The company held the AGM in accordance with Art. 6a of the Swiss Ordinance on Measures to Combat the Coronavirus (COVID-19) of the Swiss Federal Council. The independent proxy represented 80,85% of the voting shares. Having been granted access to audit reports, shareholders approved the status report, the financial statements and the consolidated financial statements for the 2019 business year and agreed to carry forward 2019 retained earnings to new account.

Additionally, the AGM granted discharge to the Board of Directors and the Management Board for the 2019 business year.

Elections

Board of Directors

Dr. Renato Fassbind, Karl Gernandt, David Kamenetzky, Klaus-Michael Kühne, Hauke Stars, Dr. Martin Wittig and Dr. Joerg Wolle were re-elected individually for one-year terms until completion of the next AGM.

Dr. Thomas Staehelin, whose mandate as a member of the Board of Directors ends at the Annual General Meeting after 42 years of service, did not stand for re-election. On behalf of the Board of Directors, both the Honorary Chairman, Klaus-Michael Kühne, and the Chairman of the Board of Directors, Dr. Joerg Wolle, thanked Dr. Staehelin for his "impressive, extremely successful, decades-long and very valuable work on the Board of Directors and, above all, as Chairman of the Audit Committee". From among its members Dr. Martin Wittig will follow him as Chairman of the Audit Committee.

Dominik Bürgy, a Swiss Citizen, was newly elected to the Board of Directors for the same term.

Chairman of the Board of Directors

By an overwhelming majority of votes, Dr. Joerg Wolle was re-elected as Chairman of the Board of Directors for a further one-year term of office.

Compensation Committee

Shareholders followed the Board of Directors’ recommendation to re-elect Karl Gernandt, Klaus-Michael Kühne and Hauke Stars to the Compensation Committee for another one-year term until completion of the next AGM. Karl Gernandt remains Chairman of this Committee.

Independent Proxy / Statutory Auditor

Investarit AG, Zurich, was elected as independent proxy; the mandate of Ernst & Young AG as statutory auditor for the year 2020 was approved by the AGM.

Authorised Capital

Shareholders voted with the necessary majority for the renewal of the Board of Director’s right to establish authorised capital (revision of Articles of Association) until 5 May 2022.

Remuneration Report

In a consultative vote, shareholders approved the Renumeration Report 2019 by a large majority.

Votes on Remuneration

The total maximum amount of remuneration for the members of the Board of Directors was prospectively approved according to the legal requirements, covering the period until the end of the AGM. In a separate vote, shareholders confirmed the total maximum amount of remuneration for the Management Board, covering the next business year 2021.

The next AGM will be held on May 4, 2021.

Due to the uncertainties surrounding the further development of the COVID-19 pandemic and the current economic environment, the Board of Directors will propose to the Annual General Meeting 2020 to carry forward the retained earnings for the period ending December 31, 2019 to new account and not to resolve a dividend at this Annual General Meeting. Kuehne + Nagel thus further strengthens an already robust level of liquidity, adding support to the company's overall financial position in view of the uncertainties stemming from the present crisis.

The Board of Directors continuously reviews the development of the global economic situation and Kuehne + Nagel's business performance. Should the business environment normalise over the course of the year, the Board of Directors may contemplate to convene an Extraordinary General Meeting in the second half of the year to resolve on a distribution of a dividend payment.

Previously, Bürgy was a long-standing partner and member of the management board of Ernst & Young Switzerland as well as Managing Partner Tax & Legal Switzerland. Additionally, he was a member of the Tax Leadership team (Germany, Austria, and Switzerland) and People Partner Tax with HR responsibility. His activities included in particular the management of global mandates in more than 70 countries.

Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG, says: „On behalf of the Board of Directors, I would like to cordially thank Dr. Staehelin for his extremely successful, long-standing and very valuable contribution to the Board of Directors and as Chairman of the Audit Committee of Kuehne + Nagel International AG.

We are glad to have Mr. Bürgy as an expert with a well-connected network being proposed for the election to the Board of Directors.”

The first bond has a fixed coupon of 0.02% and a tenor of 3 years 5 months, maturing on November 18, 2022. The second bond has a fixed coupon of 0.20% and a tenor of 6 years, maturing on June 18, 2025.

“These bond issues allow Kuehne + Nagel to benefit from the current attractive interest rates and to optimise the financing structure while enhancing our strategic flexibility. We see it as an additional opportunity to engage with the Swiss Capital Market to support our strategy”, says Markus Blanka-Graff, CFO Kuehne + Nagel International AG.

Disclaimer
Prospective investors are strongly requested to consult their investment advisors.

This press info is not intended to, and does not, constitute, represent or form part of any offer, invitation or solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

This press info is not for distribution in the United States of America or to U.S. persons. Further restrictions apply, in particular, in the European Economic Area, in the United Kingdom and in Italy. Each investor domiciled in another jurisdiction than Switzerland who takes notice of this press release, must therefore make himself familiar about any restrictions and consequences which might be applicable due to the relevant law of such other jurisdiction.

Shareholders approved the status report, the financial statements and the consolidated financial statements for the 2018 business year after having taken cognisance of audit reports and followed the Board of Director’s proposal of a dividend of CHF 6.00 gross per share. Payout is scheduled from May 13, 2019 onwards. Additionally, the Annual General Meeting granted discharge to the Board of Directors and the Management Board for the 2018 business year.

Elections
Board of Directors
Dr. Renato Fassbind, Karl Gernandt, Klaus-Michael Kuehne, Dr. Thomas Staehelin, Ms. Hauke Stars, Dr. Martin Wittig and Dr. Joerg Wolle were re-elected individually for one-year terms until completion of the next Annual General Meeting.

Jürgen Fitschen and Hans Lerch, whose mandates after eleven respectively fourteen years of service as members of the Board of Directors ended with the Annual General Meeting, no longer stood for re-election. The Board of Directors, thanked both retiring members for their successful and longstanding contributions within the Board.

David Kamenetzky, a German and Swiss Citizen, was newly elected to the Board of Directors for the same term.

Chairman of the Board of Directors
With an overwhelming majority of votes Dr. Joerg Wolle was re-elected as Chairman of the Board of Directors for the above mentioned term.

Compensation Committee
Shareholders followed the Board of Directors’ recommendation to re-elect Karl Gernandt and Klaus-Michael Kuehne to the Compensation Committee for another one-year term until completion of the next Annual General Meeting. Ms. Hauke Stars was newly elected to the Compensation Committee for the above mentioned term.

Independent Proxy / Statutory Auditor
Investarit AG, Zurich, was elected as independent proxy; the mandate of Ernst & Young AG as Statutory Auditor for the year 2019 was approved by the Annual General Meeting.
 

Remuneration Report
In a consultative vote the shareholders endorsed the 2018 Remuneration Report.

Votes on Remuneration
The total maximum amount of remuneration for the members of the Board of Directors was prospectively approved according to the legal requirements, covering the period until the end of the next Annual General Meeting. In a separate vote, shareholders confirmed the total maximum amount of remuneration for the Management Board, covering the next business year 2020.
 

The next Annual General Meeting will be held on Tuesday, May 5, 2020.

Die Aktionärinnen und Aktionäre genehmigten den Lagebericht und die Konzernrechnung sowie die Jahresrechnung für das Geschäftsjahr 2018 nach Kenntnisnahme der Revisionsberichte und stimmten einer ordentlichen Dividende von CHF 6,00 brutto pro Aktie zu. Die Auszahlung wird ab dem 13. Mai 2019 erfolgen. Zudem erteilte die Generalversammlung den Mitgliedern von Verwaltungsrat und Geschäftsleitung für das Geschäftsjahr 2018 Entlastung.

Wahlen
Verwaltungsrat
Dr. Renato Fassbind, Karl Gernandt, Klaus-Michael Kühne, Dr. Thomas Staehelin, Frau Hauke Stars, Dr. Martin Wittig und Dr. Jörg Wolle stellten sich der Wiederwahl und wurden von der Generalversammlung einzeln für eine weitere Amtsperiode von einem Jahr bis zum Abschluss der nächsten ordentlichen Generalversammlung bestätigt.

Jürgen Fitschen und Hans Lerch, deren Mandate als Mitglieder des Verwaltungsrats nach elf- beziehungsweise vierzehnjähriger Zugehörigkeit mit der Generalversammlung endeten, stellten sich nicht mehr zur Wiederwahl. Der Verwaltungsrat dankte beiden ausscheidenden Mitgliedern herzlich für ihre erfolgreiche und langjährige Arbeit im Verwaltungsrat.

David Kamenetzky, Deutscher und Schweizer Staatsbürger, wurde neu für die gleiche Amtsperiode in den Verwaltungsrat gewählt.

Verwaltungsratspräsident
Mit überwältigender Mehrheit der Stimmen wurde Dr. Jörg Wolle als Präsident des Verwaltungsrats für eine weitere Amtsdauer von einem Jahr bestätigt.

Vergütungsausschuss
Die Aktionäre folgten dem Antrag des Verwaltungsrats, Karl Gernandt und Klaus-Michael Kühne für eine weitere einjährige Amtsperiode bis zum Abschluss der nächsten ordentlichen Generalversammlung in den Vergütungsausschuss zu wählen. Für denselben Zeitraum wurde Frau Hauke Stars neu in den Vergütungsausschuss gewählt.

Unabhängiger Stimmrechtsvertreter / Revisor
Als unabhängiger Stimmrechtsvertreter wurde die Investarit AG, Zürich, für ein Jahr bis zum Abschluss der nächsten ordentlichen Generalversammlung gewählt; Revisor für das Jahr 2019 ist die Ernst & Young AG, Zürich.
 

Vergütungsbericht
In einer konsultativen Abstimmung hiessen die Aktionäre den Vergütungsbericht 2018 gut.

Vergütungsabstimmungen
Prospektivisch wurde der maximale Gesamtbetrag der Vergütung für die Mitglieder des Verwaltungsrats entsprechend der gesetzlichen Vorgaben für die Periode bis zur nächsten Generalversammlung genehmigt. Ebenso bestätigten die Aktionäre den maximalen Gesamtbetrag der Vergütung für die Mitglieder der Geschäftsleitung in Bezug auf das nächste Geschäftsjahr 2020.
 

Die nächste ordentliche Generalversammlung findet am Dienstag, den 5. Mai 2020 statt.

Dr. Detlef Trefzger, CEO der Kühne + Nagel International AG: „Kühne + Nagel hat die dynamische Entwicklung des ersten Halbjahres auch im dritten Quartal fortgesetzt und in den ersten neun Monaten des Geschäftsjahrs ein sehr positives Ergebnis erzielt. Besonders erfreulich ist weiterhin die Entwicklung in den Geschäftsbereichen Seefracht, Luftfracht und Landverkehre. In der Kontraktlogisitik belasten die im laufenden Jahr plangemäss getätigten Investitionen in die operativen Systeme das Ergebnis, das erwartungsgemäss unterhalb des Vorjahresniveaus liegt. Vor dem Hintergrund der sehr guten ersten neun Monate rechnen wir mit einem insgesamt erfreulichen Jahr 2018.“

Seefracht
Mit einem Wachstum von 8,8 Prozent steigerte Kühne + Nagel die Volumen in der Seefracht mehr als doppelt so stark wie der Gesamtmarkt. In den ersten neun Monaten wickelte das Unternehmen 3,519 Mio. Standardcontainer (TEU) und damit 284.000 mehr als im selben Zeitraum des Vorjahres ab. Massgebliches Neugeschäft wurde wiederum mit digitalen End-to-End-Lösungen gewonnen. Die beiden in 2018 gestarteten digitalen Plattformen KN ESP und SeaExplorer werden im Markt intensiv nachgefragt. In der Seefracht erzielte Kühne + Nagel in den ersten neun Monaten des Geschäftsjahrs bei insgesamt stabilisierten Margen ein EBIT in Höhe von CHF 324 Mio., was einem Anstieg um 5,2 Prozent entspricht. Die Rohertrags-Rendite lag bei 29,0 Prozent und damit weiterhin auf einem in der Branche führenden Level.

Luftfracht
Die Luftfracht blieb in den ersten neun Monaten 2018 auf Erfolgskurs und setzte ihre starke Entwicklung der vergangenen Quartale fort. Mit 1.302 Mio. Tonnen konnte die Tonnage um 16,0 Prozent gesteigert werden und lag damit erneut deutlich über dem Marktwachstum. Zu dieser Steigerung trugen branchenspezifische End-to-End-Lösungen in besonderem Masse bei. Mit der vor kurzem erfolgten Akquisition des Geschäfts von Panatlantic, eines auf Luftfracht-Dienstleistungen im Bereich Perishables spezialisierten ecuadorianischen Unternehmens, stärkt Kühne + Nagel sein Netzwerk in diesem Segment weiter, nachdem das Unternehmen bereits die Integration von CFI Commodity Forwarders, des führenden Anbieters von Perishables-Dienstleistungen in den USA, erfolgreich abgeschlossen hatte. Der EBIT stieg gegenüber dem Vorjahreszeitraum um 19,4 Prozent auf CHF 271 Mio. Die Rohertrags-Rendite bleibt mit 30,3 Prozent auf einem hohen Niveau.

