Growth accelerating, momentum increasing
Kuehne + Nagel Group
First half 2010
First half 2009
Operational result (EBITDA)
“The entire logistics industry has capitalised on the economic recovery, resulting in rising transport volumes and increased warehouse utilisation,” said Reinhard Lange, CEO of Kuehne + Nagel International AG. “Thanks to our highly dedicated workforce we were able to smoothly handle our significantly increased volumes and considerably improve productivity levels. Furthermore, in the still volatile, challenging market, we benefited from our customer focus.”
Following strong volume growth in the first quarter 2010, demand in the global seafreight market accelerated in the second quarter, leading to shortages in shipping capacity and containers resulting in significant rate increases. With a volume growth of approximately 20 per cent in the first six months of 2010, Kuehne + Nagel clearly outperformed the market and returned to its pre-crisis growth dynamics. The Group gained market share in all trade lanes, performing particularly well in the export business to South and North America. Due to sharply increased freight rates, the operational result of CHF 204 million remained at previous year’s level, while the EBITDA margin declined from 5.5 to 4.7 per cent.
The international airfreight market experienced surprisingly high growth rates in the first half of 2010. Across all regions and industries shippers turned to this more cost-intensive transport mode to handle their orders as fast as possible. Kuehne + Nagel’s growth rate of 31 per cent marked a record high. Volumes grew in all trade lanes, especially on the routes to and from Asia-Pacific. The Group benefited from its market-oriented airfreight products and proactive capacity management. EBITDA margin, which had been exceptionally high in the previous year’s period, normalised in the first half-year of 2010 to 5.4 per cent. Process efficiency and productivity increases led to a 7.1 per cent increase of the operational result.
Road & Rail Logistics
During the first half-year, the rapidly improving economy resulted in considerable volume growth in the European overland transport market. At the same time, providers were exposed to high pressure on prices and fierce competition. Kuehne + Nagel delivered encouraging overland business performance. Expanding activity in groupage, and less-than- (LTL) and full-truckload (FTL) services led to a 13.3 per cent increase (excluding currency impact) in net turnover. Improved network utilisation as well as process standardisation and optimisation contributed to an increase of 52.6 per cent in the operational result. EBITDA margin improved from previous year’s 1.6 per cent to 2.1 per cent.
In contract logistics, the favourable market environment supported improved capacity utilisation and accelerated warehouse throughput. In particular multinational companies showed great interest in providers offering global competence and standardised services. The 4.7 per cent increase in net turnover (excluding currency impact) reflected new business wins Kuehne + Nagel concluded and implemented in the first half of 2010. Warehouse utilisation was optimised, especially in North America. Due to start-up costs, however, the operational result decreased by 8.0 per cent. EBITDA margin was at 4.2 per cent (previous year: 4.6 per cent).
Karl Gernandt, Executive Vice Chairman of Kuehne + Nagel International AG, said: “In the first half of 2010 the Kuehne + Nagel Group achieved its ambitious goal of gaining market share in all business units while demonstrating strong profitability. As a result of the previous year’s investments in sales and product development, Kuehne + Nagel over-proportionally benefited from the improvement in global trade. Due to this convincing start, we are optimistic about the further development of our business. However, continued credit risks in some southern European countries and the situation in international finance markets still require great vigilance.”