Schindellegi / CH, April 16, 2012 - Despite further volume growth, cost increases, lower margins in the forwarding business and an antitrust fine of CHF 65 million imposed by the European Commission led to unsatisfactory results for the first quarter 2012. At CHF 4,834 million, turnover remained stable compared to the previous year's period (currency adjusted: increase of 5.4 per cent). Gross profit improved by 3.0 per cent (currency adjusted by 8.1 per cent) to CHF 1,502 million. The operational result (EBITDA) declined by 12.4 per cent to CHF 218 million, including the one-off item for the antitrust fine to CHF 153 million. Net earnings decreased by 14.2 per cent to CHF 133 million, including the one-off item to CHF 68 million.
Kuehne + Nagel Group | |||
CHF million | 1st Quarter 2012 | 1st Quarter 2011 | |
Turnover | 4,834 | 4,820 | |
Gross profit | 1,502 | 1,458 | |
Operational result (EBITDA) |
218 |
249 | |
EBT |
168 |
196 | |
Net earnings |
133 |
155 | |
"In the first quarter of 2012 we had to cope with a number of adverse factors," said Reinhard Lange, CEO of Kuehne + Nagel International AG. "Our investments in growth initiatives resulted in considerable cost increases. We will counteract this trend with strict cost control and measures to improve productivity. Furthermore, profit margins declined in sea and airfreight. In addition, there are one-off charges due to a high antitrust fine, which was reported on March 28, 2012. Nevertheless, we achieved growth above market average."
Seafreight
In seafreight, Kuehne + Nagel increased container volume by
9 per cent while - according to first estimates - the
global container market grew between 3 and 4 per cent. In
line with its strategic goals, Kuehne + Nagel increased
growth in the transatlantic and transpacific trades. As a
result of margin pressure, influenced by significant rate
increases in several trade lanes, and high investments in
IT and sales, EBITDA-to-gross profit margin declined from
35.9 per cent to 30.3 per cent. The operational result
decreased by 15.2 per cent compared to the previous year's
period.
Airfreight
The international airfreight market experienced a
significant volume decline in the first three months of
2012, resulting in a contraction of 3 per cent after an
encouraging volume development in the same period of 2011.
Kuehne + Nagel raised tonnage by 4 per cent. Beside the
ongoing positive demand in South America, the intra-Asia
business developed well and volumes increased in the trades
from Asia-Pacific to the Middle East, partly due to the
acquisition of an Australian company specialised in
Perishables Logistics. Investments in growth initiatives
and IT resulted in a decline of the EBITDA-to-gross profit
margin from 32.3 per cent to 26.5 per cent. At CHF 54
million, EBITDA was 14.3 per cent below the previous year.
Due to the inclusion of the one-off item for the antitrust
fine a loss of CHF 11 million was recorded.
Road & Rail Logistics
Good progress was made in the European overland business.
Freight volumes increased in the segments groupage and full
and part loads despite the difficult economic situation in
Southern Europe. The British RH Freight Group, member of
the Kuehne + Nagel Group since 2011, considerably
contributed to the overall improvement of net turnover by
18 per cent in local currencies. EBITDA increased by 7.7
per cent; at 1.9 per cent the EBITDA margin remained stable
at the previous year's level.
Contract Logistics
The contract logistics business saw divergent regional
developments in the first quarter of 2012. Strong demand in
Central Europe, Asia and South America resulted in an
increase of net turnover by 6 per cent (currency adjusted).
In contrast, high margin pressure and volume declines
especially in France and Southern Europe led to a decrease
of the business unit's operational result by 19.5 per cent.
EBITDA margin was at 3.1 per cent (previous year: 3.9 per
cent).
Reinhard Lange: "As a consequence of the experiences made in the first quarter of 2012, we have intensified our cost management. We are confident that the measures implemented as well as solid growth will contribute to an improvement of results in the second half of the year."
With more than 63,000 employees at more than 1000 locations in over 100 countries, the Kuehne + Nagel Group is one of the world's leading logistics companies. Its strong market position lies in the seafreight, airfreight, contract logistics and overland businesses, with a clear focus on providing IT-based lead logistics solutions.
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