Landverkehre
Auch bei den Kühne + Nagel-Landverkehren setzte sich die positive Entwicklung fort. Verglichen mit dem Vorjahreszeitraum stieg der Nettoumsatz um 16,2 Prozent, während der Rohertrag um 15,6 Prozent zulegte. Der EBIT verbesserte sich gegenüber dem Vorjahr um 58,3 Prozent auf CHF 57 Mio. Zu diesem starken Ergebnis trugen das US-amerikanische Intermodalgeschäft, das vom steigenden Ölpreis profitierte, sowie die dynamische Geschäftsentwicklung in Europa und hier insbesondere in Deutschland und Grossbritannien bei.

Kontraktlogistik
Mit einem Anstieg des Nettoumsatzes um 10,6 Prozent und des Rohertrags um 10,7 Prozent wuchs die Kontraktlogistik deutlich stärker als der Markt. Besonders gut entwickelte sich das Geschäft in Nordamerika, Asien und Deutschland sowie im Bereich E-Commerce-Fulfilment. Die im laufenden Jahr plangemäss getätigten Investitionen in die operativen Systeme belasteten das Ergebnis, das mit CHF 93 Mio. erwartungs-gemäss unterhalb des Vorjahresniveaus liegt. Mit der erfolgreichen Einführung eines neuen digitalen Warehouse-Management-Systems und weiterer digitaler End-to-End-Lösungen wurden wichtige Meilensteine in der Kontraktlogistik erreicht. Zudem vereinbarte Kühne + Nagel die Übernahme einer chinesischen Automobillogistikgruppe und eines lokalen indonesischen Logistikunternehmens.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “Kuehne + Nagel has continued its dynamic performance from the first half of the year into the third quarter and achieved a very positive result for the first nine months of 2018. The performance in the business units seafreight, airfreight and overland is remarkable. In contract logistics, results are as expected negatively affected by investments in the operation platform, which have been realised according to plan in this year. Based on the very good results of the first nine months, we expect this year to close successfully.”

Seafreight
In seafreight, Kuehne + Nagel increased the volume by 8.8 percent and thus grew twice as fast as market. In the first nine months of the year the company shipped 3.519 million standard containers (TEU), 284,000 more than in the same period of the previous year. A substantial amount of new business was gained with digital end-to-end solutions, with high demand on the market for the two digital platforms KN ESP and SeaExplorer, launched in 2018. EBIT for the first nine months of the year was up 5.2 percent at CHF 324 million with stable margins. The conversion rate of 29.0 percent remains a leading mark in the industry.

Airfreight
Airfreight stayed en route for success in the first nine months of 2018 and continued its strong performance from the previous quarters. Tonnage increased by 16.0 percent to 1,302 million tonnes, therewith well above market growth with major contributions from industry-specific end-to-end solutions. With the recent acquisition of Panatlantic’s business, a perishables airfreight specialist in Ecuador, Kuehne + Nagel continues to strengthen its network in this segment after successfully completing the integration of CFI Commodity Forwarders, the leading perishables provider in the USA. EBIT was up 19.4 percent against the same period of the previous year at CHF 271 million. The conversion rate remained high at 30.3 percent.

Overland
Success continued in Kuehne + Nagel overland with a net turnover growth of 16.2 percent compared with the same period of the previous year whilst gross profit increased by 15.6 percent. EBIT improved 58.3 percent over the previous year to CHF 57 million. This strong performance was driven by the US intermodal business, benefiting from the increase in oil prices, and dynamic business development in Europe, particularly in Germany and the UK.

Contract logistics
Growth in contract logistics was well above the market with net turnover increasing by 10.6 percent and gross profit by 10.7 percent. Business performance developed well in North America, Asia and Germany and with e-commerce fulfilment solutions. Results are negatively affected by investments in the operation platform, which have been made according to plan in this year. At CHF 93 million EBIT was as expected below the previous year’s level. Key milestones in contract logistics were reached with the successful launch of a new digital warehouse management system and leading digital end-to-end solutions. Furthermore, Kuehne + Nagel agreed on the acquisition of a Chinese automotive logistics group and a local Indonesian logistics company.

Dr. Detlef Trefzger, CEO der Kühne + Nagel International AG: „Wir sind fest davon überzeugt, dass nachhaltiges Handeln die Voraussetzung für wirtschaftlichen Erfolg ist. Nachhaltigkeit ist daher bei Kühne + Nagel schon seit langem ein integraler Bestandteil unserer Geschäftspolitik. Wir beobachten und evaluieren regelmässig die wirtschaftlichen, sozialen und ökologischen Auswirkungen unseres Handelns. Die Aufnahme in den SXI Switzerland Sustainability 25 Index ist für uns Bestätigung und Ansporn zugleich.“

Die Nachhaltigkeitsstrategie von Kühne + Nagel zielt darauf ab, Transport- und Lagerlogistikaktivitäten so effizient wie möglich zu gestalten und unnötige Transporte zu vermeiden. Durch den Einsatz innovativer Technologien, von Big Data und Preditictive Analytics optimiert Kühne + Nagel die weltweiten Lieferketten von Kunden und gestaltet diese somit auch nachhaltiger. Mit spezifischen Lösungen erleichtert Kühne + Nagel es seinen Kunden zudem, ihre eigenen Nachhaltigkeitsziele zu erreichen. So legt das Unternehmen als erster Logistikdienstleister bereits seit 2017 CO₂-Emissionen auf sämtlichen Seefracht-Rechnungen offen. Damit können Kunden ihre Transporte mit Blick auf die CO₂-Bilanz messen und optimieren.

Kühne + Nagel erstellt jährlich einen Nachhaltigkeitsbericht nach international anerkannten Standards. Der Nachhaltigkeitsbericht 2017 wurde vor wenigen Wochen veröffentlicht.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: „We are firmly convinced that sustainable behavior lays the foundation for economic success. Sustainability is therefore since long an integral part of our business activities. We continuously monitor and evaluate the economic, social and ecological impacts of our activities. The admission to the SXI Switzerland Sustainability 25 Index is both a confirmation and an incentive for us.“

Kuehne + Nagel’s sustainability strategy aims at making transport and warehousing activities as efficient as possible and avoiding unnecessary transportations. By deploying innovative technologies, big data and predictive analytics Kuehne + Nagel further optimises the global supply chains of the customers, thus making them more sustainable. With tailor-made solutions, Kuehne + Nagel supports the customers in achieving their own sustainability goals. In May 2017, the company was the first logistics provider to disclose the associated carbon dioxide emissions on all seafreight invoices. This allows customers to monitor the CO₂ emissions and reduce the environmental impact of their transport chains.

Kuehne + Nagel issues an annual sustainability report in accordance with internationally recognized standards. The 2017 Sustainability Report was launched a couple of weeks ago.

Die Aktionärinnen und Aktionäre genehmigten den Lagebericht und die Konzernrechnung sowie die Jahresrechnung für das Geschäftsjahr 2017 und stimmten einer ordentlichen Dividende von CHF 5,75 brutto pro Aktie zu. Die Auszahlung wird ab dem 15. Mai 2018 erfolgen. Zudem erteilte die Generalversammlung den Mitgliedern von Verwaltungsrat und Geschäftsleitung für das Geschäftsjahr 2017 Entlastung.

Wahlen

Verwaltungsrat
Sämtliche Verwaltungsräte der Kühne + Nagel International AG – namentlich Dr. Renato Fassbind, Jürgen Fitschen, Karl Gernandt, Klaus-Michael Kühne, Hans Lerch, Dr. Thomas Staehelin, Frau Hauke Stars, Dr. Martin Wittig und Dr. Jörg Wolle – wurden von der Generalversammlung einzeln für eine weitere Amtsperiode von einem Jahr bis zum Abschluss der nächsten ordentlichen Generalversammlung bestätigt.

Verwaltungsratspräsident
Für denselben Zeitraum wurde Dr. Jörg Wolle mit überwältigender Mehrheit der Stimmen als Präsident des Verwaltungsrats wiedergewählt.

Vergütungsausschuss
Die Aktionäre folgten dem Antrag des Verwaltungsrats, Karl Gernandt, Klaus-Michael Kühne und Hans Lerch für eine weitere einjährige Amtsperiode bis zum Abschluss der nächsten ordentlichen Generalversammlung in den Vergütungsausschuss zu wählen.

Unabhängiger Stimmrechtsvertreter / Revisor
Als unabhängiger Stimmrechtsvertreter wurde Kurt Gubler, Investarit AG, Zürich, für ein weiteres Jahr bis zum Abschluss der nächsten ordentlichen Generalversammlung bestätigt; Revisor für das Jahr 2018 ist die Ernst & Young AG, Zürich.

Weiterführung genehmigtes Kapital (Statutenänderung)
Die Aktionäre stimmten mit der Neufassung von Art. 3.3. Abs. 1 der Statuten der Weiterführung des genehmigten Kapitals bis 8. Mai 2020 zu.
 

Vergütungsbericht

In einer konsultativen Abstimmung hiessen die Aktionäre den Vergütungsbericht 2017 gut.
 

Vergütungsabstimmungen

Prospektivisch wurden die maximalen Gesamtvergütungen für die Mitglieder des Verwaltungsrats entsprechend der gesetzlichen Vorgaben für die Periode bis zur nächsten Generalversammlung genehmigt. In gleicher Weise bestätigten die Aktionäre den maximalen Gesamtbetrag für die Mitglieder der Geschäftsleitung in Bezug auf das Geschäftsjahr 2019.

Die nächste ordentliche Generalversammlung findet am 7. Mai 2019 statt.

Shareholders approved the status report, the financial statements and the consolidated financial statements for the 2017 business year and followed the Board of Director’s proposal of a dividend of CHF 5.75 gross per share. Payout is scheduled from May 15, 2018 onwards. Additionally, the Annual General Meeting granted discharge to the Board of Directors and the Management Board for the 2017 business year.

Elections

Board of Directors
All members of the Board of Directors – namely Dr. Renato Fassbind, Juergen Fitschen, Karl Gernandt, Klaus-Michael Kuehne, Hans Lerch, Dr. Thomas Staehelin, Ms. Hauke Stars, Dr. Martin Wittig and Dr. Joerg Wolle – were re-elected individually for one-year terms until completion of the next Annual General Meeting.

Chairman of the Board of Directors
With an overwhelming majority of votes Dr. Joerg Wolle was re-elected as Chairman of the Board of Directors for the above mentioned term.

Compensation Committee
Shareholders followed the Board of Directors’ recommendation to re-elect Karl Gernandt, Klaus-Michael Kuehne and Hans Lerch to the Compensation Committee for another one-year term until completion of the next Annual General Meeting.

Independent Proxy / Statutory Auditor
Kurt Gubler, Investarit AG, Zurich, was confirmed as independent proxy; the mandate of Ernst & Young AG as Statutory Auditor for the year 2018 was also approved by the Annual General Meeting.

Maintenance of Authorized Share Capital
(Change of Articles of Association)
Shareholders approved the maintenance of the authorized share capital until 8. Mai 2020, including the revision of Article 3.3 (1) of the Articles of Association.
 

Remuneration Report

In a consultative vote the shareholders endorsed the 2017 Remuneration Report.
 

Votes on Remuneration

The total maximum amount of remuneration for the members of the Board of Directors was prospectively approved according to the legal requirements, covering the period until the end of the next Annual General Meeting. In a separate vote, shareholders confirmed the total maximum amount of remuneration for the Management Board, covering the business year 2019.

The next Annual General Meeting will be held on May 7, 2019.

 2017

2016

Kuehne + Nagel International AG

 2017

2016

* Proposal to the Annual General Meeting on May 8, 2018
 

Schindellegi / CH, February 28, 2018 – The Kuehne + Nagel Group increased its growth momentum from quarter to quarter in 2017 and achieved new record highs in turnover, gross profit and earnings for the year.
 

Dr. Detlef Trefzger, CEO, Kuehne + Nagel International AG: “2017 was another successful year for the Kuehne + Nagel Group. The consistent implementation of our business strategies resulted in strong volume growth and a clear increase in gross profit. Once again, our integrated business model has shown it’s strength: The effects of difficult market conditions in one business unit were more than compensated by increased profitability in the other divisions. With our digital solutions we further increased efficiency and improved customer value at the same time. Highlights from the past business year include the seamless integration of four acquisitions which strengthen our leading position in perishables as well as pharma and healthcare logistics. Our new strategic programme is setting the course for the future success of our Group with technology- and data-based solutions”.
 

Development of the business units

Seafreight
In seafreight, Kuehne + Nagel increased volumes by 7.5 per cent and further extended its market share. The company handled 4.4 million TEU, about 300,000 more than in the previous year, confirming its leading global position. Kuehne + Nagel realised particularly strong volume increases in the intra-Asian und US trade lanes. Other growth drivers were the reefer container business with a rise in volumes of 25 per cent, and the Less-than-Container Load (LCL) operations, where for the first time over 2 million cubic metres were handled. Consolidation in the container shipping market once again accelerated in 2017. In many trade lanes rate increases occurred, which could only be passed on to the customers partly and with delay, especially in the first two quarters. Kuehne + Nagel’s growth in volume and productivity did not fully compensate for the margin pressure. EBIT declined by 7.0 per cent in comparison to the previous year, whereby the EBIT-to-gross profit margin (conversion rate) was maintained at an industry leading high level with 29.2 per cent.

