A big thank you on behalf of the entire board and my team that you followed our invitation, and a warm welcome also to those following us on their screens via the Internet. We know that this has become more and more frequent in recent years, and we are very pleased with the combination of a physical press conference and the possibility to join us over the Internet. Please mute your mobile phones so that there are no interferences, which will make it easier from a technical standpoint. Before I say a few introductory words, let me introduce the two people next to me, CEO Frank Appel to my left, and next to him, Melanie Kreis, CFO of Deutsche Post DHL. I will first give the floor to Frank Appel, and together with Mrs. Kreis, he will describe the development of our business activities in Q3 2018.
You'll have the possibilities to ask questions. Now I give the floor to Mr. Appel.
Thank you very much, Ms. Ehrhardt. Ladies and gentlemen, welcome. First of all, I'd like to give you an overview of the group's current position, and afterwards, Mrs. Kreis will give you all the details on our financial KPIs. How can I sum up the results of the quarter? Well, I can sum them up by saying that everything is perfectly in line with our expectations after we changed our guidance in the summer. The DHL divisions are developing very positively, as you will see in a moment. In the PeP division, we can see that our measures are bearing fruit and that also positively impacted on our numbers. Overall, the economic environment is shaped by more uncertainty. It certainly hasn't become more stable, but we can say that we are well on track to achieving our goals both for this year and by 2020.
Let's take a look at the figures. This is not adjusted for currency fluctuations and M&A. You can see that our business grew overall in the third quarter, slightly so in the PeP division. Last year, we had the positive effect of the German federal elections, which positively impacted on volumes. Express is also growing very strongly. Within Forwarding and Freight, we are also witnessing growth, even though there is a bit of a volume decrease. Our measures have been very successful. At Supply Chain, we can see that there's also growth, even though the numbers are negative, but that is to do with the effect of the Williams Lea transaction. Details in a moment. At Express, here you can see the organic growth rate to a different extent. As you can see that at Express, the successful margin trend is continuing.
You can see that we reached almost 12%, this is the 12-month average on a rolling average. There was the decrease within PeP and Supply Chain, a very positive trend. Margins have improved here considerably. Within Supply Chain, that has been a trend for years, but at Global Forwarding, Freight, we also see a very positive trend. We are almost at the historically positive development that we witnessed a couple of years ago. We are well-diversified, and there are different risk profiles, as you can see on this slide. There are two businesses that very much benefit from B2C and e-commerce business, and that is not directly tied to the overall economic development because there is growth in these areas regardless of the overall. We have DGFF. These are two areas that are more dependent on the overall economic development in the world.
Supply Chain is less dependent on that is a balancing factor in the third quarter. Still, the figures in the DHL divisions are good. There are even better. Predict what the future will look like, but it goes without saying that more tariffs and taxes and cross-border trade can't have a positive impact. We are using yield management and other measures to make up for the negative repercussions of such political trends. Trade conflicts, nobody knows how they will develop in the future, but at any rate, they bring more uncertainty. The good news is that we are well-positioned to flexibilize our costs and to transfer activities here and there. We can see that our customers are following us here. After all, we do have a global footprint. Fuel prices are, of course, a major economic factor. At this division.
You can see that we are generating per container, per ton, have developed very positively. As a result, you can see what is shown on the left-hand side of this slide here, namely the conversion rate of the gross profit to the EBIT margin. The revenue margin overall has also increased. We are now approaching the historical levels of the years. It is also to do with the fact that we are rolling out new IT systems. Here, I'm not only talking about the new transport management system, I'm also talking about other things that we have improved considerably. Therefore, we are seeing a very positive trend overall that we expect to continue. One of the main drivers is the aforementioned transport. We are now active in around 40 countries. We will complete the rollout in sea freight by next year.
Years ago, in 2015, we decided to basically discontinue the HR suite. Instead, we are now working on the new transport management system. Others started earlier to implement such a system, but they still aren't done. We've made a lot of progress. We will also go live with this system in air freight before long, in the first country. Of all the shipments out there, data processing will also become much more effective. Supply Chain. I would only like to talk about one aspect here. We recently announced that we are selling our domestic business there to SF at a very decent price. We will enter into a strategic partnership. We will still be able to share in the growth in the Chinese market because we'll be paid a franchising fee.
