Half-year result 2009 - Solid performance continues

Kuehne + Nagel’s half-year results confirm the Group’s dual strategy of counteracting the economic crisis through strict cost management and a commitment to market share expan­sion. Gross profit – the relevant indicator of a logistics provider’s volume and margin performance – was only 6.7 per cent below (currency-adjusted: 2.5 per cent above) the figure for the previous year’s period. The operational result (EBITDA) decreased by 12.1 per cent (currency-adjusted: by 6.2 per cent) and net earnings by 16.2 per cent (currency-adjusted: by 11.8 per cent) to CHF 258 million.

Kuehne + Nagel Group

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First half 2009

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Reinhard Lange, CEO of Kuehne + Nagel International AG, said: “Considering the extremely difficult global economic environment, the development of our business and results during the first half of 2009 was satisfactory. We expanded market share throughout the business units, while our value-creating services and global cost management contributed to margin improvements. We see this as a confirmation of the resiliency of our business model.”

During the first six months of the year, the global seafreight market was characterised by volume declines and fierce competition. Kuehne + Nagel, however, maintained the positive volume trend of the first quarter 2009 and gained further market share. From the first to the second quarter 2009, volumes grew by 10 per cent; although, compared to the first half of 2008, volumes declined by 11 per cent. Due to strict cost management and growing demand for complex logistics services, the operational result decreased just 3.3 per cent. EBITDA margin increased from 4.3 to 5.5 per cent.

With cargo volumes down more than 20 per cent, the global airfreight market continued to suffer in the first half of 2009. Kuehne + Nagel’s focus on strengthening its activities in certain niche markets and expanding customer relationships, led to a volume decline (19 per cent) that was below market. From the first to the second quarter 2009, Kuehne + Nagel increased volumes by 10 per cent. Compared with the previous year’s period, operational result decreased by 16.2 per cent. EBITDA margin, however, grew from 6.1 to 7.4 per cent.

Road & Rail Logistics
In the first half of 2009, the European road transport market suffered high declines in volume and, in addition, business was negatively affected by overcapacity. Although turnover was down 17.3 per cent, Kuehne + Nagel still performed better than the market average. Gross profit increased by 32.8 per cent due to acquisitions. Despite planned investment in standardised operational software, EBITDA margin remained stable at 1.6 per cent (previous year: 1.7 per cent).

Contract Logistics
In the second quarter of 2009, the global market for contract logistics stabilised at the first-quarter level. However, compared to the previous year’s period, there was a considerable volume drop, which Kuehne + Nagel compensated for with new business. Turnover was down 9.1 per cent (currency-adjusted: increased by 1.4 per cent). Due to insufficient capacity utilisation, mainly in North America and the United Kingdom, the operational result decreased by 23.7 per cent. EBITDA margin was at 4.6 per cent (previous year: 5.5 per cent).

The Management Board of Kuehne + Nagel International AG does not anticipate a substantial short-term improvement in the global economy and markets. The company will therefore continue its focused dual strategy of disciplined cost management and market share expansion.