Airfreight
Airfreight delivered an outstanding performance in 2017. Kuehne + Nagel increased tonnage by 20.4 per cent, growing twice as fast as the overall market, which itself showed the highest increase since 2010 at around 10 per cent. Kuehne + Nagel’s industry-specific airfreight solutions, for example for the pharma and healthcare or the aerospace sectors, generated significant growth. The company strengthened its leading global market position in perishables logistics with the acquisition and integration of two national market leaders in Kenya and the USA. Strong volume growth in combination with strict cost control and higher productivity resulted in an increase in EBIT by 5.0 per cent. With 30.2 per cent, the conversion rate remained at the previous year’s high level.

Overland
The consistent implementation of Kuehne + Nagel’s market strategy in overland led again to excellent results. Net turnover increased by 7.6 per cent and gross profit by 6.4 per cent. EBIT improved by 75.0 per cent compared to the previous year. The high volume increases in groupage, full truckload and intermodal operations as well as the specific services for customers from the pharma and healthcare industry and the e-commerce market contributed to the strong improvement in results.

Contract Logistics
Specialised, scalable end-to-end solutions and data-driven processes across complex supply chains again proved to be key success factors in contract logistics in 2017. Kuehne + Nagel gained significant new business and expanded the scope of services for customers particularly from the automotive, high-tech, aerospace, pharma and healthcare industries and e-commerce. The acquisition and integration of two leading pharma logistics providers in Italy and Turkey increased growth momentum in Kuehne + Nagel’s pharma logistics sector. New record highs were set: Net turnover increased by 7.8 per cent, gross profit by 10.5 per cent and EBIT improved by 9.5 per cent. Kuehne + Nagel has 10.6 million square metres of warehousing and logistics space under management, 600,000 more than in the previous year.

Net Turnover
The Kuehne + Nagel Group achieved a net turnover of CHF 18,594 million in 2017, an increase of 12.5 per cent compared to the previous year. This was due to rate increases in sea and airfreight and strong volume growth across all business units.
Net turnover increased by 14.2 per cent in the Americas, by 12.9 per cent in Asia-Pacific and by 11.8 per cent in EMEA.

Gross Profit
Gross profit, the better performance indicator for a logistics company than turnover, was at CHF 7,023 million, 7.2 per cent higher than in the previous year.
Gross profit improved by 9.1 per cent in the Americas, by 6.8 per centin Asia-Pacific and by 6.8 per cent in EMEA.

EBITDA
Earnings before interest, tax, depreciation, amortisation and impairmentof property, plant and equipment, goodwill and other intangible assets (EBITDA) increased by 3.6 per cent to CHF 1,150 million compared to the previous year.
EMEA generated the largest EBITDA contribution with CHF 675 million (58.7 per cent), followed by the Americas with CHF 246 million (21.4 per cent) and Asia-Pacific with CHF 229 million (19.9 per cent).

EBIT
In 2017, earnings before interest and tax (EBIT) improved by CHF 19 million to CHF 937 million. The Group’s EBIT margin was at 5.0 per cent. EMEA contributed CHF 523 million (55.8 per cent) to the Group's EBIT, followed by the Americas with a contribution of CHF 204 million (21.8 per cent) and Asia-Pacific with CHF 210 million (22.4 per cent).

Dividend
The Board of Directors will propose a dividend per share of CHF 5.75 (previous year: CHF 5.50) to the Annual General Meeting on May 8, 2018.
 

Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG: “In a demanding and rapidly changing economic environment the Kuehne + Nagel Group has strengthened its position as a leading logistics provider and improved results. The again favourable development in 2017 demonstrates that it is worthwhile to invest in our company. The dynamic market and competitive situation requests the full attention of the Board of Directors and the Management Board. The performance strength and innovative power of the Kuehne + Nagel Group makes us confident for the 2018 business year.”
 

Annual Report 2017
Further information on the 2017 full-year result and the annual report 2017 are published on our website.

Kühne + Nagel-Gruppe

 2017

2016

Kühne + Nagel International AG

 2017

2016

* Vorschlag an die Generalversammlung vom 8. Mai 2018

Schindellegi / CH, 28. Februar 2018 – Von Quartal zu Quartal steigerte die Kühne + Nagel-Gruppe im Geschäftsjahr 2017 ihre Wachstumsdynamik und erzielte beim Umsatz, Rohertrag und Reingewinn neue Bestmarken.
 

Dr. Detlef Trefzger, CEO, Kühne + Nagel International AG: „2017 war ein weiteres erfolgreiches Jahr für Kühne + Nagel. Die konsequente Umsetzung unserer Geschäftsstrategien resultierte in einem starken Volumenwachstum und einer deutlichen Steigerung des Rohertrags. Erneut zeigte sich die Stärke unseres integrierten Geschäftsmodells: Die Auswirkungen schwieriger Rahmenbedingungen in einem Geschäftsbereich konnten durch Profitabilitätsteigerungen in den anderen Sparten mehr als kompensiert werden. Mit unseren digitalen Lösungen gelang es, die Effizienz weiter zu steigern und gleichzeitig den Kundennutzen zu erhöhen. Zu den Highlights im abgelaufenen Geschäftsjahr zählt die reibungslose Integration von vier Akquisitionen, die unsere führende Position in den Bereichen Perishables- sowie Pharma- und Healthcare-Logistik stärken. Unser neues Strategie-Programm stellt mit Lösungen, die auf Technologie und Daten basieren, die Weichen für den zukünftigen Erfolg unserer Unternehmensgruppe.“
 

Entwicklung in den Geschäftsbereichen

Seefracht
In der Seefracht erzielte Kühne + Nagel einen Volumenzuwachs von 7,5 Prozent und baute seine Marktanteile weiter aus. Mit der Abwicklung von 4,4 Millionen Standardcontainern (TEU), rund 300.000 mehr als im Vorjahr, unterstrich das Unternehmen seine global führende Position. Besonders starke Mengenzuwächse realisierte Kühne + Nagel in den innerasiatischen und USA-Relationen. Weitere Wachstumstreiber waren die Kühlcontainerverkehre, die um 25 Prozent anstiegen, und das Sammelladungsgeschäft. Hier wurden erstmals mehr als 2 Millionen Kubikmeter abgewickelt. Im Jahr 2017 beschleunigte sich die Konsolidierung in der Container-Linienschifffahrt noch einmal deutlich. In vielen Fahrtgebieten kam es zu Ratenerhöhungen, die vor allem in den ersten beiden Quartalen nur teilweise und mit Verzögerung an die Kunden weitergegeben werden konnten. Die von Kühne + Nagel erzielten Volumen- und Produktivitätssteigerungen kompensierten den Margendruck nicht vollständig. Der EBIT ging gegenüber dem Vorjahr um 7,0 Prozent zurück, wobei das Verhältnis von EBIT zu Rohertrag, die Conversion Rate, mit 29,2 Prozent weiterhin auf einem hohen und innerhalb der Branche führenden Niveau liegt.

Luftfracht
Die Luftfracht wies im Jahr 2017 ein hervorragendes Ergebnis aus. Kühne + Nagel erhöhte seine Tonnage um 20,4 Prozent und wuchs damit doppelt so stark wie der Gesamtmarkt, der mit etwa 10 Prozent den grössten Anstieg seit 2010 verzeichnete. Deutliches Wachstum erzielte Kühne + Nagel mit industriespezifischen Luftfrachtangeboten etwa für die Pharma- und Healthcare- oder die Luft- und Raumfahrtindustrie. Mit der Übernahme und Integration zweier nationaler Marktführer in Kenia und den USA konnte das Unternehmen seine global führende Rolle in Perishables Logistics weiter stärken. Der überdurchschnittliche Mengenzuwachs zusammen mit einer konsequenten Kostenkontrolle und Produktivitätssteigerungen führte zu einem 5-prozentigen Anstieg des EBIT. Die Conversion Rate blieb mit 30,2 Prozent auf dem hohen Niveau des Vorjahrs.

Landverkehre
Die konsequente Umsetzung der Marktstrategie im Landverkehr führte wiederum zu einem ausgezeichneten Ergebnis. Der Nettoumsatz erhöhte sich um 7,6 Prozent und der Rohertrag um 6,4 Prozent. Der EBIT verbesserte sich gegenüber dem Vorjahr um 75,0 Prozent. Die hohen Volumensteigerungen beim Stückgut, bei den Komplettladungen und bei Intermodalverkehren trugen ebenso zu der starken Ergebnisverbesserung bei wie die industriespezifischen Dienstleistungen für Kunden aus den Bereichen Pharma und Healthcare sowie E-Commerce.

Kontraktlogistik
Spezialisierte und skalierbare End-to-end-Lösungen sowie daten-gesteuerte Prozesse entlang komplexer Supply Chains erwiesen sich 2017 in der Kontraktlogistik erneut als Erfolgsfaktoren. Vor allem bei Kunden aus den Branchen Automobil, Hightech, Luft- und Raumfahrt, Pharma und Healthcare sowie E-Commerce konnte Kühne + Nagel massgebliches Neugeschäft gewinnen oder das Dienstleistungsangebot ausweiten. Die Akquisition und Integration zweier führender Pharmalogistiker in Italien und der Türkei sorgte für zusätzliche Wachstumsdynamik im Bereich Pharma-Logistik. Bei den Kennzahlen wurden neue Bestmarken erreicht: Der Nettoumsatz stieg um 7,8 Prozent, der Rohertrag um 10,5 Prozent und der EBIT um 9,5 Prozent. Für seine Kunden bewirtschaftet Kühne + Nagel 10,6 Millionen Quadratmeter Lager- und Logistikfläche, 600.000 Quadratmeter mehr als im Vorjahr.

Nettoumsatz
Der Nettoumsatz der Kühne + Nagel-Gruppe betrug 2017 CHF 18.594 Mio., was einem Anstieg von 12,5 Prozent gegenüber dem Vorjahr entspricht. Dieser ist auf die Ratenerhöhungen in der See- und Luftfracht und vor allem auf das signifikante Volumenwachstum in allen Geschäftsbereichen zurückzuführen. In der Region Americas (Nord-, Mittel- und Südamerika) stieg der Nettoumsatz um 14,2 Prozent, in der Region Asien-Pazifik um 12,9 Prozent und in der Region EMEA (Europa, Nah-/Mittelost, Zentralasien und Afrika) um 11,8 Prozent.

Rohertrag
Der Rohertrag, die im Gegensatz zum Umsatz aussagefähigere Kennzahl für die Leistungsfähigkeit eines Logistikunternehmens, lag 2017 mit CHF 7.023 Mio. um 7,2 Prozent über dem Vorjahreswert.
In der Region Americas stieg der Rohertrag um 9,1 Prozent an, in der Region Asien-Pazifik um 6,8 Prozent und in der Region EMEA um 6,8 Prozent.

Betriebsgewinn (EBITDA)
Das Ergebnis vor Zinsen, Steuern, Abschreibungen und Wertminderungen auf Sachanlagen, Goodwill und andere immaterielle Vermögenswerte verbesserte sich gegenüber dem Vorjahr um 3,6 Prozent auf CHF 1.150 Mio. Die Region EMEA weist mit CHF 675 Mio. (58,7 Prozent) den grössten Anteil am Betriebsgewinn der Gruppe aus, gefolgt von der Region Americas mit CHF 246 Mio. (21,4 Prozent) und der Region Asien-Pazifik mit CHF 229 Mio. (19,9 Prozent).

Gewinn vor Zinsen und Steuern (EBIT)
2017 konnte der Gewinn vor Zinsen und Steuern (EBIT) um CHF 19 Mio. auf CHF 937 Mio. verbessert werden. Die EBIT-Marge der Gruppe lag bei 5,0 Prozent.
Die Region EMEA trug CHF 523 Mio. (55,8 Prozent) zum EBIT der Gruppe bei, die Region Americas CHF 204 Mio. (21,8 Pozent) und die Region Asien-Pazifik CHF 210 Mio. (22,4 Prozent).

Dividende
Der Verwaltungsrat schlägt der am 8. Mai 2018 stattfindenden Generalversammlung eine Dividende pro Aktie von CHF 5,75 (Vorjahr: CHF 5,50) vor.

Dr. Jörg Wolle, Präsident des Verwaltungsrats der Kühne + Nagel International AG: „In einem anspruchsvollen und sich rasch wandelnden wirtschaftlichen Umfeld hat Kühne + Nagel seine Position als führender Logistikdienstleister gestärkt und sein Ergebnis weiter verbessert. Die wiederum erfreuliche Entwicklung im Jahr 2017 zeigt, dass ein Investment in unser Unternehmen lohnenswert ist. Die dynamische Markt- und Wettbewerbslage fordert Verwaltungsrat und Geschäftsleitung zu höchster Aufmerksamkeit heraus. Die Leistungsstärke und Innovationskraft der Kühne + Nagel-Gruppe stimmen uns zuversichtlich für das Geschäftsjahr 2018.“
 

Geschäftsbericht 2017
Weitere Informationen zum Jahresergebnis 2017 und der Geschäftsbericht 2017 sind auf unserer Webseite veröffentlicht.