We believe that this cooperation with a premium provider in the Chinese B2B business is the right step, and it'll help us to establish a long-term strategic partnership that looks very promising. I think it's a good step for our company because SF is a very strong partner. Which brings me to the business that I'm responsible for myself, in addition to my responsibility for the group overall, which is PeP. We can see a decline in volumes and also in revenue in the third quarter, which is slightly above the framework that we communicated, but that is only because of the comparison with the positive effect of the German national elections last year, which boosted revenue.
Adjusted for this factor, that is shown on the right-hand side here, we are still within the range of the volume trends that the gap between the speed at which volumes and revenues are growing is shrinking, which is good. That is also a first indicator that the price measures that we have initiated are bearing fruit, even though it would be premature to say that this has already been completed. Internationally, the business is growing very nicely here. Now let's take a look at the PeP pricing measures. There are several things here. The German regulator made it clear that they still need to analyze some of the figures that we provided. That is to do with our profit warning. As a result of which, our forecast for 2019 and 2020 was changed, and the regulator first wanted to analyze what this means specifically.
The regulator told us that they will only take a final decision next year as to whether stamp prices, postage prices will actually increase or not. We believe that there will be a good price postage increase next year. We've also taken more pricing measures in terms of direct costs, indirect costs, sales activities. Let me start with direct costs. Here we've done quite a lot. Takes a while, of course, for these measures to be implemented and to show some effect. We will see some initial effects in 2019 and then, of course, also in 2020. We've identified various measures that are already showing some first effect, and we are only using what we deem to be the best solutions. We are rolling out new systems here based on the right master data.
Therefore, the rise in costs now is much smaller than in the first half of this year. As for indirect costs, we can see that the trend is improving from one month to the next, and we are able to bring the indirect costs down. One measure is shown here. We are redesigning the PeP organization. I'll talk about that in a moment. That is currently being implemented, and we are also discussing it with the other side of the industry. Things are still in progress here, but we are well on track. We are refocusing our core business. We sold the Allyouneed Fresh business and Allyouneed. We are also focusing on reducing our expenses in terms of marketing and IT. We want to become more effective here. I already mentioned the reorganization of the PeP division. We split it up.
Ken Allen, who was responsible for Supply Chain before, very successfully so. Or for Express rather, sorry, will in future be responsible for e-commerce and parcel Europe. Ken Allen, as you know, is a renowned expert, and he has been a very successful member on the board for a long time, and I am very confident that he will be just as successful in terms of e-commerce and parcel Europe. I myself will then be responsible for the German mail and parcel business as of January next year. Even though 2018 has been a difficult year, I am pleased to say that our employee opinion survey has produced some positive results. Employee engagement, plus 1 percentage points, for instance. Let's not forget, we have 500,000 employees, and 75% of them took part in the employee survey.
If there is an improvement by 1 percentage point, then that is already a major step forward. You can see active leadership, plus 1 percentage point, customer centricity and quality, plus 1 percentage point. The PeP division is showing the biggest progress here, which comes unexpected because there are so many changes in the PeP division, so much uncertainty, and we actually expected the results to be worse than in the past, but that didn't turn out right. They are much better than expected, which is good. I am pleased to say that PeP is making a major contribution to the positive trends that I've outlined. That's a good indicator, isn't it? If the working morale is right, if people are motivated, then that will ultimately also have a positive effect on the figures. This was my last slide on a very positive note here.
With that, I'll like to hand over to Mrs. Kreis. Thank you very much for listening.
Thank you very much, Mr. Appel, a very good morning. Mr. Appel already gave you all the essential information, and I will now follow with the slides with all the figures, but I will focus on the most important points, just underlining what has already been said already. Let me start with the group P&L for the third quarter. Here, I would like to focus on four figures. First of all, revenues. You can see that we had 1.4% growth in revenues, and Mr. Appel already said that this does not look very convincing, but we also had adverse FX effects, and we also feel the sale of Williams Lea Tag last year. If you adjust for these effects and have a look at organic growth, we have a 4.7% growth. The growth dynamics, in spite of all the uncertainties Mr. Appel already mentioned, continues unabated.
