Thank you. Hello and good morning to everyone out there. Thank you that you could follow our invitation from last night. So quickly, it's on the preliminary figures we released yesterday. And as announced, we've got Frank Appel, Group CEO and Melanie Kreis, Group CFO with us Today, we're going to take you through the slides that I think you have in front of you.
And after that, there will be time for Q and 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 Q4 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 of €4,800,000,000 on a preliminary basis and the cash flow around €2,500,000,000 I think 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 ad hoc and of course have not the same time to prepare for Details as we usually give it in March and we will give it in March, we are 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 But of course, we feel very confident that we will get Better numbers and that's the reason why we have withdrawn the old guidance and have improved that on the basis as you see later on, but as I already said above this year's numbers.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 that in Express. We have also seen that in parcel. We have seen that equally in E Commerce Solutions. We have not given you the detailed numbers yet.
But we really have a lot of tailwind from the e commerce business and our people have done a fantastic job in the last month, 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 Mr. 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 TBIT numbers for the Q4 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 4th quarter.
That was a clear acceleration from the 4.4% we showed in the Q3, 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, very strong performance. And also Parcel Germany revenue grew, of Of course, more than 12%.
But in P and 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 Q4, 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 67,000,000,000 When we look at the EBIT development, 56%, Frank already mentioned it for the 4th quarter. Absolute EBIT in the Q4 close to €2,000,000,000 Of course, the one divisional number really sticking out here is the Express number, €1,040,000,000,000 in the quarter, that is, of course, a tremendous achievement, 70% growth, so Really outstanding performance. But also on the P and P side, a very strong finish to the year, 28% growth. And yes, Yes.
In the Q4 of 2020, E Commerce Solutions was actually still negative in 2019 and now €75,000,000 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 4,840,000,000. Frank already mentioned it. Again, I think the number really sticking out here is the EUR 2.75 billion from Express, the 35 percent EBIT growth For the full year and of course also SEK 160,000,000 from Ecommerce Solutions, fast forward on the growth trajectory we had Our plan for our youngest operating division.
As you know, we have a couple of one offs in our reported 4.8, 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 effects both in 2019 and in 2020. The 2019 effects are, I think, well known. So the starting point is EUR 4,048,000,000. 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 Q4. So in terms of COVID, onetime effect, it's the EUR 262,000,000 you are already familiar with, the onetime bonus EUR 100 €63,000,000 and the impairment €99,000,000 from the Q2. And on the StreetScooter side, we had already indicated at the end Last year that we are going to stretch out the ramp down into 2021, 2022, and that brought the number for the full year impact In 2020 down to now around EUR 320,000,000 So if you take those onetime effects out, The underlying operating number for 2020 stood at 5.4%, which is 34% more than underlying 2019 or in absolute terms €1,400,000,000 That is of course a very pleasing result. And the EUR 5,400,000,000 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.
We now turn to Page 6. I remember that in the Q2, we had some questions about, oh, shouldn't you kind of like stop CapEx? And we 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 Q4.
When you look at the CapEx in the Q4, it was €1,350,000,000 Taking the full year CapEx number to €3,000,000,000 We know that this is slightly above our guidance of 2,900,000,000, 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 overspend On the gross CapEx, when you look at the year over year comparison, you probably are all aware that in 2019, Keane, we had EUR 1,100,000,000 of the 777 CapEx in the EUR 3,600,000,000 in 2020, it was just EUR 3.20 So when you kind of take out the 777, the underlying number was a growth from 2.5 to 2.7, Which I think is quite balanced and 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 €2,500,000,000 We are still kind of like looking at all the Tiny details of cash in remote places.