Seafreight
With a volume increase of approximately 8 per cent in the first nine months of the year, Kuehne + Nagel confirmed its ability to achieve strong growth in a still demanding market environment. In total, the Group handled 230,000 TEUs more than in the previous year’s period, whereby the strongest volume increases were realised in all US trades. Kuehne + Nagel also achieved double-digit growth in the Latin America trades. The Group significantly improved its leading market position in the reefer container and LCL (Less-than-Container Load) operations. In the third quarter Kuehne + Nagel improved margins through further automation of internal processes, economies of scale and efficient cost management. The EBIT-to-gross profit margin (conversion rate) was at a high level of 29.2 per cent; EBIT reached CHF 308 million.

Airfreight
In the first nine months of the year, Kuehne + Nagel increased volumes by 19 per cent (+180,000 tons), growing more than twice as fast as the market. A key factor for this positive development was the company’s comprehensive offering of industry-specific airfreight solutions. New business was won in the pharmaceutical, high-tech and automotive industries. Perishables logistics continued to develop very successfully, thus further expanding Kuehne + Nagel’s position as the global market leader in this segment. Trillvane, the Kenyan perishables logistics company acquired in July 2017, has been part of the Kuehne + Nagel Group since September 2017. With strict cost control and productivity increases due to process automation Kuehne + Nagel compensated for margin pressure and maintained the conversion rate with 30.3 percent at previous year’s high level. EBIT improved by 3.2 per cent toCHF 227 million.

Overland
Despite seasonal market fluctuations the successful development of the overland business continued in the third quarter. In the first nine months of 2017, net turnover increased by 5.2 per cent and gross profit by 4.6 per cent compared to the previous year’s period. All regions, in particular Europe and North America, contributed to this improvement. The groupage and full truckload shipments as well as industry-specific services were the key drivers for growth. As a result of the consistent and ongoing process optimisation, EBIT increased from CHF 18 million in the previous year’s period to CHF 36 million.

Contract Logistics
In the first nine months of the year, Kuehne + Nagel won a significant amount of new contracts, with business activities in Asia growing dynamically. The acquisition of two specialised pharma logistics companies in Italy and Turkey, which have now been integrated into the Kuehne + Nagel network, enables a further expansion in pharma logistics. E-commerce fulfilment equally performed very strongly. Gross profit increased by 7.7 per cent, the operational result improved by 14.2 per cent compared to the previous year’s period. EBIT increased by 14.0 per centto CHF 114 million.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “With strong volume growth and active cost management we further improved results in the third quarter in line with our expectations. In seafreight a margin improvement was achieved in the third quarter. The airfreight, overland and contract logistics businesses contributed to significant profitability increases. The business development in the first nine months of 2017 confirms our strategic focus on value-creating solutions and makes us confident to reach our profitability targets we have set ourselves for the full business year.”

Changing consumer behaviour and the speed of technological developments are transforming traditional go-to-market approaches and logistics operations. Based on its market knowledge, customer proximity, industry experience and operational excellence Kuehne + Nagel sees promising prospects for strong growth resulting from new dynamics in underlying markets.

With “KN⁺NextGen”, succeeding the “Focus + Excellence” initiatives as of 2018, Kuehne + Nagel will exploit the opportunities offered by digitalisation. Based on its successful business model Kuehne + Nagel’s ambition is to continue to gain substantial market shares in the years to come. In addition, the Group will expand its service offering through new technologies and the creation of data-driven value chain services. Acquisitions have supported the growth initiatives in the past and will be an important option to accelerate the “KN⁺NextGen” programme.

Kuehne + Nagel will provide a webcast of the presentations ofDr. Detlef Trefzger, CEO, and Markus Blanka-Graff, CFO, which are scheduled from 9.30 hrs to 10.30 hrs GMT.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG:"The result of the first half of 2017 is a clear evidence of our growth-oriented business strategy as well as efficient cost management, which enabled us to counter the ongoing pressure on margins in seafreight and airfreight. The remarkable improvements of results in contract logistics and overland are mainly due to the successful implementation of our market strategies. During the second half of the year, we will continue to focus on volume growth, productivity increases and the scaling of industry-specific solutions."
 

Seafreight
With a volume increase of 7.7 per cent in seafreight, Kuehne + Nagel grew faster than the market and, in the first half of 2017, handled over 151,000 TEUs more than in the previous year’s period. Kuehne + Nagel gained market shares in all US trades, both import and export. In the Latin American relations and in the reefer container business double-digit growth rates were realised. At the same time, Kuehne + Nagel further increased productivity and cost efficiency. Margins remained under pressure and below the previous year's level, inter alia due to the fierce competitive environment; however, a slight increase compared to the first quarter has been achieved. The EBIT-to-gross profit margin (conversion rate) was at a high level of28.8 per cent, EBIT amounted to CHF 198 million.

Airfreight
In airfreight, volume growth accelerated in the second quarter. Withan over 18 per cent increase in tonnage in the first half of 2017, Kuehne + Nagel grew about double the market. A strong demand for industry-specific airfreight solutions has made a significant contributionto this positive development. New business was gained particularly inthe pharma, aerospace and perishables industries. Strict cost controland productivity increases due to process automation countered the margin pressure and kept the conversion rate stable at 30.6 per cent, reaching previous year’s high level. With CHF 151 million, EBIT improved by 2.7 per cent compared to the previous year.

Overland
In the overland business, volume and earnings developed very positive. During the first six months of 2017, net turnover increased by 3.3 per cent and gross profit by 3.5 per cent, compared to the previous year. Thiswas driven by higher volumes for groupage, full truckload and intermodal shipments mainly in Europe and the USA, and on the other hand, by a strong order intake for industry-specific services. The increase of EBIT from CHF 17 million in the previous year’s period to CHF 29 million inthe first half of the year 2017 reflects the significant improvement of the operational performance.

Contract Logistics
Customer focus, solutions competence and innovative products led to a substantial increase of new business and the expansion of service offering for existing customers around the globe. Compared to the previous year, an additional 540,000 square meters of warehousing and logistics space were added to operations. Gross profit increased by 6.6 per cent and EBITDA by 10.5 per cent. EBIT improved by 5.7 per cent.

Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG: "The half-year results of 2017 reflect the continuous strength of our Group which makes us confident for its further development despite that seafreight and airfreight markets can be expected to remain demanding and volatile. Kuehne + Nagel remains committed to its proven strategy and continues to invest in growing markets and industry segments. With acquisitions, as the ones announced today, we are ideally complementing our organic growth and strengthen our position in a still fragmented market.”

At today's Annual General Meeting of Kuehne + Nagel International AG, the shareholders present accounted for 83.66 per cent of the voting shares. All proposals were approved by a large majority.

Shareholders approved the situation report, the financial statements and the consolidated financial statements for the 2016 business year and followed the Board of Director’s proposal of a dividend of CHF 5.50 gross per share. Payout is scheduled from May 15, 2017 onwards. Additionally, the Annual General Meeting granted discharge to the Board of Directors and the Management Board for the 2016 business year.
 

Elections

Board of Directors
All members of the Board of Directors – namely Dr. Renato Fassbind, Juergen Fitschen, Karl Gernandt, Klaus-Michael Kuehne, Hans Lerch, Dr. Thomas Staehelin, Ms. Hauke Stars, Dr. Martin Wittig and Dr. Joerg Wolle were re-elected individually for one-year terms until completion of the next Annual General Meeting.

Chairman of the Board of Directors
With an overwhelming majority of votes Dr. Joerg Wolle was re-elected as Chairman of the Board of Directors for the above mentioned term.

Compensation Committee
Shareholders followed the Board of Directors’ recommendation to re-elect Karl Gernandt, Klaus-Michael Kuehne and Hans Lerch to the Compensation Committee for another one-year term until completion of the next Annual General Meeting.

Independent Proxy / Statutory Auditor
Kurt Gubler, Investarit AG, Zurich, was confirmed as independent proxy; the mandate of Ernst & Young AG as Statutory Auditor for the year 2017 was also approved by the Annual General Meeting.
 

Remuneration Report

In a consultative vote the shareholders endorsed the 2016 Remuneration Report.
 

Votes on Remuneration

The total maximum amount of remuneration for the members of the Board of Directors was prospectively approved according to the legal requirements, covering the period until the end of the next Annual General Meeting. In a separate vote, shareholders confirmed the total maximum amount of remuneration for the Management Board, covering the business year 2018.

The next Annual General Meeting will be held on May 8, 2018.

Seafreight
In seafreight Kuehne + Nagel increased volumes by 9 per cent to over 1 million TEU and thus grew more than twice as fast as the overall market. The Group gained significant market shares in almost all trade lanes, particularly in the transatlantic and transpacific relations. Kuehne + Nagel's customer information system, KN Login, proved to be a decisive success factor for winning new business. At the same time, cost efficiency further increased. Margins continued to remain under pressure and thus were under the previous year's level, however, stable compared to the fourth quarter 2016. With 27.6 per cent the EBIT-to-gross profit margin (conversion rate) was at a solid level, EBIT amounted to CHF 93 million.

Airfreight
Kuehne + Nagel’s solution-oriented, industry-specific offering in airfreight, combined with stronger market demand, resulted in a considerable growth in the first quarter 2017: volumes increased by 15.5 per cent to 350,000 tons. Customers rely on Kuehne + Nagel's competence and service quality, whereby strong growth was particularly achieved in the industry sectors pharma and perishables, as well as e-commerce. Effective cost control and digitalisation of the internal processes helped to keep both the conversion rate with 29.9 per cent and the EBIT with CHF 72 million at high levels.

Overland
Kuehne + Nagel's overland business continues to expand. In the first three months of 2017, clearly exceeding market growth, turnover increased by 5.0 per cent compared to the previous year. Higher volumes in the groupage, full truckload and intermodal businesses and the increased demand for industry-specific solutions, particularly for the pharma and the expo & event sectors contributed to the positive development. Continuous process automation supported the improvement of the operational performance resulting in a 75.0 per cent EBIT increase.

Contract Logistics
Growth in contract logistics accelerated through customer focus, solution competence, innovative services and digitalised processes. In the first three months of 2017, net turnover increased by 6.8 per cent. New business was won in the fields of e-commerce and pharma. The acquisition of two specialised pharma logistics companies will generate additional growth. EBIT rose by 12.1 per cent, and the EBIT margin increased from 3.1 per cent in the previous year to 3.3 per cent, whereby it must be noted, that in the first quarter 2016 a positive one-off effect of CHF 8 million was recorded pertaining to a profit of sale of real estate.
 

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “The good result in the first quarter 2017 supports our optimistic outlook for a continued successful business development this year. In seafreight and airfreight we are experiencing strong growth and have gained significant market shares. This increase in volume and productivity as well as cost control mitigated the ongoing pressure on margins. Our strategic approach for overland and contract logistics led to a further improvement of results. We have established a good basis for the second half of 2017.”

Dr. Detlef Trefzger, CEO, Kuehne + Nagel International AG: “We set ourselves ambitious targets for 2016 and we are pleased of having achieved them and to report a new record result. In a market environment characterised by multiple challenges, we were successful with our focus on customer requirements, our solution-oriented approach and our balanced service portfolio. In all business units we gained market shares while further increasing overall profitability. Thanks to our portfolio of scalable industry-specific end-to-end solutions and our operational efficiency, we are well positioned for continued profitable growth, which we will accelerate by selected acquisitions.”

Development of the business unitsSeafreight
In 2016, the number of TEU handled by Kuehne + Nagel exceeded the 4 million mark for the first time. With a volume increase of 6.1 per cent, the Group grew twice as fast as the market. The Less-than-Container Load (LCL) volume increase and the successful development of the reefer container business are to be emphasised. Renowned customers from the pharmaceutical and healthcare industry rely on Kuehne + Nagel when it comes to handling their temperature-sensitive products. Kuehne + Nagel was not able to fully avoid the effects of the ongoing shipping crisis, which became apparent in 2016 above all in terms of historically low freight rates and pressure on margins, as well as the weak development in the oil and gas industry. Despite productivity increases, EBIT declined by 3.1 per cent in comparison to the previous year, whereby the EBIT-to-gross profit margin (conversion rate) could be maintained at an industry leading high level with 31.4 per cent.

Airfreight
Airfreight delivered a very pleasing performance. In a volatile international airfreight market with growth only picking up in the fourth quarter, Kuehne + Nagel increased tonnage by 4.3 per cent to 1,304,000 tons, therewith expanding its position as number 2 among the global airfreight providers. Its focus on industry-specific airfreight solutions such as KN EngineChain, a specialised service package for production and spare parts logistics as well as the maintenance of aircraft engines, was a key success factor. Kuehne + Nagel's leading solution for temperature-sensitive goods, pharmaceutical or perishable products, generated significant new business. The improved margins and operational efficiency led to further growth in profitability. The conversion rate increased from 29.3 per cent in the previous year to 30.9 per cent. The EBIT improved by 12.5 per cent in comparison to the previous year.

Overland
Kuehne + Nagel increased net turnover in 2016 by 11.9 per cent due to the systematic expansion of the overland activities within and outside Europe. Following the integration of the United States overland transport provider ReTrans, which has been part of the Group since 2015, Kuehne + Nagel customers in North America benefit from intermodal transport services. Overland activities were increasingly integrated into industry solutions provided by the other business units. The increase in gross profit by 7.3 per cent as well as the improvement of the operational performance resulted in a significantly higher EBIT.

