K+N: "Strong results in spite of currency headwinds"
Kuehne + Nagel Group maintained its growth momentum in the first three months of 2011 and, in line with its objectives, gained market share in all business units. Despite strong negative currency effects, turnover rose by 4.7% (currency adjusted: 17%) to CHF 4.82bn, while the operational result (EBITDA) increased by 9.2% (adjusted: 21%) to CHF 249m.
Net earnings improved by 17.6% (adjusted: 29.8%) to CHF 154m.
“The good results in the first quarter underline the value of our global logistics capabilities, flexibility and operational efficiency in a market influenced by different economic conditions, political unrest and natural disasters,” said Reinhard Lange, CEO of Kuehne + Nagel International. “As planned we expanded our activities in all business units while at the same time increasing productivity.”
Seafreight
Kuehne + Nagel increased container volume by 14% while – according to first estimates – the global container market grew between 7 and 8%.
Kuehne + Nagel achieved highest growth in the trade lanes to and from Latin America as well as to and from the Middle East.
As outlined in its strategy, the Group increased volumes in transpacific and intra-Asian trade lanes. In the first three months of 2011, EBITDA-to-gross profit margin rose from 34% in the previous year to 35.9% due to high operational efficiency. EBITDA improved by 15.5% to CHF 112m.
Airfreight
With a 21% increase in volume, Kuehne + Nagel’s airfreight business again exceeded expectations and outperformed the market, estimated to have grown between 6 and 7%.
In all regions, Kuehne + Nagel benefited from its investment in sales and its industry-specific product offering. In particular, Kuehne + Nagel’s expansion of the specialised network for perishables yielded results.
Following the acquisitions in South America, volumes significantly increased in this segment. Double-digit growth was also achieved in worldwide exports for the automotive industry.
Due to the above-market average volume growth and increased productivity EBITDA-to gross profit margin improved from 28.7 to 32.3%. The operational result rose by 28.6% to CHF 63m.
Road & Rail Logistics
Kuehne + Nagel gained market share in the European overland business as well.
Net invoiced turnover increased by 15.1% (currency adjusted) exceeding market growth of 6%. EBITDA remained stable on last year’s level, despite continuous price pressure, fierce competition and investments into the expansion of the European groupage network and its full and part load activities. EBITDA margin decreased from 2.2 to 1.9%.
The results of the recently acquired RH Freight, United Kingdom, a company specialised in European groupage activities, will be consolidated as of April 2011.
Contract Logistics
In the contract logistics business unit net invoiced turnover rose by 7.9% (currency adjusted). New business wins contributed to a reduction of idle space from 12 to 7% compared with the previous year’s first quarter.
However, start-up costs for various new projects negatively impacted EBITDA, which was 8.9% below the preceding year. EBITDA margin declined from 4.2 to 3.9%. Measures have been implemented to improve productivity.
Lange added: “It is difficult to forecast the world economic development in the months to come. We are confident that our resilient integrated business model will support the continuation of our strong performance.”
1 CHF = 0.77 EUR (xe.com, April 2011)