If you now have a look at the EBIT line, this doesn't look that pleasant, a decline by 55%. The main driver, as was already mentioned, being the EUR 400 million restructuring costs at PeP, which lead to PeP showing a negative figure for the third quarter. For the DHL divisions, very pleasing, a growth by 14%. What is happening below EBIT? Nothing new compared to the second quarter. In the financial results this year, we can clearly see the first implementation of IFRS 16, which is a burden to our results, EUR 90 million in the quarter. If you adjust for that, we would see a positive development of the financial results. As we had to apply IFRS 16 for the first time, we've got a significant downturn in the financial results. Together with the EBIT decline in PeP, we have a decrease here.
The tax result is unchanged, the rough summary is that the growth trends go on unchanged, we also had some improvements at PeP. The one-off effects made the figures worse, for the other DHL divisions, the growth drivers are fully intact. This brings me to the individual divisions. Let me start with the PeP area. Here you can see what we have already mentioned several times in more detail. In Germany, you know that we are in a significant transformation process, in the third quarter, as expected, we now booked the civil servants pre-retirement. We said that we will invest EUR 500 million into restructuring in 2018, EUR 400 million for the retirement for civil servants, these EUR 400 million are now totally booked after Q3, the posting in Q3 is the main driver for the decline in PeP's EBIT.
We also have EUR 43 million other restructuring costs in the third quarter for PeP, we also announced that next to the one-off restructuring measures, we will also invest into productivity measures again, this is to the tune of EUR 150 million per year. This is not only for 2018, it's also ongoing in the coming years. In the third quarter, we also spend EUR 45 million on productivity measures. We want to be around the break-even line, this is in the eCommerce Solutions. This is the area that Ken Allen will be responsible for in the board of management, this is in line with our expectations. I think we strongly focus on the developments in Germany right now. The last figure which I would like to mention here is the CapEx line, which is also very important for our colleagues.
In spite of all the challenges that we currently have in PeP, we will continue to invest into this area. You can see that CapEx in the third quarter was significantly higher than in the third quarter 2017. Year-to-date, we spent as much money as in 2017 altogether. We are not saving money at the detriment of the future, we are investing into a sustainable growth of the business in Germany again. In spite of the mail decline, we want to grow soundly again. If you now adjust for all the restructuring efforts into pre-retirement, the productivity investments, have a look at the real development of the business, the operating business, you can see that in the third quarter, we are above EUR 80 million below last year. You can now interpret it in two ways.
First of all, it's not nice that we are still below last year's figures, but it's something that we expected, the trend is going in the right direction. It's significantly better than in Q1, it's better than in Q2, it's as we expected it. We are on the right track, but it's clear that there's still a lot of work to be done, Mr. Appel already mentioned the measures that have been initiated already to turn around 2019. A major step, of course, will be the result in Q4. Here you can see that in the fourth quarter, we still expect a slight decline compared to last year's figures, but around or between EUR 0-50 million. This is what we expect for PeP for the rest of the year. This brings me to easier figures, the DHL divisions.
For Express, Mr. Appel already mentioned this is the division which is feeling the adverse currency effects most significantly, both for revenues and for EBIT. It's all the more pleasing to see that we've got an improvement in the operating results by almost 10%, which is a very positive result. The cash flow at Express was also excellent in the third quarter, but also in the nine months of this year. This is a good basis for us, and we will continue to invest into the Express division. You might remember that we also announced that we want to have new 777 aircraft, and we had made a down payment in the third quarter, which means that the CapEx is higher than in Q3 2017. This brings me to Global Forwarding, Freight.