Contract Logistics
Focusing on specialised end-to-end solutions for industries such as automotive, e-commerce, high-tech, consumer goods, aerospace, pharmaceuticals and healthcare again resulted in new business wins with a subsequent rise in net turnover by 5.7 per cent in constant currencies. In 2016, more than 100 new logistics projects were implemented for customers; the Group now managing more than 10 million square metres of warehousing and logistics space. The attractiveness of the service portfolio and the quality of implementation as well as continuous process improvement led to a considerable EBIT increase of 23.5 per cent.

Net Turnover
After customs, duties and taxes, the Kuehne + Nagel Group achieved a net turnover of CHF 16,525 million in 2016, which corresponds to a decline by 1.2 per cent in comparison to the previous year. This was due to historically low rates in sea and airfreight as well as negative foreign currency effects. While net turnover increased by 1.7 per cent in Asia-Pacific, it declined by 3.2 per cent in the Americas and by 1.0 per cent in EMEA.

Gross Profit
Gross profit, which is the better performance indicator for a logistics company than turnover, was with CHF 6,550 million 4.8 per cent higher than in the previous year. Negative currency effects had an impact of1.4 per cent. Gross profit improved by 8.1 per cent in the Americas, by 5.9 per cent in Asia-Pacific and by 3.8 per cent in EMEA.

EBITDA
Earnings before interest, tax, depreciation, amortisation and impairment of property, plant and equipment, goodwill and other intangible assets (EBITDA) increased by 6.6 per cent to CHF 1,110 million compared to the previous year. Currency effects had a negative impact of 0.8 per cent. EMEA generated the largest EBITDA contribution with CHF 647 million (58.3 per cent), followed by the Americas with CHF 245 million (22.1 per cent) and Asia-Pacific with CHF 218 million (19.6 per cent).

EBIT
In 2016, earnings before interest and tax (EBIT) improved by CHF 68 million to CHF 918 million. The rise is primarily due to the improvement in profitability. Foreign currency effects had a negative impact of 0.8 per cent.EMEA contributed CHF 509 million (55.5 per cent) to the Group's EBIT, followed by the Americas with a contribution of CHF 207 million (22.5 per cent) and Asia-Pacific with CHF 202 million (22.0 per cent). The EBIT margin of the Group amounted to 5.6 per cent.

Dividend
The Board of Directors will propose a 10 per cent higher dividend of CHF 5.50 (previous year: CHF 5.00) to the Annual General Meeting on May 9, 2017.Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG: “The Kuehne + Nagel Group is in excellent shape and in a strong competitive position. Based on the 2016 full-year results, the company can look forward to the future with confidence. Competence, professionalism and the high level of commitment among all employees worldwide, a proven long-term strategy, efficiency and effective cost control are the drivers for success. The Board of Directors thanks the Management Board for the very good performance.Both, the Management Board and the Board of Directors will face the challenging market development and competitive environment with focus and full commitment.”

Annual Report 2016
Further information on the 2016 full-year result and the annual report 2016 are published on https://annual-report.kuehne-nagel.com

Seafreight
With a 4.5 per cent increase in container volumes in the third quarter 2016, Kuehne + Nagel again outperformed market growth of one to two per cent. Beside material volume increases in the transpacific and intra-Asian trade lanes, reefer transports in particular contributed to the favourable development. The low rate levels in most of the trade lanes continued and the impact of the further consolidation of the shipping industry increased pressure on the margins. Gross profit per TEU decreased by 4.4 per cent in the third quarter. Compared to the first nine months of the previous year, Kuehne + Nagel expanded its container volume by 5.4 per cent. Gross profit rose by 4.3 per cent and the EBIT-to-gross profit margin remained high at 31.8 per cent (previous year: 32.7 per cent). EBIT improved by 1.5 per cent to CHF 340 million.  

Airfreight
The global airfreight market remained tense in the third quarter and pressure on margins continued due to shrinking demand and further capacity increases. Against this trend, Kuehne + Nagel grew its tonnage by 3.8 per cent and gross profit per 100 kilos by 1.4 per cent, mainly due to further scaling its industry-specific solutions. Compared to the first nine months of the previous year, Kuehne + Nagel increased its volume by 2.2 per cent. Gross profit rose by 6.4 per cent and the EBIT-to-gross profit margin remained at last year’s high level at 30.7 per cent (2015: 30.0 per cent). EBIT improved by 8.9 per cent to CHF 220 million.

Overland
In the overland business unit, growth momentum in turnover and gross profit from the previous quarters continued. Business developed particularly well in Europe, whilst slowing in the USA due to the development of transport cost. Compared to the first nine months of the previous year, net turnover increased by 16.9 per cent and gross profit by 9.4 per cent. EBIT improved by 5.9 per cent to CHF 18 million.

Contract Logistics
New contracts have been won through Kuehne + Nagel’s ability to offer scalable end-to-end solutions to customers of the automotive, high-tech, pharmaceutical and consumer goods industries. The successful implementation of new projects continued, leading to an increase of 4.4 per cent in gross profit in the third quarter. Compared to the first nine months of the previous year, net turnover rose by 5.2 per cent, outperforming market growth. Gross profit increased by 6.4 per cent compared to the previous year and EBIT improved from CHF 86 to CHF 100 million.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “Cautious consumer behaviour in parts of the EU and the USA resulted in lower export volumes in Asia. In addition, the tougher situation in the shipping industry increased pressure on seafreight margins. By maintaining our Group’s focus on industry-specific logistics solutions and high-quality services, we succeeded in achieving growth and stable results despite the demanding market environment. We are confident about the business development in the fourth quarter of 2016.”

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “The first half of 2016 has been shaped by different regional economic development trends. Global trade showed a lack of growth momentum.  Our strategy to focus on organic growth and gaining market shares by offering industry-specific solutions once again led to increases in volumes and results. Our Group delivered a strong performance and has significantly improved gross profit, and therewith increased profit.”

Seafreight
In seafreight, Kuehne + Nagel continued to grow and, for the first time, succeeded in handling over one million TEU in one quarter. Compared to the first six month of the previous year, the Group increased its container volume by 5.8 per cent. This growth well above market average was primarily a result of the larger volumes in the export business from Asia to Europe and the US. The LCL and reefer container businesses performed well. The EBIT-to-gross profit margin improved from 30.8 per cent in the first half of 2015 to 31.3 per cent and EBIT by 8.3 per cent to CHF 221 million.

Airfreight
In the global airfreight market shrinking demand and excess capacity resulted in margin pressure. In this challenging environment, Kuehne + Nagel managed to increase its tonnage by 2.9 per cent in the second quarter of 2016. This was mainly due to the expansion of customer-specific services and industry solutions. Strong export business in Asia, the Middle East and Africa contributed equally to this development. Compared to the first six months of the previous year, Kuehne + Nagel increased tonnage by 1.3 per cent. The sustainable profitability is reflected in the EBIT-to-gross profit margin, which at 30.8 per cent was slightly above the previous year’s level. EBIT improved by 8.1 per cent to CHF 147 million.

Overland
Substantial growth in net turnover and gross profit was achieved in the overland business unit in the second quarter of 2016. The fully integrated US-based ReTrans Group and the European business contributed considerably to the positive performance. Compared to the first six months of the previous year, net turnover improved by 22.6 per cent and gross profit by 12.6 per cent. EBIT increased from CHF 14 million to CHF 17 million.

Contract Logistics
The successful implementation of new businesses accelerated in the second quarter of 2016. As a result, gross profit increased by 9.7 per cent in this period versus 5.1 per cent in the first quarter of 2016. Compared to the first six months of the previous year, the net turnover increase of 6.9 per cent outperformed market growth. Gross profit improved by 7.4 per cent compared to the previous year and EBIT from CHF 56 to CHF 70 million.


Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG: “In the second quarter, the Kuehne + Nagel Group improved its performance and managed to expand market shares in a heterogeneous economic environment. Based on its successful strategic focus, we are confident that we can continue the momentum in volume and profit into the second half of the year from today’s perspective.”

Seafreight
In seafreight, Kuehne + Nagel remained on course for growth and increased its transported volumes in numerous relations. Overall, the Group succeeded to expand its container volume by 6 per cent, whilst the international seafreight market grew by around 1 per cent only. At the same time, Kuehne + Nagel managed to improve its profitability. Gross profit per TEU rose by 1.4 per cent and the EBIT-to-gross profit margin (conversion rate) from 29.0 per cent in the previous year to 30.7 per cent. EBIT increased by 13.8 per cent.

Airfreight
In the global airfreight market no significant positive growth stimuli were recorded; as a result, volumes declined towards the end of the quarter. In the previous year’s period, volumes were additionally increased by a temporary shift of goods from sea to airfreight due to the harbour strike on the US West Coast. Kuehne + Nagel counteracted the unfavourable volume development in North and South America with strong export business in Asia, the Middle East and Africa, and thus, managed to keep overall tonnage stable at the previous year's level. The sustainable profitability in this business unit is reflected in the conversion rate, which rose from 30.8 per cent in the first quarter of 2015 to 31.1 per cent. EBIT improved by 7.4 per cent.

Overland
During the first three months of 2016, net turnover increased by 18.4 per cent compared to the previous year, thus significantly exceeding market growth. On the one hand, this can be attributed to the good performance of the American ReTrans Group, which was acquired in 2015, and on the other, to the solid development of activities in the European overland business. However, growth ambitions in several emerging markets could not be achieved in the first quarter of 2016 due to the economic situation. EBIT remained stable at CHF 4 million.

Contract Logistics
In the first quarter 2016, substantial new business was implemented in Asia, Europe and especially in the USA. Compared to the previous year’s period, net turnover rose by 6.4 per cent, clearly exceeding market average. Due to operational improvements and the stabilisation of drinks logistics in the UK, EBIT increased from CHF 24 million in the previous year to CHF 33 million.

 
Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “The result of the first quarter 2016 confirms the successful implementation of our Group strategy. We consider our market proximity and our understanding of current and future customer requirements as a solid basis for the further, positive development of our business.”

 

The report of the globally operating logistics group is accessible online and available for download on the Kuehne + Nagel website.

Kuehne Holding AG, incorporated in Schindellegi, Switzerland, is the majority shareholder of Kuehne + Nagel International AG and holds a more than 20 per cent stake in Hapag-Lloyd AG, the leading German liner shipping company. In addition, the asset management includes own real estate in Australia, Canada, Germany and Switzerland as well as projects in the luxury hotel industry on Majorca and, as of 2017, in Hamburg. There are strong ties between the Kuehne Holding AG and the public benefit Kuehne Foundation as both, Klaus-Michael Kuehne and Karl Gernandt are members of the Board of Trustees.

Dr. Thomas Staehelin, former President of the Kuehne Holding AG, will assume the role as Vice President of the Board. Further members of the Board of Directors of Kuehne Holding AG are
Dr. Wolfgang Peiner, Dr. Andreas Rittstieg and Dr. Joerg Wolle.

In its meeting on March 1, 2016, the Board of Directors of Kuehne + Nagel International AG decided to propose Dr. Joerg Wolle for election as Chairman of the Board of Directors at the Annual General Meeting on May 3, 2016. This decision is fully supported by the majority shareholder, Klaus-Michael Kuehne, and the former Chairman of the Board of Directors, Karl Gernandt, the latter is set to be appointed Vice Chairman of the Board. 

Karl Gernandt, member and Delegate of the Board of Directors of Kuehne + Nagel International AG since 2009, appointed to its Chairman in 2011, will hand over to Dr. Joerg Wolle at a time at which the Kuehne + Nagel Group is one of the leading players in the global logistics industry and in an excellent condition. For more than two years, the Management Board, consisting of eight members under the lead of CEO, Dr. Detlef Trefz-ger, is responsible for the successful development of the Group.

Dr. Joerg Wolle was President and CEO of SiberHegner Holding Ltd. from early 2000. He initiated and managed the merger of Diethelm Keller Services Asia and SiberHegner Holding Ltd. to form DKSH in June 2002, over time creating the leading market expansion services Group with a focus on Asia. Under the entrepreneurial leadership of Dr. Wolle the DKSH Group successfully launched an IPO at the Swiss stock exchange in spring 2012. Dr. Wolle is a member of various Boards; he was elected to the Board of Directors of Kuehne + Nagel International AG in 2010 and named its Vice Chairman in 2013.

Klaus-Michael Kuehne comments on the personnel changes:
“Due to his proven leadership and management capabilities Karl Gernandt has been very successful in his function as Chairman of the Board of Directors of Kuehne + Nagel International AG. As Delegate of the Board of my Kuehne Holding AG he has been responsible for the entire portfolio, consisting of the majority shareholding in the Kuehne + Nagel International AG, the over 20 per cent stake in Hapag Lloyd AG as well as assets in the real estate and luxury hotel businesses. Karl Gernandt will now focus on the portfolio and asset management including key areas of development. At the same time he will remain related to Kuehne + Nagel as Vice Chairman of the Board.

I am very pleased about this development and delighted that Dr. Wolle, a very experienced top executive, agreed to assume the function as Chairman of the Board of Directors of Kuehne + Nagel International AG: Dr. Wolle is a renowned Asia specialist and proven business leader in Switzerland. For a number of years we have been enjoying a very close and trustful cooperation.

