Half-year result 2008 - Growth exceeds market average

Even in an increasingly difficult world economic environment, the Kuehne + Nagel Group achieved growth above the market average and delivered good results in the first half of 2008. Compared with the previous year’s period, turnover grew by 7.3 per cent (10.3 per cent excluding currency impact and acquisitions) to CHF 10,700 million. EBITDA improved by 12.3 per cent (15.7 per cent excluding currency impact and acquisitions) to CHF 530 million; the margin rose from 4.7 to 5.0 per cent. Net earnings increased by 14.5 per cent (20.6 per cent excluding currency impact and acquisitions) to CHF 308 million.

Kuehne + Nagel Group

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First half 2007

First half 2008




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„We prepared for any possible economic slowdown in good time, focussing on strict cost management and profitable growth,“ said Klaus Herms, Chief Executive Officer, Kuehne + Nagel International AG. „We are satisfied with the half-year result, which reaffirms the sustainability and stability of our business model even in difficult economic times.“

The continuing credit crisis in the United States, the rising cost of oil and other commodities, and dampened consumer spending slowed global container market growth to between 4 and 5 per cent. Nonetheless Kuehne + Nagel, with its worldwide network and value-adding services, increased container volumes by 7.4 per cent. The Group achieved strong growth on trade from North America to Europe and Asia. Growth on the Asia to Europe trades, however, slowed. The strong demand for the company’s seafreight information logistics solutions, alongside productivity increases and strict cost management, contributed to a 12.2 per cent improvement of the operational result. At 4.3 per cent the EBITDA margin was above the previous year (4.2 per cent).

The global airfreight market, affected by unprecedented fuel prices and the slowing economy, grew under 3 per cent. While Kuehne + Nagel also registered slower growth in the second quarter, it increased tonnage by 11.4 per cent for the first half of the year. Cost efficiencies, new contracts and growing existing accounts were crucial to this good performance, which is also reflected in the operational result’s 20.6 per cent improvement. The EBITDA margin reached a record 6.1 per cent (2007: 5.6 per cent).

Road & Rail Logistics
In the overland business, existing accounts grew and shipment volumes significantly increased as the breadth of services and the company’s European network expanded. Distribution solutions dedicated to the high-tech industry developed significantly, contributing to a net turnover up 13.8 per cent, compared with the first half of 2007. Better capacity utilisation helped raise the operational result by 8.7 per cent. Despite continued investment in a standardised operational software, the EBITDA margin remained stable at 1.7 per cent. The integration of Cordes & Simon and G.L. Kayser, acquired in 2007, is progressing to plan. Acquisitions in southwest Europe, further strengthening this business, may be expected in the second half of the year.

Contract Logistics
The contract logistics business unit benefited from its global focus, with business remaining stable at a high level despite economic uncertainties. Net turnover increased by 5.9 per cent (10.3 per cent excluding currency impact and acquisitions). Major contracts with Airbus and Beiersdorf illustrate Kuehne + Nagel’s good market position and innovative strength in this business. Strict cost management helped leverage the operational result by 11.0 per cent. The margin increased from 5.2 to 5.5 per cent.

Considering the unfavourable economic forecast for the second half of 2008, the Management Board of Kuehne + Nagel International AG anticipates slower growth rates in the logistics market. Due to its global network and comprehensive portfolio of services, the company will nonetheless benefit from globalisation and the expected shifts in goods flows. High flexibility, transparent cost structures and a strong financial foundation enable the Group to quickly adapt to change and consistently maximise business opportunities.