The trend, well, after a number of good quarters, we can really say that it's a stable trend that we see at Global Forwarding, Freight due to the selective focus on profitability. We are growing in the EBIT. We've got a better conversion of the results, this gives us an improvement of EUR 67 million-EUR 106 million in Q3 2018. The one figure which is not as good in Q3 is the cash flow. This is due to working capital, but this is something that also others in the industry felt in the third quarter. This is clearly a focus issue for the fourth quarter at Forwarding Freight. For Supply Chain, Mr. Appel already mentioned the outstanding development in the third quarter, the partnership with SF for the China business.
We can also note positively that driven by a strong development in almost all regions, with the exception of the United Kingdom, we managed to increase the operative margin to 4.7%, which is in the guidance of 4%-5%, which we also see for 2018 and 2020. I'm quite positive that Supply Chain will also give us good final results for the whole year. If you take everything together, you can see our guidance unchanged for the year 2018 and for the year 2020. Nothing has changed in the figures, we have not taken into account the China transaction for Supply Chain because it is unclear whether the closing will happen at the end of December or only in the new year. You might know that we are talking about around EUR 700 million cash, which is quite a significant figure, which is excluded from the figures here.
An unchanged guidance for the year 2018, a group result of EUR 3.2 billion, including the restructuring costs for PeP. Otherwise, we would have EUR 3.7 billion. For the year 2020, we expect more than EUR 5 billion operating results at the group level. Also the other figures shown on this chart have not changed. All in all, it's fair to say that the third quarter was as we expected it to be. The PeP restructuring is going according to plan. We can see sustained growth at the DHL divisions. On this basis, we confirm the guidance for 2018 and 2020, and we still are committed to our financial strategy. Thank you very much for your attention. Now back to Mr. Ehrhardt.
Well, over to you. Over to the journalists here. You might want to press the green button if you want to make a comment. We would ask that you briefly introduce yourself. DPA wants to ask the first question, I take it.
Good morning. Wolf Dewitz from DPA. Mr. Appel, with a view to German mail business, you said that you are still confident that next year, postage prices will go up. Can you be more specific about that? What is the price range that you have in mind for a standard letter in Germany, that is? Can you tell us why you are expecting that postage prices will increase sharply next year?
Well, first of all, as before, we never comment any expectations and speculations in detail, and we'll stick with this policy. I'm not going to specify any numbers here, because ultimately this is going to be a decision of the Federal Network Agency. They will define a range, then that range needs to be allocated to the various products out there. Why do I believe that postage will increase next year? Because factoring costs are rising as a result of the most recent collective bargaining agreement here. Salaries have risen by 3%. Factoring costs are rising.
At the same time, volumes are declining. We have a fixed cost network because we are covering all households in Germany six days a week. If you only deliver one letter instead of two every day, then that obviously means that earnings are down. Over the past 2-3 years, there haven't been any postage price increases. We will also be witnessing price increases in other areas. We are suffering disadvantages because of fewer economies of scale. Therefore, we believe that the Federal Network Agency will support our stance that postage prices should increase. Mr. Beyer will ask the next question.
Good morning. Steffen Beyer from dpa-AFX. Are you posting such losses only internally? Are you just selling vehicles from one department to another?
How about the valuation here? Is the valuation realistic, or are the EUR billions expected by the investors not realistic at all? Well, I will try to answer some of the questions you raised. Mrs. Kreis will then comment on a possible share buyback and how we are reporting the StreetScooter. First of all, as for the measures. The measures are covering all business segments. It's not only the PeP segment that is making a contribution to us achieving the EUR 5 billion. When you look at the situation in 2014 and the target for 2020, you can see that the lion's share will come from the DHL divisions. The PeP division only stands in the books with a 3% earnings increase.
We are currently at, like I said, we need to step up a little bit here. Overall, we are witnessing a very positive trend. At Express, for instance, we can see the very positive trend which is continued. At DGFF, the turnaround is still in progress, and in Supply Chain, we will also be able to boost our earnings considerably. Back to PeP. We are using all the levers that we've got within the framework of the business model, and we are very confident that we'll be able to return to the figures that we used to see in the past. The profit increase that we are planning, compared to 2014, is mainly based on the income generated abroad. After all, we have globalized our business considerably, and we don't expect the positive trends of that globalization to become any less important in the future.