My sincere thanks go to Karl Gernandt and Dr. Thomas Staehelin for having managed their tasks in my field of interest excellently. I am looking forward to continue working together with both of them, and with Dr. Wolle, who will be responsible for the Kuehne + Nagel Group,the flagship of all my activities.”

* proposal to the Annual General Meeting on May 3, 2016

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “We are proud that in a challenging environment we were able to further increase profitability and once again achieve a new record result. This positive performance was driven by both the effectiveness of our efficiency pro-grammes and the successful implementation of strategic initiatives. It is our customer proximity and understanding of future customer requirements, that enables us to innovatively expand our service portfolio in line with the market. This allowed us to set the course for the Group’s future success.”

Development of the business units
Seafreight
In an international seafreight market characterised by highly volatile rates and weak growth, Kuehne + Nagel focused on profitable business. In the first half of the year this resulted in a volume decline, which was then compensated in the second half by profitable volume increases in the North American and intra-Asian trade lanes. Whereas the growth in European exports stagnated due to regional differences in demand, Kuehne + Nagel clearly increased volumes in trades to and from North and South America. With regard to specialised solutions such as reefer container and LCL (Less-than-Container-Load), Kuehne + Nagel gained further market share and strengthened its leading position. In total, the company handled 3.8 million TEU, the same quantity as the previous year but with improved profitability: gross profit per TEU increased by 5.2 per cent and the EBIT-to-gross profit margin (conversion rate) rose from 30.3 per cent to an impressive 33.2 per cent. EBIT increased by 15.3 per cent compared to the previous year.

Airfreight
In airfreight, Kuehne + Nagel remained successfully on course in a stagnant to slightly declining global market. The company increased its tonnage by 4.7 per cent to 1,250,000 tonnes, thereby reaffirming its position as the second largest global airfreight forwarder. A key factor
in the good performance was the focus on industry-specific airfreight solutions, which led to significant business wins in the pharmaceutical, aerospace and perishables sectors. KN FreightNet, the innovative online portal, proved to be an effective new sales channel. Customers worldwide can receive instant quotes for airfreight services, place bookings and track shipments. The enhanced profitability in this business unit is reflected in the conversion rate, which increased from 27.0 per cent in the previous year to 29.3 per cent; EBIT improved by 11.3 per cent.

Overland
The operational performance in overland remained stable despite the challenging market situation in Europe. The groupage activities in Germany, France and the UK were successfully expanded. The new workflow concept for less than truckload (LTL) and full truckload (FTL) shipments contributed to the pleasing development of this business unit. Kuehne + Nagel’s acquisition of ReTrans, a U.S.-based provider of multimodal transportation management solutions, in August 2015 marked an important step in the expansion of activities outside Europe. A notable amount of new business was already generated in cooperation with the North American Kuehne + Nagel organisation in the fourth quarter. The overall positive development was impacted by an antitrust fine imposed by the French competition authority on twenty French parcel service providers, including a CHF 34 million fine for the Alloin Group, a French transport company, which Kuehne + Nagel took over in 2009. Thereof, CHF 33 million are attributable to the time before the acquisition of the Alloin Group. Kuehne + Nagel dissociates itself from such business practises and has a comprehensive compliance programme in place, which is continuously improving. The EBIT decrease from CHF 30 million in the previous year to CHF 7 million is mainly owed to the antitrust fine. Kuehne + Nagel lodged an appeal against the French competition authority’s decision.

Contract Logistics
Kuehne + Nagel’s industry-specific end-to-end solutions met with high demand in the market, as confirmed by the new business wins in 2015 with an additional warehousing space of some 860,000 m2. The three strategic initiatives – focused growth, continual process improvement and Master Location Plan – prove to be effective. In the year under review, Kuehne + Nagel managed a total of over 9.5 million m2 of warehouse and logistics space for its customers worldwide. At the same time, the idle space was reduced from 4.2 per cent to 3.5 per cent. Net turnover from contract logistics saw a currency-adjusted increase of 5.5 per cent, placing it above the market average. Nevertheless, negative currency effects, which particularly affected this division, and the drinks logistics business in the UK, significantly impacted the result. EBIT decreased from CHF 153 million in the previous year to CHF 119 million.

Net Turnover
After customs, duties and taxes the Kuehne + Nagel Group achieved a net turnover of CHF 16,731 million in 2015, which represents a decrease of 4.4 per cent compared to the previous year. Negative currency effects impacted net turnover by 8.0 per cent. While net turnover in Asia Pacific remained stable at the previous year’s level, in the Americas it rose by 9.2 per cent. EMEA recorded a decrease by 9.6 per cent, mainly as a result of the strong Swiss Franc against the Euro.

Gross Profit
Gross profit, which is the better performance indicator than turnover for a logistics company, is with CHF 6,251 million in 2015 slightly below (by 0,6 per cent) the previous year. Negative currency effects had an impact of 8.6 per cent. In the Americas gross profit increased by 14.0 per cent and in Asia Pacific by 10.9 per cent. In EMEA however, the strong Swiss Franc resulted in a decline by 5.1 per cent.

EBITDA
Earnings before interest, tax, depreciation, amortisation and impairment of property, plant and equipment, goodwill and other intangible assets (EBITDA) increased by 3.6 per cent to CHF 1,041 million compared to the previous year; negative currency effects had an impact of 7.8 per cent. EMEA generated the largest EBITDA contribution with CHF 580 million (55.7 per cent) followed by the Americas with CHF 231 million (22.2 per cent) and Asia Pacific with CHF 230 million (22.1 per cent).

EBIT
In 2015, earnings before interest and tax (EBIT) improved by CHF 31 million to CHF 850 million, whereas foreign currency effects impacted negatively by 7.1 per cent. The increase was mainly due to a further improvement in profitability. EBIT in the Americas increased by CHF 44 million (28.2 per cent) and in Asia Pacific by CHF 29 million (15.7 per cent). In EMEA, however, EBIT decreased by CHF 42 million (8.8 per cent). The EBIT margin amounted to 5.1 per cent and exceeded the target ahead of time.

Dividend
The Board of Directors will propose to the Annual General Meeting on May 3, 2016, the distribution of a dividend of CHF 5.00 per share (previous year: CHF 4.00 per share and CHF 3.00 anniversary dividend per share).

Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG: “The result in the anniversary year confirmed that our company is able to substantially improve even in a volatile environment. Our structures and processes are flexible enough to respond quickly and effectively to new market situations. The market environment will again remain challenging in the current year but our resilient business model, strong leadership and, above all, the commitment of all employees worldwide allow the Board of Directors to be optimistic that the company’s positive development will continue.”

Kuehne + Nagel Group

January to September
2015

January to September
2014

CHF million

Net turnover

12,426

13,004

Gross profit

4,609

4,699

Operational result (EBITDA)

777

743

EBIT

640

607

Earnings for the period

512

480

Seafreight
In the first nine months of the year Kuehne + Nagel exploited growth opportunities in the US import business from Europe and Asia which compensated for the continuous market weakness in exports from Asia to Europe. Profitability improved substantially in this business unit: Gross profit per TEU increased by 4.4 per cent and the EBIT-to-gross profit margin (conversion rate) improved from 30.2 to 32.7 per cent. In comparison to the previous year’s period EBIT increased by 11.7 per cent.

Airfreight
In a stagnating airfreight market, Kuehne + Nagel grew volumes by 5.1 per cent in the first nine months of 2015. The increasing demand for specialised services in the industry segments automotive, pharma, aerospace and perishables contributed to this favourable development as did the good performance in Asia, Europe and North America. In comparison to the previous year the conversion rate rose from 27.5 to 30.0 per cent. EBIT increased by 11.0 per cent.

Overland
The overland business reported a stable result. During the first nine months net turnover declined by 12.1 per cent due to the discontinuation of project business and lower rates as a result of lower diesel prices. The acquisition of ReTrans, a US-based provider of multimodal transportation management solutions, consolidated since August 2015, will strengthen Kuehne + Nagel’s market position as an integrated logistics provider in North America.

Contract Logistics
The capability to offer scalable end-to-end solutions in industries including automotive, high-tech, pharma and consumer goods led to numerous new contracts during the first nine months of 2015. However, the restructuring of selective projects in the United Kingdom and currency effects continued to impact the result negatively. EBIT decreased by CHF 21 million to CHF 86 million compared with the previous year’s period.

Dr. Detlef Trefzger, CEO, Kuehne + Nagel International AG: “In the third quarter we further improved our results, especially in seafreight and airfreight. The development in overland is solid and the optimisation of selective projects in contract logistics is proceeding as planned. Our strong focus on innovative logistics services and strict cost management enabled growth in profits in a demanding market environment. The performance in the first nine months confirms our market strategy and we see our Group on the right track.”

Kuehne + Nagel Group

First half year 2015

First half year 2014

CHF million

Net turnover

8,225

8,500

Gross profit

3,018

3,107

Operational result (EBITDA)

497

487

EBIT

410

396

Earnings for the period

326

313

Dr. Detlef Trefzger, CEO of the Kuehne + Nagel International AG: “Given the demanding market environment and currency volatilities, we are very pleased about the development of our results in the first half of 2015. The solid performance in seafreight and the increased profitability in airfreight are to be highlighted. Due to our proven business model and the consistent implementation of our global strategy, we were able to increase the earnings for the period despite the stronger Swiss Franc.”

Seafreight
In seafreight Kuehne + Nagel gained market shares in the U.S. import trade lanes as well as in the LCL (Less-than-Container Load) business. In comparison to the previous year’s period, however, container volume decreased by 1.8 per cent due to the concentration on higher margin business and the continuous weakness of market volumes in the Asia-Europe trade lanes. Profitability clearly improved in this business unit: Gross profit per TEU increased by 4.4 per cent and the EBIT-to-gross profit margin (conversion rate) improved from 29.1 per cent to remarkable 30.8 per cent. In comparison to the previous year’s period EBIT increased by 8.5 per cent.

Airfreight
The excellent performance in airfreight continued. With a 5.2 per cent increase in tonnage Kuehne + Nagel grew faster than the market. Significant volume increases were realised in exports from Europe, North America and Asia. In addition, the expansion of services for customers from the segments perishables, pharma and industrial goods contributed to the favourable development. The conversion rate improved from 27.8 per cent in the first half year 2014 to 30.6 per cent in the first six months of 2015. EBIT increased in comparison to the previous year’s period by 11.5 per cent.

Overland
The result in the overland business remained stable. Whereby net turnover declined by 16.6 per cent due to the discontinuation of project business and lower rates as a result of lower diesel price, the reduction in earnings, however, was almost compensated. EBIT decreased from CHF 16 million in the previous year’s period to CHF 14 million in the first half year of 2015. The recently announced acquisition of ReTrans, a U.S.-based provider of multimodal transportation management solutions, will expand both the business base and the product portfolio.

Contract Logistics
Volume reductions in existing business with customers in Western Europe and the restructuring of customer businesses in the United Kingdom negatively affected the results. Furthermore, the strong Swiss Franc influenced the development of net turnover and gross profit disproportionally in comparison to other business units of the Group. EBIT decreased by CHF 14 million to CHF 56 million compared with the same period in the previous year.

Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG: “In the first half of 2015 the increased profitability confirmed the strength of the Kuehne + Nagel Group and the diversified service portfolio supported growth, especially in airfreight. Therefore we are confident regarding the further development, although the macroeconomic environment deserves close attention.”

Documents

Condensed Consolidated Interim Financial Statements Q22015

Seafreight

Due to the concentration on profitable business and the unexpected weakness of market volumes in the Asia-Europe trade lanes, container volumes slightly decreased in comparison to the previous year’s period (-0.7 per cent). However, Kuehne + Nagel succeeded to improve gross profit per TEU by 2.2 per cent as well as the conversion rate from 28.8 per cent in the previous year to 29.0 per cent. EBIT grew by 2.2 per cent.

Airfreight

Kuehne + Nagel had a very successful start into 2015 with a tonnage increase of 7 per cent compared to the previous year’s period. The Group gained significant share of the strong European export business and – occasionally in contrast to the market trend – grew volumes in export activities from North America and Asia. The airfreight business from South America, the Middle East and Africa developed with the same volumes as in the previous year’s period. The conversion rate improved from 28.3 per cent in the first quarter of 2014 to remarkable 30.8 per cent. EBIT increased by 9.7 per cent compared to the previous year.

Overland

The positive development of results continued although net turnover declined by 15.2 per cent due to the discontinuation of project business and lower rates as a result of declining diesel prices. EBIT, however, improved from CHF 3 milllion in the previous year’s period to CHF 4 million due to business wins in the focused industry segments and strict management of operational costs.

Contract Logistics

The positive momentum in regard to new business wins extended into the first quarter of 2015, but slowed down due to volume reductions in existing businesses with major customers in Western Europe. The strong Swiss Franc disproportionally affected the turnover and gross profit development negatively. Structural changes and price negotiations with contract logistics customers in Western Europe as well as the built-up of resources for organic growth impacted the result negatively. EBIT decreased by CHF 9 million compared to previous year’s period.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “The development of our results is remarkably positive, considering the decreasing import flows of goods to Europe due to the weakness of the Euro. In addition, the strong Swiss Franc negatively affected the result. We will pursue our strategy of profitable growth.”

