Kuehne + Nagel International AG - Half year results for 2006

The global Kuehne + Nagel Group reports a jump in growth and profits for the first half of 2006. Turnover increased by 35.6 per cent to CHF 8,690.3 million. Gross profit, which serves as a key indicator of a logistics company’s performance, nearly doubled to CHF 2,505.8 million, and the operational result (EBITDA) was up by 60.2 per cent to CHF 415.7 million. In comparison with the same period last year net earnings advanced 62.2 per cent to CHF 208.1 million.











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Klaus Herms, Chief Executive Officer of Kuehne + Nagel International AG, said, “The strong first-half performance is the result of the effective implementation of our strategy, sustained organic growth, and the efficient, successfully progressing integration of ACR Logistics, which has been part of our company since January 1, 2006. The complementary fit between the two firms has allowed us to put our focus on meeting our customers’ requirements and on increasing cross selling opportunities from day one.”

With seafreight volumes increasing approximately 20 per cent, Kuehne + Nagel again succeeded in doubling the market’s growth rate of between 8 and 10 per cent. Above average growth in volumes was realised on virtually all trade lanes, the increases especially in export traffic from North America to Asia (72 per cent) and to Europe (31 per cent) being of particular note. Strong organic growth, value creating IT-based products and further productivity gains contributed to a gross profit improvement of 23.1 per cent and a 38.0 per cent higher operational result.

Given the still challenging market environment, Kuehne + Nagel met its airfreight expectations with an 8 per cent increase in tonnage and gross profit growth of 13.9 per cent. The company gained additional market shares, for example increasing cargo volumes from the Far East to North America by 29.3 per cent. Kuehne + Nagel’s improved process management worldwide contributed to an increase in the operational result of 16.5 per cent.

Overland activities continued to grow rapidly. Expanded groupage operations throughout Europe as well as business growth through acquisitions led to a gross profit improvement of 28.4 per cent and an increase in operational result of 53.4 per cent. Standardisation initiatives are expected to further enhance efficiency.

Contract logistics operations meanwhile generate more than 50 per cent of the Kuehne + Nagel Group’s gross profit. The acquisition of ACR and a 12 per cent organic growth accounted for the threefold increase in turnover, elevating Kuehne + Nagel to the top three providers in this segment. With an operational result of CHF 100.3 million, this business unit has made a significant contribution to the Kuehne + Nagel Group’s success.

As announced in the first quarter of 2006, segment reporting has been expanded to include real estate, in order to further improve transparency and to differentiate between the operational results of logistics and real estate activities respectively.

The Management Board of Kuehne + Nagel International AG is confident about the second half of 2006, anticipating continued growth and strong performance.