The analysts may not be certain as to whether we'll be able to achieve that, but ultimately, it's all speculations on their part, and we are still very confident that we'll be able to achieve the targets that we communicated. StreetScooter is very successful, both internally and externally. External sales are growing, continuously so. We will discuss the option of working with financial investors when the time comes, but overall, we are very happy with the vehicles, including the StreetScooter. Mr. Ogilvie has made a major contribution here. He's in charge of this matter now on the board of management. The last thing that I would like to say is, you asked, how is this reflected in our balance sheet? Well, actually, I'd like to hand over to Mrs. Kreis for that.
Very briefly, before I talk about the share buyback, let us talk about the guidance and the free cash flow 2020. One point is very important. Mr. Appel already showed you why we think that the EUR 5 billion can be achieved, because we have got concrete plans already. This is not a cause in itself. Yes, it is not that we just want to have EUR 5 billion. No, I already told you regarding the figures for the third quarter, that we continue to invest into the expansion of our business. We are a growing business. We want to continue to grow, and this means that we will continue to invest. This is important to also make progress regarding cash flow, so that we have got enough money to invest into the business.
We are doing this this year already, and this is why we said that we wanted to keep up investments, and we accept a lower free cash flow 2018. The free cash flow 2018, the guidance without the 777s, we would be around EUR 1 billion. This is our expectation. We are investing, even if this is bad for our cash flow. You have to take a holistic point of view in the mid-term. Now share buyback. In our finance policy, we clearly said that if you generate excess liquidity, and we did so in the previous years, this year it is slightly different, as I explained. If we generate excess liquidity, then we will think about how to distribute this money to our shareholders.
This is not a mathematical equation that you say, now the pot is full, and then we will have an automatic share buyback or a special dividend. You have to see this against the general background, and this is something that we will discuss at the right point in time, and we will inform you about it. Regarding StreetScooter, we now have the StreetScooter in the area Corporate Incubations. The main customer for the StreetScooter is the PeP division. Internally, we want to have good intercompany prices at arm's length, like for external customers. The PeP area will have some discounts, but these are major customer discounts or major account discounts. This is not due to it being an internal customer getting special rebates. The question was not heard by the interpreters. I think it would not be sustainable if we had cross-subsidies within the company.
We said we will have EUR 350 million of loss and EUR 70 million from corporate incubations. The biggest area here is the StreetScooter, and this means the EUR 420 million for Corporate Functions is made up like this. Thank you very much. We have got Mrs. Dauer.
Can you hear me? Thank you. Ulrike Dauer, Dow Jones. On PeP, or Post and Parcel Germany, I would like to know, Mr. Appel, how long do you want to continue to do this? You said that you are in this position as an interim function, perhaps also until next year, or what are your plans? The media said that you are now building up another person to take over this area. Perhaps you can share some details. Now on the measures, how can I really see that the measures are already taking effect in the third or fourth quarter?
The EBIT margin is improved, that we have a lower loss in the EBIT margin. How can we really see this? The pre-retirement, how many people accepted this already, and what is the percentage compared to the total investments? There was another question. Where is it again? No, I will leave it at that for the time being. Thank you. First of all, how long will I still be chairing the PeP business? Until next year, and of course, we have got our internal deliberations, how we want to continue. I always said that I will first of all start to initiate measures myself, and at present, things seem to be going off quite well, and then it would be a good basis to hand over to somebody else. Who this is or when this will be is something I cannot tell you right now.
For Global Forwarding, Freight, we did the same thing. We laid the necessary bases, we took the necessary decisions, and now it is developing very well under Mr. Schabert, and we want to do the same thing here. You mentioned the EBIT and how can you see this. The quarterly development, we only have a slight improvement, but the effects were year-over-year, and Mrs. Kreis showed a picture on this. Some of the price measures were only started in the third quarter. You cannot see the effects. We can already see effects in the indirect costs, but the third quarter is also characterized by the fact that we only started and initiated measures, and it will take some effect, some time until the effects are shown.