Kühne + Nagel Group

2014

2013

CHF million

Turnover

21,291

20,929

Net turnover

Gross profit

17,501

6,288

17,178

6,257

Operational result (EBITDA)

1,005

962

EBIT

819

761

Earnings for the year

644

607

Kühne + Nagel International AG

Dividend per share in CHF

Extraordinary dividend per share in CHF 

4.00*

3.00*

3.85

2.00

* Proposal to the Annual General Meeting on May 5, 2015

Dr. Detlef Trefzger, CEO, commented: “In a volatile economic environment with fluctuating currencies, we were able to simultanously expand our market share and increase results in 2014. The turnaround in the overland business unit made an essential contribution to the considerable improvement in profitability; for the first time profits were reported over four consecutive quarters. I would also like to emphasise the continuously excellent performance in airfreight and the further improvement of results in contract logistics. In seafreight we grew volumes and held margins stable, despite the high volatility of rates and negative currency impacts. By combining our industrial competence, innovative power and effective cost management we are strengthening our market position while at the same time generating added value for our customers.”

Development of the business units

Seafreight
Handling over 3.8 million TEU, which represents an increase of 242,000 containers or 7 per cent more than in the previous year, Kuehne + Nagel grew significantly faster than the global seafreight market, which gained around 4 per cent. In particular the company maximised business opportunities arising from an improved economic climate in the USA and achieved considerable volume increases in the transpacific and transatlantic trade lanes. In the Asia-Europe traffic Kuehne + Nagel concentrated on margin stability and did not participate in the intensive price competition. Specialised solutions such as reefer container and LCL (Less-than-Container Load) saw a solid increase in volumes. Due to high rate volatility and negative currency impacts the EBIT of the business unit was slightly below the previous year, nevertheless the conversion rate remained stable at 30.3 per cent.

Airfreight
In airfreight Kuehne + Nagel continued the successful path in 2014. In addition to improved profitability, the company increased tonnage by 5.3 per cent in a market that grew moderately by 3 to 4 per cent, thereby clearly securing its position as the second largest global airfreight forwarder. Key success factors in this business unit are industry-specific airfreight products, which led to significant business wins in the pharmaceutical, automotive and industrial goods sectors. There was also increased demand for the 2013 launched product “KN EngineChain”, a special service for the transport and handling of aircraft engines. The new online portal “KN FreightNet”, which was brought to market in 2014, underlines Kuehne + Nagel’s innovative power while setting a new standard in the airfreight industry. In comparison to the previous year, EBIT improved by 7.2 per cent. The conversion rate developed positively from 25.3 per cent in the previous year to 27.0 per cent.

Overland
In overland, the turnaround was achieved in 2014. Compared to the previous year EBIT increased by CHF 38 million. The “Road 2 Profit” strategy, which was introduced in 2013 and consistently implemented, showed a swift and sustainable impact. It is based on optimisation of the product portfolio, intense focus on specific customer segments and centralised purchasing of cargo capacity. While priority was given to the improvement of results, the development of innovative services remained in focus: for example the “I2M Overland” product launched in 2014 allows customers to plan and manage their inbound supply chain logistics more efficiently.

Contract Logistics
The favourable development of results in contract logistics continued with qualitative growth and an EBIT increase of 7.7 per cent (in constant currencies 9.1 per cent). This was mainly a result of the focus on scalable solutions and services for internationally operating customers from selected industries. Subsequently, complex and innovative projects with major global customers from the pharmaceutical, automotive and e-commerce sector were acquired in 2014. At the same time the growth of business with existing customers substantially surpassed that of the market. The net turnover in contract logistics increased by 4.4 per cent (in constant currencies by 6.0 per cent). With 3.4 per cent the EBIT margin remained stable at the level of the previous year.

Net Turnover
After customs, duties and taxes the Kuehne + Nagel Group achieved a net turnover of CHF 17,501 million in 2014, which represents an increase of 1.9 per cent compared to the previous year. Negative currency effects impacted net turnover by CHF 546 million (3.2 per cent). All regions recorded increases in net turnover: The Middle East, Central Asia and Africa by 3.5 per cent; Asia-Pacific by 2.1 per cent; the Americas by 1.9 per cent and Europe by 1.7 per cent.

Gross Profit
Gross profit, which is the better performance indicator than turnover for a logistics company, rose by 0.5 per cent to CHF 6,288 million in 2014. Negative currency effects had an impact of CHF 151 million (2.4 per cent). In the Middle East, Central Asia and Africa gross profit improved by 3.9 per cent. In Europe gross profit was up by 0.8 per cent, in Asia-Pacific 0.7 per cent while in the Americas it decreased by 1.8 per cent.

Dividend
The Board of Directors will propose to the Annual General Meeting on May 5, 2015, the distribution of a dividend of CHF 4.00 per share (previous year: CHF 3.85 per share). Due to the solid liquidity position, the shareholders shall additionally benefit from the payment of an extraordinary dividend of CHF 3.00 per share.

Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG, said: “The annual result shows: Our business unit strategies have proven to be effective and our targeted efforts at all levels have been rewarded. We set ourselves ambitious targets and we have reached these with a new record result. In 2015 market conditions will again be challenging, therefore the continuous improvement of our performance remains our clear ambition. The Board of Directors is confident, that the positive business development will continue throughout the anniversary year.”

Kuehne + Nagel Group

January to September

2014

2013

CHF million

Net turnover

13,004

12,873

Gross profit

4,699

4,685

Operational result (EBITDA)

743

710

EBIT

607

561

Earnings for the period

480

442

Seafreight

Kuehne + Nagel grew twice as fast as the market with seafreight volumes increasing by 8 per cent. In the first nine months of the year the company handled 2.9 million TEU, an additional 211,000 TEU more than in the same period of 2013. In a difficult market environment the volume development in South America was rather slow. Import activities into the USA increased and Kuehne + Nagel gained additional market shares particularly in the European and North American import business. On a 9-month comparison Kuehne + Nagel was able to keep the EBIT-to-gross profit margin (conversion rate) stable at a high level with 30.2 per cent (previous year: 30.6). Due to negative currency effects gross profit and the operational result were slightly below the previous year’s figures. Currency adjusted gross profit increased by 4.1 per cent and the operational result by 2.4 per cent.

Airfreight

The situation in the international airfreight market stabilised with volumes growing between 3 and 4 per cent. Kuehne + Nagel increased tonnage by 5 per cent, representing 40,000 tons, during the first nine months.
Increased volumes in the European export business and strong growth of specific services for customers from the automotive, pharmaceutical and aviation industries contributed to keep momentum high. The perishables business grew, especially in the South American trade lanes. Compared to the previous year’s period, EBIT-to-gross profit margin improved from 25.1 to 27.5 per cent. The operational result increased by 5.9 per cent (currency adjusted by 10.8 per cent).

Overland

The systematic implementation of the “Road 2 Profit” strategy led to improved results in the third quarter. Sustainable progress was made in the European groupage activities, the overseas business and in the provision of specific industry solutions. Currency adjusted net turnover grew by 3.2 per cent in the first nine months and the operational result improved from CHF 22 million to CHF 47 million. EBIT increased by CHF 27 million compared to the previous year’s period.

Contract Logistics

The reshaping of the contract logistics project portfolio towards focusing on complex and scalable solutions is proving effective. Target industries include automotive, high-tech, aviation, pharmaceutical and consumer goods. In addition, the concentration on end-to-end solutions generated new and profitable projects for key accounts. In the first nine months EBIT improved by 8.1 per cent (currency adjusted by 10.1 per cent) compared to the previous year. Currency adjusted net turnover increased by 5.4 per cent; EBIT margin was at 3.3 per cent (previous year: 3.1 per cent).

Dr. Detlef Trefzger, CEO of the Kuehne + Nagel Group said: “Part of our organic growth strategy is to concentrate on internationally operating customer groups, profitable growth and selective market share expansion. Additional key success factors include our strict cost control and the continuous enhancement of innovative solutions. This is clearly demonstrated by the positive development of our overland operations. The consistent implementation of our market strategies is leading to sustainable success.”

Kuehne + Nagel Group

1^st Quarter 2014   1^st Quarter 2013

CHF million

Net turnover

4.127

4,182

Gross profit

1,532

1,537

Operational result (EBITDA)

235

219

EBIT

190

169

Earnings for the period

150

134

The slight decreases in net turnover and gross profit resulted from the planned adjustments in warehousing capacities, rate deterioration and margin pressure in sea and airfreight, as well as the negative currency impact, in particular.

Seafreight
Kuehne + Nagel increased its container volume by 6.9 per cent and handled 58,000 TEU more than in the previous year’s first quarter. Volumes in the trade lanes from Europe to North America and Asia increased substantially, while the Latin American business did not grow so strongly. Although the volatility of rates in many routes led to margin pressure, Kuehne + Nagel was able to keep the conversion rate (EBIT-to gross profit-margin) stable at 28.8 per cent.

Airfreight
In airfreight, Kuehne + Nagel increased volumes by 1.4 per cent, handling 4,000 tons more than in the previous year’s period. Volume increases were mainly realised in Europe and North America, while in Asia, Middle East and Africa tonnage declined in comparison with the first quarter 2013. As a result of focussing on the provision of industry-specific solutions and efficient cost management, the conversion rate (EBIT-to gross profit-margin) improved from 24.2 per cent in the first quarter 2013 to 28.3 per cent; EBIT increased by 17.0 per cent compared with the first three months 2013.

Overland
The strict implementation of the “Road 2 Profit” strategy resulted in a considerably improved performance. Cost reductions and the favourable development of the European groupage business both influenced results positively. Currency adjusted, net turnover improved by 6.9 per cent, the operational result rose disproportionately to CHF 12 million. With
CHF 3 million, EBIT was positive as expected. 

Contract Logistics
The restructuring measures in the contract logistics business unit  combined with new business developments showed positive effects. While net turnover (currency adjusted), improved by 1.7 per cent, EBIT increased by 13.8 per cent compared to the previous year’s
period. The EBITDA margin was stable at 5.6 per cent.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “In a slightly recovered market environment all our business units performed well and strengthened our market position at the same time. In view of this, we are satisfied with the results in the first quarter 2014. The cost measures introduced one year ago and active margin management have been effective. Our strategy remains unchanged: we will continue to focus on profitable growth.”

Kuehne + Nagel Group

2013

2012

CHF million

Turnover

20.929

20.753 

Gross profit

6.257

6.094

Operational result (EBITDA)

962

855*

EBIT

761

633*

Earnings for the year

607

492*

Kuehne + Nagel International AG

Dividend per share in CHF

Extraordinary dividend per share in CHF

3,85**


2,00**

3,50

*   Including one-off item of CHF 65 million
** Proposal to the Annual General Meeting

Dr. Detlef Trefzger, CEO, commented: “In 2013, the Kuehne + Nagel Group fully concentrated on profitable growth. Through organisational adjustments, streamlined cost structures and a clear focus on margin improvements we achieved the goals we had set ourselves. I would like to emphasise the excellent performance in airfreight and the strong improvement of results in contract logistics. By concentrating on selective growth in seafreight, we succeeded in keeping margins stable despite high volatility of rates. The implementation of the new overland strategy also led to an improvement in profitability. Our 2013 results confirm the strength of our business model, the efficiency of our focused approach, and the value our solutions offer to customers.”

Development of the business units

Seafreight
In a global seafreight market, which, particularly in the first half of the year was characterised by low volume growth and significant rate volatility, Kuehne + Nagel concentrated on stable margins and growing volumes on selected trade lanes. The company increased its market shares on the transatlantic and transpacific lanes, for example, but did not participate in the intensive competition on the Asia-Europe traffic. Specialised solutions such as reefer container and LCL (Less-than-Container Load) activities were successfully expanded due to growing demand. In 2013 Kuehne + Nagel handled a total of 3.6 million TEU, an increase of 3 per cent compared to the previous year. Despite a slowdown in the project business, which is traditionally subject to fluctuations, the conversion rate (EBIT-to gross profit-margin) remained stable at 30 per cent, thus achieving the 2013 target.

Airfreight
In 2013, again, Kuehne + Nagel’s performance in airfreight was excellent, clearly outperforming market growth. By consistently implementing its airfreight strategy, the company managed to increase volumes across all quarters. In a stagnating global airfreight market, Kuehne + Nagel realised profitable growth and, overall, raised its tonnage by 4 per cent to 1.1 million tons. Kuehne + Nagel’s airfreight operations performed particularly well in Europe, Asia, and in the Middle East and Africa. In North America, cargo volumes increased on the routes to South America. In the area of industry-specific solutions, “KN PharmaChain”, the product tailored to the pharmaceutical and healthcare industry, generated new business. “KN EngineChain”, a solution specifically designed for the transport and handling of aircraft engines, experienced good market acceptance after its launch in 2013. With a conversion rate (EBIT-to gross profit-margin) increased to 25 per cent, Kuehne + Nagel met its profit margin target in 2013.

Road & Rail Logistics
After a weak first quarter, Kuehne + Nagel continuously improved EBIT compared to the previous year. This was mainly due to the new strategy “Road 2 Profit”. It is based on the three distinct segments “groupage”, “full and part loads” and “industry-specific distribution” as well as product innovation and centralised purchasing. In order to improve profitability in the highly competitive groupage business, Kuehne + Nagel launched the new product “KN Eurolink” and adapted the frequency of its international line haul services to the Eurohub in Bad Hersfeld, Germany, to market needs. Part and full load traffic continued to perform positively. Also in this segment, a new product, “KN EuroDirect”, was introduced. In the field of industry-specific distribution, the business for the pharma- and healthcare industry grew substantially.

