But overall, our effort colleagues did an outstanding job in securing capacity early on.
And of course, we were also able to leverage our long standing carrier relationships and our sheer size because the name of the game in airfreight in the second quarter was securing capacity. And I think we have been obviously quite successful in doing that for our customers. Thank you.
Thanks David and on to the next participant please.
The next question comes from the line of Sam Bland with JP Morgan. Please go ahead.
Good morning. I've got two questions, please. The first one was maybe a little bit more color on P and P and specifically what you're seeing in Dialog Marketing And Parcels as economies open up and shops start reopening. And the second question was on cargo wise. I know the statement mentioned some good progress on rolling out cargo wise.
How do you think you'll see the eventual kind of efficiency improvements come through? Do you think you'll see a big some kind of cost savings program to rationalize on the headcount or does it take account of that efficiency or what do you think headcount stays the same and you scroll into the higher volume?
Yes. So first of all, on the P and P development, yes, I mean, like what we saw with the lockdown was a dramatic drop in dialogue, marketing volumes, I guess not surprisingly. Here we have seen a bit of a recovery now on the shops opening up. Overall, the decline rate is still stronger than what we would have expected under normal circumstances. But it has improved compared to the low points.
On the parcel side, we far the strongest peak in growth in April. And at this point in time, we are still the growth level, which is significantly higher than what we had assumed in our internal plans at the beginning of the year. So it is still very healthy growth on the parcel side, but also in an operationally manageable way. In terms of CargoWise rollout, yes, thank you for that question because unnoticed and relatively surprisingly undeterred from the pandemic circumstances. We have been able to continue with the rollout.
We have a bit of a delay but nothing material in the greatest scheme of things. And so the CargoWise rollout is progressing. The colleagues have found ways to do lots of the training, which had normally happened physically now in an online format. And on that basis, we are also sticking to our plan for over time improve the GP to EBIT conversion on the back of the of the CargoWise rollout. I mean, at the moment, we are still obviously far away from volume growth in Air And Ocean, but over time, the anticipation is that we will grow into the freed up capacities.
Think that's really something we now have to see in the second half of the year, depending how both air and ocean develop on the demand side.
Thanks very much.
Thank you, Thaselle. And the next caller will please.
The next question is from the line of Christian Liddelta with UBS. Please go ahead.
Hi, thank you very much for taking my questions. Maybe firstly in Express, how should we think about Express margins going forward into Q3? Is it fair to assume that there should be upwards pressure as volumes are picking up and as the load factors improve sequentially. Secondly, in Parcel Germany, you give us a bit more color? What is happening with Amazon volumes versus your expectations at the beginning of the year?
And secondly, in Parcel Germany, looking at this pricemix in Q2 of 6.5% or so, Could you elaborate a little bit how much is due to yields? How much is due to the actual customer mix I'm just trying to think, what could be sustainable in the second half of the year?
Yes. So, I mean, on the express margins, we obviously saw now in the second half of the 2nd quarter, how good it is for a fixed cost network when volumes are coming back? And if that trend now continues in the 3rd quarter and growth levels have been quite healthy also in July, and that should be quite helpful for the express profitability overall. I'm sorry. So it's almost textbook volume coming back into a network business.
With regard to parcel Germany and Amazon, I mean, we had said at the beginning of the year that we expect continued insourcing from Amazon and that this will lead to a reduced exposure. With regard to the Amazon share, and that is what we see happening now in the second quarter. So Amazon in sourcing continues. But I think also on the positive side, we see such a strong and broad based growth across many, many customers that it's really a very healthy development on the mix side, which takes me to the second part of your part of your question. When you look at what we have now shown consistently over the last quarters, we always had a good spread between volume and revenue growth in parcel.
The pricing measures are still giving us a solid tailwind here. In the second quarter that was complemented also by a very good structural development.
Very
much. Comes from the line of Maniva Kayani with Bank of America. Please go ahead. Hi, two questions from me. On parcels in Germany, given the strong volumes that you've seen, how are you thinking about capacity and do you see need for investments to increase your capacity there?
And then secondly, on the forwarding side, how should we be thinking about Unit G in the second half of the year, as the air freight market somewhat normalizes?