You will see more effect in the first quarter, I see the details already, and this is why I am so confident, we cannot give you any detailed figures here. Pre-retirement, how many people have accepted the offer? I do not know yet. I think it's in the lower 100 areas, but we already booked all the provisions. We made the offer, and then in the public it was reported that not many people wanted to take it up. This is not true. We got a lot of applications, and we will fully utilize the program. This is the main message here. Now it's a process we have to go through. We have to find out whether the job will then be totally lost or not. It will take some time until we see an increase in the figures.
The good news is, and there are also auditors checking this, that we've got more than enough applications of people wanting to take pre-retirement. We will achieve this. All the speculations that the program is not going well is absolutely wrong. Otherwise, we would not have booked the figures for the third quarter. Okay, thank you very much. The next question by Mr. Kowalewski.
I have several questions. First of all, how many parcels are you expecting for Christmas? Secondly, do you think you'll be able to really finalize the group restructuring in Germany? Thirdly, you will split up the PeP division, and you have sold or downsized a lot of the businesses that used to be managed by Mr. Gerdes. My question is, what does that mean for your strategy abroad? Will you continue to expand your business abroad or not?
Well, we are expecting around 11, not billion. I was about to say billion parcels. That'd be nice. Actually, I meant to say 11 million parcels on peak times during the Christmas season. Yes, our planning is very detailed, I look into that myself because I'm responsible, I'm very impressed by what is being planned here, I'm confident that we'll be able to get the job done. The weather always means a lot of uncertainty. Nobody knows what the weather will look like in December. If there's a lot of snow, that will, of course, impact on the quality of our service. I'm monitoring what we are doing myself.
I'm looking at customer complaints, I'm looking at the positive trends, we can see that our quality is developing very positively. I've been saying right from the start that we need to focus on the right quality, which is also reflected in our figures, which look very good, both in terms of mail and parcel business. In our operations in the production units, we are also getting a lot of positive feedback from our employees as well, all of which shows that despite the overall situation being difficult, people are highly motivated. That's why I am convinced that we'll be able to do a good job during Christmas. I myself, and also the divisional board members, are monitoring very closely what we are doing there. E-commerce. We believe that e-commerce will continue to be a major growth segment both within and outside of Europe.
I don't want to go into detail here. Ken Allen will look into this specifically. Of course, we wouldn't set up a new board department if we didn't believe that this is a growth segment. It goes without saying that we want to positively further develop this segment in the long run, we've given Ken Allen enough time to get things off the ground, we'll have to figure out whether the current structures are right or whether some changes need to be made. When the time comes, we will give you an update on that, of course. Thank you. The next question comes from Mr. Inverardi. Just a brief follow-up on the StreetScooter, Mr. Appel. When you were asked what options you are pursuing for the future, for instance, a possible cooperation with financial investors, that you will sort this out sometime in the future.
Does that mean that you are no longer considering the cooperation with a big car maker? No, I didn't say that. At the moment, we are, in fact, in talks with various parties, and it remains to be seen what the outcome will be. I'm not ruling out anything, any type of cooperation. Thank you. Mrs. Mankus next. I have a follow-up question on the early retirement scheme. You said that you've received enough applications, but how long does it take to actually process these applications? How long does it take for the colleagues to learn whether their application was approved or not? Have there been cases where you had to reject any such applications because the jobs were still needed? I also have a question on the joint operations that you are setting up or will be setting up in the parcel business.
I understand that there have been some delays because of legal issues still pending. What's the current situation there? Well, I'm afraid I can't answer your question on early retirement. Actually, that's not our responsibility. This is handled by a Federal Network Agency, because this is all handled under German civil servant law. I would have to say something here off the cuff, and I don't want to do that. I think it's a standardized procedure. I don't know how many applications have been rejected. I'm pretty sure that some applications have been rejected, but I don't know how many. I really don't, because this is not my responsibility anyway. As for the joint operations, yes, there are some legal proceedings.
