20
October
2008
|
06:11
Europe/Amsterdam

Increased earnings

Despite a weakening economy, the Kuehne + Nagel Group has achieved improved results for the first nine months of 2008. Compared with the previous year’s period, turnover increased 6.0 per cent (9.3 per cent excluding currency impact and acquisitions) to CHF 16,305 million, and the operational result (EBITDA) improved 7.8 per cent (adjusted 12.2 per cent) to CHF 771 million. Net earnings amounted to CHF 455 million, an increase of 9.9 per cent (adjusted 17.4 per cent).

Kuehne + Nagel Group

January to September (CHF million)

2006

2007 

2008

Turnover

13,289

15,378

16,305

Gross profit

3,824

4,427

4,731

Operational result (EBITDA)

611

715 

771

EBT

429

545 

589

Net earnings

315

414 

455

Seafreight
As a result of the weakening global economy, growth rates in seafreight slowed down. The global container market grew year-to-date by just 4 per cent. This development affected Kuehne + Nagel’s growth rates as well. The company increased its container volume by almost 6 per cent in comparison with the previous year. Especially in the trades Far East to North and South America, Kuehne + Nagel was able to outgrow the market. The strongest performance was recorded in the intra-Asian traffic and, as a result of the weakened dollar, in the US export business. The operational result increased by 9.4 per cent due to Kuehne + Nagel’s capability of adding value to customers’ supply chains by offering IT-based solutions. Furthermore, this strategy helps to reduce dependency on the respective rate developments. At 4.4 per cent, the EBITDA margin was above the previous year’s figure (4.2 per cent).

Airfreight
The growth of the global airfreight market, heavily affected by the economic downturn, declined to approximately 2 per cent. Kuehne + Nagel raised tonnages by about 8 per cent. In particular, the Middle East and South America regions performed very well. In addition, the demand for Kuehne + Nagel’s niche products grew significantly. Productivity increases and strict cost management led to an improvement of the operational result by 15.8 per cent. The EBITDA margin increased to 5.8 per cent (previous year: 5.5 per cent).

Road & Rail Logistics
The expansion of European overland activities remains the strategic focus of the Kuehne + Nagel Group. Net turnover was up 13.0 per cent, thus meeting the goal to steadily increase shipment volumes. Gross profit margin increased from 18.1 to 20.4 per cent. Due to continued investment in network build-up and IT systems, the operational result was lower than in the previous year’s period. The acquisition of the French Alloin Group (see today’s announcement) is a considerable milestone in the implementation of the business unit’s strategy.

Contract Logistics
The contract logistics business was negatively affected by the weakening economy especially in the US and UK. This, however, was compensated by new business wins. Net turnover increased by 5.9 per cent (10.7 per cent excluding currency impact and acquisitions). Despite pressure on margins in the third quarter, the operational result was 4.0 per cent higher than in the previous year. EBITDA margin was stable at 5.1 per cent.

Sale of logistics assets did not impact 9-months results
In March 2008, Kuehne + Nagel entered into a sale and lease-back agreement for 20 warehouse locations with the Goodman European Logistics Fund. The majority of the transaction was completed in the third quarter. The resulting transaction value did not impact the development of the results in the period under review. The Board of Directors of Kuehne + Nagel International AG will propose the payment of an extraordinary dividend at the Extraordinary General Meeting, scheduled for December 9, 2008 so that the shareholders can benefit from this successful sale (see press release dated September 29, 2008).

Klaus Herms, CEO of Kuehne + Nagel International AG, comments: “The financial crisis and unfavourable economic developments have their impact on the logistics industry as well. In the past nine months, we nevertheless succeeded in keeping our results stable. At present, it is rather difficult to forecast how the markets will develop. More than ever, it is of high importance to add value to the customers’ supply chains and to be able to quickly adapt to change. Our business model is highly geared to this, and we rely on its resilience.”