Contract Logistics
In contract logistics, a remarkable improvement of results was achieved. With an EBIT increase of 89.1 per cent, Kuehne + Nagel managed to almost double profit. This substantial improvement has been primarily due to the systematic implementation of the Master Location Plan, started 12 months ago. Under this initiative, some 40 unprofitable locations were closed; in addition, idle space was substantially reduced across the globe.  Subsequently, EBITDA margin increased from 3.4 per cent in the previous year to 4.1 per cent. The focus on globally operating customers with complex logistics requirements and the extension of the service portfolio generated substantial new business. New customers were gained especially within the pharmaceutical and e-commerce industries.

Turnover
In 2013, the Kuehne + Nagel Group achieved a turnover of CHF 20,929 million, an increase of 0.8 per cent compared to the previous year. Currency effects negatively impacted turnover with CHF 298 million.

The regions Americas (2.3 per cent), Asia-Pacific (2.0 per cent) and Europe (0.5 per cent) recorded increases; in the Middle East, Central Asia and Africa turnover declined by 1.8 per cent.

Gross profit
Gross profit, which is a better performance indicator than turnover for a logistics company, rose by 2.7 per cent to CHF 6,257 million in 2013. Negative currency effects had an impact of CHF 37 million.

The region Middle East, Central Asia and Africa improved gross profit by 7.5 per cent and the Americas by 5.7 per cent. In Europe, gross profit was up 2.1 per cent and in the Asia-Pacific region it was slightly below the previous year (0.2 per cent).

Operational result (EBITDA)
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved substantially by CHF 107 million (12.5 per cent) compared to the previous year. Currency effects had a negative impact of CHF 11 million.

With CHF 522 million (54.3 per cent) the biggest contribution to the operational result of the Group came from Europe, followed by the Asia-Pacific region with CHF 201 million (20.9 per cent). The Americas contributed with CHF 184 million (19.1 per cent) and Middle East, Central Asia and Africa with CHF 55 million (5.7 per cent).

EBITDA margin improved from 4.1 per cent in the previous year to 4.6 per cent due to strict cost control measures.

Earnings before interest and tax (EBIT)
In 2013, EBIT rose by CHF 128 million to CHF 761 million (previous year: CHF 633 million). Currency effects had a negative impact of CHF 11 million. In Europe, EBIT increased by 22 per cent, in the Americas by 21.4 per cent. In the Asia-Pacific region EBIT improved by 11.9 per cent and in Middle East, Central Asia and Africa by 41.2 per cent.

Dividend
The Board of Directors will propose to the Annual General Meeting of May 6, 2014, to distribute a dividend of CHF 3.85 per share (previous year: CHF 3,50 per share). Furthermore, the shareholders shall also benefit from the payment of an extraordinary dividend of CHF 2.00 per share.

Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG, said: “2013 was characterised by remarkable changes in the fields of personnel, structures and product focus. The Kuehne + Nagel Group has streamlined its internal structures more efficiently and established a new management team. With these initiatives implemented, the company has achieved a very good result. Our expertise in offering customers industry-specifics solutions is, and will remain, the driving force for further quality growth.”

Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG, said: “I am delighted by this decision. Not only does Markus Blanka-Graff bring an excellent track record of financial and controlling expertise to his new role as CFO and member of the Kuehne + Nagel Management Board, but also many years’ experience driving our strategies forward as a manager within the company, a background that will substantially support the achievement of our corporate goals. Drawing on experience in all areas and with all processes of finance and controlling will enable Markus Blanka-Graff to make a significant and positive contribution to increasing yield potential as well as safeguard our high standards in this area in the future.”

Markus Blanka-Graff was born in Austria, and after studying economics began his career in 1996 at the Kuehne + Nagel subsidiary in Vienna. Over the past 17 years, he has held various finance management positions in Asia, Europe, North America and on Corporate level and gained valuable management experience, amongst others in integrating acquired companies and standardising global finance and controlling processes.Since 2009 he has been based at the headquarters of the Kuehne + Nagel Group in Schindellegi, first as Head of Corporate Accounting and since 2012 as Director of Corporate Finance and Investor Relations.

Seafreight
In the container business special efforts were made to improve the profit margin. Despite a weak volume growth, the EBIT-to-gross profit margin was increased to 31.4 per cent in the third quarter 2013, thus slightly exceeding the target of 30 per cent. Compared to the first nine months of the previous year, results on EBIT level were stagnating mainly due to a slowdown in the project business. While market shares were gained in the transatlantic and transpacific trade lanes, Kuehne + Nagel did not participate in the intensive competition on the Asia-Europe traffic. As a result of this decision, the company increased container volumes by 2.3 per cent in the first three quarters.  

Airfreight
In airfreight, the positive business and result development continued also in the third quarter. In a stagnating global airfreight market, Kuehne + Nagel increased overall tonnage by 3.3 per cent in the first nine months. Worth mentioning is the good performance of the European airfreight business, particularly transports to the Middle East grew significantly. In North America, higher volumes mainly on the South American routes resulted from new business opportunities. Additional momentum brought the special focus on services for certain industries such as pharmaceutical / healthcare, automotive and aviation. Gross profit margin improved from 20.8 per cent in the first nine months of 2012 to 21.5 per cent in the same period of 2013. EBIT-to-gross profit margin was at 25.1 per cent stable at previous year’s level, overall EBIT improved by 6.4 per cent to CHF 166 million.

Overland
Operational measures to improve results taken in the second quarter led to an increase on EBIT level by CHF 8 million in the third quarter. The focus has been on growing activities in the areas pharmaceutical, high-tech, automotive and industrial goods as well as in international groupage and part- and full loads.

Contract Logistics
The continuous implementation of the master location plan and portfolio adjustments as well as the concentration on end-to-end-logistics solutions for internationally operating customer groups resulted in the third quarter in an EBIT increase of 31.6 per cent compared to the previous year. On a 9-months comparison, net turnover increased by 4.3 per cent and cumulated EBIT from CHF 44 million to CHF 70 million, equivalent to an increase of 59.1 per cent.

Detlef Trefzger, CEO of Kuehne + Nagel International AG, said: “We concentrate on profitable growth and are on good track to reach our goals. In seafreight, our most important business unit, we focused on the quality of business instead of volume growth by all means. In a demanding market environment we thus reached our profitability target in seafreight. Strict cost management will remain in place for the whole company and at the same time we will also continue to enhance the spectrum of solutions and the service quality for our customers.” 

Kuehne + Nagel Group

CHF million

Half-Year 2013

Half-Year 2012

Turnover

10,394

10,062

Gross profit

3,112

3,032

Operational result (EBITDA)

466

389*

EBIT

371

288*

Net earnings

289

214*

*Including one-off item of CHF 65 million.

Seafreight
After a strong increase of freight volumes in April 2013, growth slowed down again to a moderate level in the following two months. Overall, Kuehne + Nagel increased container volumes by 3 per cent in the first six months of 2013. In particular, the company performed well in the intra-Europe and intra-Asia trades. Volumes stagnated in the declining Asia-Europe traffic, while, contrary to the market trend, increases were achieved in the transpacific trade lanes. As a result of moving the focus from top-line growth to profitability, Kuehne + Nagel’s gross profit margin in seafreight remained stable despite continuously declining freight rates. In the second quarter of 2013 EBIT-to-gross profit margin improved to 29.9 per cent (first quarter 2013: 28.6 per cent). On a six months comparison EBIT conversion was at the 2012 level. EBITDA improved by 1.0 per cent compared to the same period of the previous year.

Airfreight
In a worldwide stagnating airfreight market Kuehne + Nagel increased tonnage by 3.7 per cent in the first half of the year. Also in this business unit highest volume growth was recorded in April 2013. The concentration on specific airfreight solutions for the pharmaceutical, automotive and aviation industries as well as volume increases in the European, North American and Asian export business contributed to the favorable development. In the second quarter EBIT-to-gross profit margin improved to 25.6 per cent (first quarter 2013: 24.2 per cent). On a six months comparison EBITDA improved by 7.8 per cent.

Road & Rail Logistics
In the second quarter of 2013 progress was made in the operations of road business. Volume increases were achieved in the full and part loads segment. Compared to the previous year’s six months period, gross profit remained stable; EBITDA was below last year’s figure, however, considerably improved in the second quarter. Selective growth in specific industry segments such as pharmaceutical, high-tech, automotive and industrial goods as well as the improvement of margins should enable the further positive development in the second half of 2013.

Contract Logistics
The continuous implementation of the location master plan as well as the company-wide concentration on global customers resulted in a considerable increase in profitability in the second quarter of 2013.
In the first six months net turnover increased currency adjusted by 2.8 per cent. Subsequently, EBITDA grew by 19.4 per cent; the EBITDA margin improved from 3.3 per cent in the first half year 2012 to 3.8 per cent in the same period of 2013.

Karl Gernandt, Chairman of the Board of Directors and acting CEO of Kuehne + Nagel International AG: “In particular the results achieved in the second quarter 2013 underline the fact that the measurements introduced to improve efficiency on a Group-wide level are effective. Although we do not anticipate a significant stimulation of global trade in the second half of the year, we will continue to focus on profitable growth.”

For the last time, Reinhard Lange, CEO of the Kuehne + Nagel Group, illustrated the performance of the business units. After a modest start in 2013, volume development gained momentum, he said. In April, Kuehne + Nagel increased volumes in seafreight by 7 per cent, in airfreight by 9 per cent.
Effective the Annual General Meeting, the Board of Directors of Kuehne + Nagel International AG accepted the request of Reinhard Lange to be released from his duties because of health reasons, as communicated on March 4, 2013. As Executive Chairman Karl Gernandt will take over CEO responsibility until further notice.

All proposals approved
The shareholders approved the annual report, the financial statements and the consolidated financial statements for 2012 and followed the Board of Directors’ recommendation to a dividend of CHF 3.50 per share. Payout is scheduled as on May 14, 2013.
 
The Annual General Meeting granted discharge to the Board of Directors and the Management Board for the 2012 business year.

Re-elections to the Board of Directors
Dr. Renato Fassbind, Juergen Fitschen, Karl Gernandt, Klaus-Michael Kuehne, Hans Lerch, Dr. Thomas Staehelin, Dr. Joerg Wolle and Bernd Wrede were re-elected to the Board of Directors for one-year terms.

Statutory Auditor
Ernst & Young AG, Zurich, was newly elected as the statutory and Group auditor for the business year 2013.

 
The next Annual General Meeting will be held on May 6, 2014.

Kuehne + Nagel Group

CHF million

1^st Quarter 2013

1^st Quarter 2012

Turnover

5,094

4,834

Gross profit

1,537

1,502

Operational result (EBITDA)

219

153*

EBT

171

103*

Net earnings

134

68*

*Including one-off item of CHF 65 million.

Seafreight
Kuehne + Nagel increased its container volume by 2.3 per cent. In the trades from Europe to Asia, Kuehne + Nagel suffered a volume decline and just grew moderately in the opposite direction. On most other routes, however, volume increases between 5 and 10 per cent were realised. With measures taken to streamline the cost structure, EBIT-to-gross profit margin (28.6 per cent / previous year: 28.3 per cent) and EBITDA will continuously improve.

Airfreight
In airfreight, Kuehne + Nagel succeeded in increasing its volumes by approximately 5 per cent, opposite to the market declining by 2 per cent. Apart from the favourable demand situation in the Asian export business, the company moderately increased its tonnage in outbound traffics from Europe. Efficient cost management and productivity improvements led to an increase of the EBIT-to-gross profit margin from 23.5 to 24.2 per cent. EBITDA improved by 9.3 per cent compared to the previous year.

Contract Logistics
The restructuring measures in the contract logistics business unit showed very positive effects. Currency adjusted, net turnover rose by 2.5 per cent. EBITDA increased by 27.3 per cent compared to the previous year’s period. The EBITDA margin was at 3.8 per cent (2012: 3.1 per cent).

Road & Rail Logistics
The difficult economic situation in Europe impacted the development of both, business and results. In addition, adverse weather conditions throughout the first quarter negatively impacted the volume development. While results in the full and part loads segment improved, volume declines in the groupage business affected results negatively. Overall, EBITDA decreased from CHF 14 million in the previous year’s period to CHF 2 million in the first quarter of 2013. The EBITDA margin was unsatisfactory at 0.3 per cent.

Karl Gernandt, Chairman of Kuehne + Nagel International AG: “Particularly in view of the recessive economic situation in the euro zone, which also poses challenges for our company, we can be quite satisfied with the results of the first quarter 2013. The measures introduced to increase efficiency and improve profitability are working effectively, underlined by the performance of the business units airfreight and contract logistics. We will continue to focus on margin and cost management and are therefore confident to achieve further improvements. Growth opportunities will arise mainly in regions outside of Western Europe. In the first quarter 2013, we have seen positive developments particularly in North America, Middle East, Eastern Europe and South Asia.“ 

The report of the globally operating logistics group is accessible online and available for download at

http://www.kn-portal.com/about_us/investor_relations/annual_reports/