Solid performance in a challenging environment
Kuehne + Nagel Group
1st Quarter 2008
1st Quarter 2009
Operational result (EBITDA)
In the global seafreight market, the negative trend from the fourth quarter 2008 continued. While Kuehne + Nagel was affected by this development in the first two months, it was able to gain additional market share in March. The result was a 13 per cent volume drop in the first quarter of 2009, which was less than the market average. Due to strict cost management, the operational result was only 4.7 per cent (currency adjusted 2.6 per cent) below previous year. EBITDA margin increased from 4.4 to 5.3 per cent.
The airfreight business was particularly affected by the recession, with a global market decrease of more than 20 per cent compared with the previous year’s period. Strict cost control and intensified sales activities mitigated the impact on Kuehne + Nagel’s performance. Thus, despite an overall volume decline of 17.9 per cent compared to the previous year, substantial new business was generated. The operational result decreased by 10.3 per cent (currency adjusted 6.6 per cent), while the EBITDA margin grew from 6.1 to 7.9 per cent.
Road & Rail Logistics
In the first quarter of 2009, demand in European road transport weakened further. For example in Germany, a core groupage market, Kuehne + Nagel experienced a 20 per cent volume decline in the first two months of the year. As of January 1, 2009, the French Alloin Group was fully consolidated in the Kuehne + Nagel Group’s financials, the 31.4 per cent increase in gross profit is mainly due to this acquisition. Improved network capacity utilisation and substantial cost reduction could not compensate for the significant fall in volumes. The operational result was 45.5 per cent (currency adjusted 20.5 per cent) lower than in the previous year’s period. Margin was at 1.0 per cent compared with 1.5 per cent in the first quarter of 2008.
The global contract logistics market continued to decline and was impacted by strong margin pressure in the first quarter. Kuehne + Nagel compensated for falling customer volumes with new business, and counteracted high fixed costs and insufficient warehouse utilisation through stringent cost management and workforce reductions. Nevertheless, the operational result decreased by 21.3 per cent (currency adjusted 10.2 per cent), the EBITDA margin declined from 5.2 per cent to 4.5 per cent.
“The solid performance in the first quarter confirms the efficiency of the measures we have taken at an early stage and implemented on a worldwide scale to adapt our enterprise to today’s economic environment,” said Reinhard Lange, CEO of Kuehne + Nagel International AG. “Since it remains impossible to predict by when the global economy will recover, we will adhere to our dual strategy of rigorous cost control with a commitment to market share expansion.”