So it's around 2.5 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 €2,000,000,000 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 they 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 Melench 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. We have shown a yellow tick for the CapEx. But for me, 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 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 What has been the dominant theme in 2020 is that its 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 your 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 that 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'll 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 Yes, we have seen that last year, because we have to assume that we will get on lockdowns again for the year, but we will see a continuation of B2C growth. And of course, this lockdown is different from the first. I think we see still significantly more economic activity then in last year's spring and that should help our B2B business be it in Express or DGF on 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 that the logistics industry and we in particular are helping with to get the vaccine distributed. On Page 12, we have the muscle and the strength to continue to 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 eight airplanes. And again, it's the same game as the first fourteen that we will replace now. Growth capacity we have on short term More short term capacity and we'll replace that so that we are not begging or betting on long term Fast growth, we really have enough flexibility, but we found like before for the last fourteen that it's the right time to buy now 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 of 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 micron PH13, 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, so it means we start from, As Melanie said, EUR 5,400,000,000 and next year will be stronger than this year again. And that's significantly above our previous guidance. On the cash flow, we will be better than €6,000,000,000 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 record. I say that with some pride as well. We gave you EUR 5,000,000,000 in 20 14 as a goal for 2020. If you just exclude only the bonus payment, not StreetScooter any and 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 shareholders 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. I said end of 2019, we are in better shape than ever. Our muscle has strengthened through the crisis. We are now in even better shape than we were at end of 2019. And that's the reason why we believe we can capture the potentially 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 and A.
And the first question is from the line of Andy Chu of Deutsche Bank. Please go ahead.
Good morning, Frank. Good morning, Melanie. Two questions, please, for me. First one's around free cash flow and then maybe Some comments around sort of cash returns. And then just that, I know Frank you mentioned this, obviously, very early in the year to About your sort of mid term guidance, but it does feel very conservative, the free cash flow guidance, given that you've delivered SEK 2,500,000,000 in 2020.
You expect EBIT to be up for the next 2 years, and yes, that implies kind of just more than EUR 3,500,000,000 of free cash flow for 2021 2022. And then the second question is around B2C. And obviously, your comments on Slide 10 that you expect B2C to grow In 2021, from a higher base. I just wondered how much of that is due to sort of the dimensions of lockdowns continuing into 2021. Would you therefore believe that in 2022, we're hopefully unlikely to be any sort of further lockdown, but Volumes in B2C can grow in 2022 off 2021.
Thank you.
Yes. Melanie, we'll talk about the first, maybe start with the second. So we said already before that we fact that we will go back to normal growth rate if COVID-nineteen is over. So this year is definitely significantly impacted. Proof of evidence is China.
China has not been a lockdown and Chinese business in e commerce has grown and continue to grow quite rapidly. So we believe that from 2022 on, we should be normal rates. In Norway, in Germany, we always said It's the market will grow between 5% 7%. In some other markets, it's going to be higher for sure. In terms of 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 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-nineteen is over. But of course, we will see 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 continuation of growth beyond COVID-nineteen.
Melanie, may you can say something about cash flow?
Yes. So on the free cash flow guidance, I think the €6,000,000,000 really should be seen as a minimum floor. We are fully aware of the math if you take the €2,500,000,000 at least only €3,500,000,000 for 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 2021.
And then, of course, also So for the new midterm period out to 23 on the 9th March.
Fair enough. Thanks very much.
The next question is from Christian Nedelcu of UBS. Please go ahead.
Hi, thank you very much for taking my questions. 3, 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 Pet? I guess and if we can tie this up to your CapEx guidance, you are guiding for growth in CapEx, some of it as a 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 employed expectations?
Thank
you. 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 3rd and the 4th quarter has been the strong volume growth, the vertical utilization of a network with fixed Costs which were now really nicely utilized and what was particularly helpful starting in the Q3 but also in the Q4 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 The three 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 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 and P. So in our CapEx heavy divisions, we are earning a good return on 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 the divisions where we have seen 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 Parcel Germany, where we will of course continue with our shift from less utilized mail sites Getting parcel in there, so we will try to continue with that game, which helps us quite a lot.