Yes. Two good questions. So first of all, on the parcel capacity side, I think what really helped us enormously here was the structural work we had done on making also better utilization of freed up capacities on the letter side. So for example, using letter sorting centers for small tarpers that I think without that, we would have really struggled operationally. So as I mentioned before, it's a bit of a path forward to a situation, we would have seen this normal development probably in 2 to 3 years' time.
Which brings me to the capacity question, we, of course, will have to continue investing into our parcel network, but that is we had included in our regular CapEx plans. So, I don't see any dramatic news bikes now due to what we saw in the second quarter. In terms of GP per unit in forwarding, That's a very good question. I think what we clearly expect is that the supply side will continue to be distorted in the second half of the year. I guess nobody is anticipating a significant increase in interconnect air capacity in the short term.
So the supply side of the airfreight market will continue to be distorted. I think the difficult question is how quickly, and on what trade lanes will demand actually come back. And I think that is going to drive the overall profitability dynamic in the second half of the year. What we have seen now in July was a bit of a continuation of the second quarter trends but it's really very difficult to predict how long this distorted situation is going to last. We really have to say this month by month.
Thank you.
Thanks, Miliva. And I think there's one call is still in the queue.
The next question comes from the line of Mark McVicar with Barclays. Please go ahead.
Yes, good morning. Two questions, slightly off the normal big track. On the asset impairments. Can you say a little more about what sorts of sites or assets you've had to impair And what gives you such certainty that the value won't return all those assets won't become usable again is the first question. And then 2nd question.
Could you elaborate a little bit on the alternative 777 financing? If it's not on the balance sheet, it's not an operating lease. What sort of structure are you using? And is it possible that as much as the balance of the of the order will end up being financed that way and therefore out of CapEx? Thank you.
Yes. So two new questions indeed. Thank you, Mark. So first of all, on the asset impairments, there are 2 big elements in the 1,000,000 The first one is 1,000,000 in supply chain, which is an asset impairment on our top drink delivery business in the UK, where obviously this pops being closed, we had a material impact to that business and also the way we now see things coming back. We had to adjust the growth perspective and that's led to the asset impairment to the new assumed fair value.
The second big chunk in the asset impairment was in our e commerce solutions division where we have a stake in a parcel shop network in France, which was negatively impacted by the lockdown measures because the majority of the shops was closed, which likewise led to an asset impairment. On that investment. Those were the 2 big chunks, 1,000,000, the pop business in the UK, 1,000,000, the French part of of network. In terms of aircraft financing, we really have a very customized approach for each of the new triple 7 coming into operations depending on where we want to operate the aircraft and what is at that point in time, the best available financing construction what we now did for the last 3 777s was financing, these type of transaction which unburned our cash flow and CapEx from an accounting perspective and is now leaning to payments over time. And with now each of the new ones coming into service, we will take as the best solution for the respective aircraft.
So it's difficult to give a forecast, which is why we have now assumed that the additional aircraft will be coming out of CapEx.
Okay. That's great. Very clear. Thank you.
Thank you, Mark. And Emma, am I right? No further callers
Yes, there are no further questions at this time.
Okay. So that gives me opportunity before handing back to Melanie for closing. A bit of advertising on our IR behalf. As you've seen yesterday on the invite, we're going to run another virtual tutorial in September, September 3rd on how we deal with data analytics and its various aspect throughout the group and 4 weeks later early October, we will have John Pearson and members of team educating us a bit on why ecom works for Express, which has been topical, so in Q2, obviously. So Looking forward to that, but first, let's deal with the month of August.
Melanie, over to you.
Martin, yes. So to wrap up, I think, the second quarter, another very unusual COVID circumstances has shown the strength of our portfolio and the agility of our organization to really react to unforeseen events. And I think we have really lived up to our partners connecting people improving lives and nothing on that basis. No matter what shape or form the recovery is going to take over the next quarters. We feel quite confident that we will be able to deal with the new reality and the changed circumstances.
So thank you very much and all the best to all of you out there. And have a good summer if you that's a bit of a vacation coming up.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.