Strong results in spite of currency headwinds
Kuehne + Nagel Group
1st Quarter 2011
1st Quarter 2010
Operational result (EBITDA)
"The good results in the first quarter underline the value of our global logistics capabilities, flexibility and operational efficiency in a market influenced by different economic conditions, political unrest and natural disasters," said Reinhard Lange, CEO of Kuehne + Nagel International AG. "As planned we expanded our activities in all business units while at the same time increasing productivity.”
In seafreight, Kuehne + Nagel increased container volume by 14 per cent while - according to first estimates - the global container market grew between 7 and 8 per cent. Kuehne + Nagel achieved highest growth in the trade lanes to and from Latin America as well as to and from the Middle East. As outlined in its strategy, the Group increased volumes in transpacific and intra-Asian trade lanes. In the first three months of 2011, EBITDA-to-gross profit margin rose from 34.0 per cent in the previous year to 35.9 per cent due to high operational efficiency. EBITDA improved by 15.5 per cent to CHF 112 million.
With a 21 per cent increase in volume, Kuehne + Nagel’s airfreight business again exceeded expectations and outperformed the market, estimated to have grown between 6 and 7 per cent. In all regions, Kuehne + Nagel benefited from its investment in sales and its industry-specific product offering. In particular, Kuehne + Nagel’s expansion of the specialised network for perishables yielded results. Following the acquisitions in South America, volumes significantly increased in this segment. Double-digit growth was also achieved in worldwide exports for the automotive industry. Due to the above-market average volume growth and increased productivity EBITDA-to gross profit margin improved from 28.7 to 32.3 per cent. The operational result rose by 28.6 per cent to CHF 63 million.
Road & Rail Logistics
Kuehne + Nagel gained market share in the European overland business as well. Net invoiced turnover increased by 15.1 per cent (currency adjusted) exceeding market growth of 6 per cent. EBITDA remained stable on last year’s level, despite continuous price pressure, fierce competition and investments into the expansion of the European groupage network and its full and part load activities. EBITDA margin decreased from 2.2 to 1.9 per cent. The results of the recently acquired RH Freight, United Kingdom, a company specialised in European groupage activities, will be consolidated as of April 2011.
In the contract logistics business unit net invoiced turnover rose by 7.9 per cent (currency adjusted). New business wins contributed to a reduction of idle space from 12 to 7 per cent compared with the previous year's first quarter. However, start-up costs for various new projects negatively impacted EBITDA, which was 8.9 per cent below the preceding year. EBITDA margin declined from 4.2 to 3.9 per cent. Measures have been implemented to improve productivity.
Reinhard Lange: "It is difficult to forecast the world economic development in the months to come. We are confident that our resilient integrated business model will support the continuation of our strong performance.”