Understand. A 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 WACC is 8.5%, which we always use for our EBIT after asset charge calculations. And both P&P and Express are very solidly over delivering against that.
Understood. Thank you very much.
The next question is from Liam Glynn of Credit Suisse. Please go ahead.
Good morning. 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 headcount 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 a tailwind to think about for 2021?
Okay. So in terms of growth and what does it mean for FTE, I mean, directionally, we indeed Given that we should add headcount, I think what we have now shown is that we have been able to really Increased efficiencies, that is one of the driver for the good performance. We don't budget precisely for FTE. So we don't have a target number for 2021, but I think what our divisions have shown across the board in 2020 is that they really know So how to do that in a very efficient way, I would expect that trend to continue. Yes.
In terms of currency, that's indeed an interesting question. We are I mean, in terms of Pure U. S. Dollar, we are short. So but the rate of 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 agree 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 2021 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 a 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.
Thanks, Ali.
The next question is from Adrian Pell of Commerzbank. Please go ahead.
Yes. Good morning, everybody. Three questions from my side. Well, first of all, On CapEx, actually, as you had a press release, obviously, on any traditional Job 7s, 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, Yes, call it 1 off or potentially phasing effects that we had probably in the past already on real estate or anything like that to be taken into account. And lastly, sort of bit of an outlook into Q1 would be pretty much In particular, on the parcel related divisions, E Commerce 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 a comparably Significantly better cost base in these divisions in Q1 versus the Q4? Or is Quite some cost sticky in the March quarter. Thank you.
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 1st 7 months of 2021.
So by the summer, we will have all 14 operational in the fleet. The new 8 Our plan to be delivered in 2022 and 2023, basically 1 per quarter, so 4 in 2022 and 4 in 23. In terms of financing, we have baked it into the Around €9,500,000,000 for the cumulative CapEx guidance 2020 to 2022. 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 constructions, 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. We will, of course, consider it fully in our new guidance for 2021 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 Q4 of 2020. We still had some restructuring cost of change in the Q4 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 Any more in the Q4 of 2020 and volume activities were beginning to move in the right direction. And of course, for Supply Chain in 2021, 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 Trading, particularly for kind of like parcel ecom volumes, obviously, we see a continuation of Stronger volume than what we would have normally expected in the 1st 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 €9,500,000,000 cumulative CapEx, that's for the new 777s like what is a couple of 100 The 1,000,000 that you have baked in for this new head aircraft?
Yes. So I think, I mean, again, we are kind of like working all the detailed Financing construction, but if you take an order of magnitude of around EUR 300,000,000 I think that would be a good ballpark figure. And that is of course included in the EUR 9,500,000,000
Perfect. Thank you.
The next question is from Sam Blanda, JPMorgan. Please go ahead.
Good morning. I have two questions, please. The first one is on the freight forwarding division. I think EBIT was down slightly year on year. Just be wondering Why that is, I think it was up quite materially year on year in Q3.
I guess volumes have probably got a 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 and 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 Dialog Marketing and just some commentary on what both of those lines are doing would be helpful. Thanks very much.
Okay. So I mean on the DTS, yes, so I mean indeed looking at the fact that there is revenue growth of 14 And EBIT is essentially flat. That looks a bit weak. It's in line with what we had expected internally for the 4th 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 ecom 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, etcetera, is always difficult.
But from what I've seen so far, there's nothing materially concerning. So I think it's for me, Turning. So I think it's for me in line with what we had expected given the overall state of economy. And we will give you more details On GP and so 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 And it's still worse than our long term average, but it's a bit of an improvement compared to what we have seen in the second and third quarter.
Yes, I see. Okay, thank you very much.
The next question is from Andre Norde of Kepler. Please go ahead.
Yes, good morning. Two questions from the Post and Parcel Germany. Firstly, looking at the other parcel operators, so they seem to have The big problems in handling very high volumes. Did you experience anything of that resulting in, let's say, excess costs and then pressure on margins? Same on the mail side, with some of our post load rates have been a sort of research of cars.
