TI Logistics Briefing & News: K+N continues to expand across all sectors

Swiss based logistics group Kuehne + Nagel has released its results for the first nine months of 2006. Turnover increased 31.8 per cent to CHF 13,289 million (*8,362m). Its operating profit (EBITDA) improved 53.1 per cent to CHF 611 million (*384m).

According to management, business performance during the period was characterised by strong growth in sea and airfreight particularly in the third quarter, as well as business expansions in contract logistics and overland operations as a result of the integration of recent acquisitions.

Seafreight activities recorded a 19 per cent rise in volumes due to a growth in container volumes on all trade lanes. The company put a 4.2 per cent EBITDA margin, up from 3.5 per cent, down to productivity improvements through intensified electronic data exchange with customers and shipping lines as well as stringent cost management. The operational result rose 36.8 per cent year-on-year.

Following a strong third quarter, Kuehne + Nagel’s airfreight business recorded an 11 per cent increase in tonnage. Despite pressure on prices due to what management described as the highly competitive market and lower rates, Kuehne + Nagel maintained a stable EBITDA margin at 4.5 per cent and improved its operational result by 15.3 per cent.

Kuehne + Nagel is investing in the expansion of its overland operations and has over the past months gradually come closer to the goal of operating its own European network. Increased cooperation between the company’s national organisations across Europe and the successful integration of acquired firms contributed to a 21.0 per cent increase in turnover. The operational result was up 27.2 per cent compared with the previous year; the EBITDA margin remained stable at 1.7 per cent.

In contract logistics, K+N stated that the integration of the ACR Group was progressing to plan and generating ‘strong impulses’ for cross-selling activities. Due to this acquisition and a 12 per cent organic growth, turnover in this business unit was almost tripled. At the same time, the operational result was more than tripled, and the EBITDA margin rose from 4.5 to 4.9 per cent.

“The successful implementation of our strategy to create added value for our customers worldwide through integrated logistics solutions is reflected in the consistent growth across all business fields and regions, and we are confident of exceeding previous full-year results again in 2006,” said Klaus Herms, Chief Executive Officer of Kuehne + Nagel International AG.