It's an arbitration proceeding, as a matter of fact, we believe that we'll be able to set up a joint operations between the parent company and the subsidiary before long to sort things out there. There are 2 questions from the web before Mr. Schlautmann and Mr. Davids will ask questions. Mr. Becker from Börsen-Zeitung, hello to you, is asking the following questions. Can you comment on parcel prices? What sort of price increases are you expecting specifically? Is Deutsche Post planning to set up additional partnerships along the lines of the strategic partnerships set up in the Supply Chain segment in China? Answer. Mr. Becker, I'm afraid we can't give you any details. We haven't announced any price increases, obviously, and we haven't announced a specific range that we are expecting.
We believe that the postage price increase will be higher than in the past. That is still work in progress, we can see capacities are becoming scarce. I can't give you any specific ranges here. As for China, we've prepared and negotiated the deal in China for a long time, we are not disclosing any details to the general public here. You always have to bear in mind the general market situation. In China, our Supply Chain business in China so far was not very successful in terms of our cooperation with local providers. Here, the partnership with SF will help us to move on because they are working together with a lot of Chinese companies, needless to say. There are differences in the various countries, therefore, I cannot announce any other plans in the same direction.
We always need to ask ourselves, what is the right strategy? In this case, the long-term strategy for China. There is a question from Mr. Romberg, he is asking whether it is true that Achim Dünnwald will no longer be responsible for the mail and parcel business. Well, we never comment on any speculation surrounding staff matters. If any decision is made in terms of our staff, we will make an announcement. I am not saying yes or no. I just decline any comment on that.
Okay, let us go back here into the room, Mr. Schlautmann. Yes. Thank you. I also have a brief question. About six months ago, there was the news by the ver.di trade union, which criticized that your testing period or the trial period would only be ended for new employees once they show that they are not sick for too long.
People said that they want to talk to you personally in order to make sure that the working conditions improve and also the conditions when the trial period or a term period will be changed into a permanent job. Have there been any discussions with you? Has there been any progress? General discussions that the supervisory board has with the management board, we can't comment on this. I can tell you that we've got excellent working conditions, that we've got a growing number of job contracts which are no longer term contracts, but permanent. I can also explain what this means, we still have some criteria to establish when a trial period will be ended. We, of course, never share any information that we discuss with the supervisory board or the shareholders, and I can't do this today.
Mr. Davids, I would like to come back to the topic of the booming parcel business, that in spite of the booming business, you still do not really seem to make a lot of progress here. One problem from my point of view was that major accounts, for example, Amazon, are offered lower prices, but the margin, of course, is suffering. Do you want to ask for higher prices of these major accounts as well in the future? If so, is this really feasible in view of the market power that the big players have in the market? Of course, we are not excluding any company from the price discussions. We never did in the past either. All the companies had price increases. The only question is by how much the prices were increased, we are supported by the competitive decision in Germany.
We've got almost full employment, transport costs are increasing for our customers as well. Against this background, I think it's logical that all the customers will contribute to the higher costs. This is the fun that you have as a manager. You'll test out certain things, and you will see whether it works or not. If you could predict everything, it would be boring. The exciting thing is if you tackle difficult things, and we are doing this, but this is also the charm of chairing a company. Yes, we will continue to talk about increasing prices, and we are discussing with all our customers. Okay, Mr. Needham. He came late. Nevertheless, welcome to you. I come from Capital Research, and I have two questions. I'm not quite sure whether the topics were already covered. Again, about divestment of companies abroad.
In China, you had a divestment of the Supply Chain business. You handed it over, China is a big growth market, and you said that you rather want to sell it. The question is, what are the criteria you use if you check or review your companies abroad? What is success? What is lack of success? How long will you keep a loss-making business? Then, the new division, eCommerce Solutions, is still writing red figures. When do we expect it to write black figures? A standard question around the Brexit. It's still very uncertain what the development will be. How much have you prepared for the various scenarios? Divestments or acquisitions are always based on our sustainable long-term strategy, and I already explained, I don't know whether you were there already.
In China, we said, if you want to grow quickly, we have to increase our customer base going beyond international customers. We said that this is too difficult without a Chinese partner, and this is why it was a strategic decision, and you could see that this was a very attractive business for us based on the purchasing price, because we sold a profitable business at a good price. This is something that we would do again. The financial criteria are criteria that we use during the acquisition process, but we are also willing to accept losses for a longer period of time if we are convinced of the strategic importance of a business. This is also true for eCommerce Solutions. We always said. You also saw this during the profit warning.