Did you see that? Has that had an impact on Q4 numbers, which where the decline is slightly smaller than in Q3? Or was it really in dynamic marketing?
So I'm not sure I totally got the question. But I tried to answer in a new term because I answered 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 And the P and 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 Innovation 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 and P. So the utilization was overall good. And I mean, of course, absolute costs were up.
But in terms of cost efficiency, it worked Very smoothly. On the mail volumes, so I mean, we And now just doing the initial analysis on what is really driving it, how much is dialogue marketing, mail communication. On March 9th, we will give you the Specific breakdown from all I've seen so far, there has been nothing extraordinary.
Okay. Thank you.
The next question is from Nuneeta Kiani of Baixa Norge. Please go ahead.
Hi, thank you for the call. On cash return, with a strong free cash So 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 share buyback? That's the first question.
And then Secondly, can you share our progress on the price discussions on the rate increases For all the Express and the Parcels business so far?
With regard to cash returns, I mean, we have a very clear finance policy talking, first of all, about the regular dividend with the 40% to 60% payout corridor, where we now will finalize the net profit number for the year and 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 €2,500,000,000 is a good foundation, but that is nothing to be announced and decided today. In terms of the second question, I didn't fully understand it.
I didn't fully understand it. Maybe you can
Maybe I understood that 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 in
the quarter. I'm actually asking On the price increases, the G and A, 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 2022. And so on the rates, in I mean, 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 business as Usually, we are 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.
Thank you.
Night. And the next question is from Johannes Braun of Stifel Europe. Please go ahead. Yes.
Thanks for taking my questions. 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 1st 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 your thoughts on that and probably On the revision of letter price regulation and what that 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 have not stopped completely to buy cars or whatever. And I think that will continue in the Same way, people have learned now that they live with COVID-nineteen even with lockdowns, but they don't have to do nothing. Certain sectors definitely have seen boom things like furniture and e bikes and all this kind of stuff. So we don't see any reason why that change and that should give with some catch up anyway, some good development on B2B and we see that already with the constraints of our sea freight capacity out of Asia somehow.
So the lockdowns probably will not lead in the same way as they have Then the 1st lockdown to shutdowns of supply chain and 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. When you're in letter prices, all the regulation is more about technology 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 postal law. The government is now set to change that.
That's on its way. We have still approved Stem price until end of 2021, this year would be the year anyway that we start with the regulator to talk about prices next year. As I said, the government has that on their pipeline, they said they're 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, 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. We just said that the application was not right and not backed by the postal law and that needs to be fixed and the government is doing that at the moment.
Thanks. But is it correct that we need this revised post law pretty soon 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 an election year. Therefore, it has to happen in the 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 stem 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.
All right. Thank you.
And we have a follow-up question from Adrian Pell of Commerzbank. Please go ahead.
Yes. Hi, again. Actually, I've got 2 quick ones, I think. Well, 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.
1 is actually a faster consumption of potential remaining tax benefit 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 the 1st weeks of shipping the vaccines and what do you think going forward?
Thank you.
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 that 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 Yes, I think governments and authorities will go through a steep learn curve as well. And therefore, we will see a significant acceleration. So I'm very optimistic Then in some of the world would look already at the COVID-nineteen 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 Caballis Biotech just announced with Pfizer that they now want to use €2,000,000,000 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 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 script 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 limitation It's a 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 quite early on in the year, and we will give more Yes. Both on what happens with 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 improves. We still have opportunity to activate tax losses there. But directionally, we expect the tax rate to continue to go up, like what we have talked about for quite some time now.
All right. Thank you.
Fantastic. Operator, I understand that 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, adapted 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 promise a long time ago. We have a very clear plan going forward with all strategy 2025.
We have the strength and 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 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 the next time I think on the 9th March.