We said that we will still expecting losses in 2020 in e-commerce or now eCommerce Solutions, and this is what we stick to, loss between EUR 0 and EUR 100 million. We will report more detailed information if we have more news. For the Brexit, of course, we are also taking our preparations. It's still unpredictable a little bit, but as an entrepreneur, you of course, have to get prepared to more difficult times coming. All the divisions are working on this and have set up a set of measures, what we would do if there is a hard or a soft Brexit. We don't expect a hard Brexit right now. It wouldn't be good, neither for the United Kingdom nor for the EU. We can already see some customers taking their decisions to shift their warehouses from the U.K. to Europe to continental . Another follow-up.
For parcel business, you're mainly talking about the major customers. Do you also think about increasing the prices for the smaller, for the normal customers? Secondly, for the normal customers, they order something, and then Do you think that e-commerce costs will increase or not? So far, we have only decided price measures for the big corporate customers, but we'll also discuss this for private customers as of the 5th of January. We don't have any major plans right now. For the corporate customers, it's not only major accounts, but also the smaller customers. Corporate customers have a contract with us because they are normally paying prices which are lower than the prices you would pay in the normal post office. Now, I forgot your second question. Basic question, whether e-commerce will become more expensive for the final customer.
Well, this is a question then you would have to put to the e-commerce companies. I don't think that we will see that the e-commerce companies would burden their customers with higher service fees. Whether there might be some masked price increases within the products, I don't know. This is something that you would have to ask the suppliers or the customers. We can't influence this. The e-commerce wave had one beneficiary in the market, and this is a private customer. They had very good prices, and they had very good product with easy returns. You will probably use this as I do. It's very comfortable to send merchandise back. In how far our corporate customers pass on price increases to their customers, we don't know. They haven't told us, but I don't think that the prices for the retail customers will grow too much.
Okay, I can't see any further questions any longer. Yes, there is another question. Mrs. Stour, please.
Apart from U.K., Supply Chain has developed positively, so you said. What are you doing there? Oh, I also wanted to ask about the sales price of Allyouneed and Fresh. Can you get back to that? As for Brexit, do you think it depends on the industry that you're in? What sort of additional warehouse capacities you need? Is that not industry-specific?
We have a large business in the U.K., and we probably did a lot of things there that were not really visible, even though the underlying business developed very favorably. We now delegated a very experienced manager to the U.K. who looks into things. Yes, there's still room for improvement, but outside of the U.K., this business is developing very favorably. This is a very important market, so we'll definitely come to grips with that. Allyouneed and Fresh, we are not disclosing any details here. Mrs. Kreis knows more about that than I do. After the strategic decision is made, a basic announcement can be made, but not specifically. As for Brexit, I always discuss this with my colleagues, and you asked about warehouse capacities in various industries. I'm afraid I can't answer that question in detail.
Thank you. I'm looking around here. I'm not aware of any additional questions. Not here, not online. If you have more questions, you might want to stay for lunch here and discuss things with the board members directly. They'll still be here. Our colleagues are also here to support you. As always, we also have workstations prepared for the journalists right here. Before I close the press conference, I would like to say something else. I started out at my first press conference on the 11th of March 2009. Now, almost 10 years later, I would like to bid farewell to you because, as we've communicated before, I will take on a new professional challenge as of January 2019. I would like to thank you very much for the very positive and fruitful cooperation.
I can only do a good job if we can talk to each other, discuss things properly. I hope that you will continue to support this company. The company and its staff, in particular, really deserve that support. I hope that you've appreciated my work, if you did, that was only down to my team, Mrs. Cooper and Mrs. Clasen. If you were not happy with the job I did, that was only my fault. I think it's quite a tough job. Probably you're doing a good job here if both sides are not entirely successful, and I think I managed just that. I would like to thank you very much once again. I wish you all the best, and it would be nice to meet again. With that, I wish you a very pleasant day. Thank you