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Kuehne + Nagel Group – First quarter 2018

A good start into 2018

Significant increase in EBIT and net profits
Seafreight increases EBIT with stable margins
Airfreight continues strong growth
Substantial increase in Overland results
Business expansion in Contract Logistics

Schindellegi / CH, April 24, 2018 – The Kuehne + Nagel Group recorded a successful start into 2018 with considerable increases in EBIT and earnings for the period. The company thus confirmed the growth momentum of the last two quarters 2017 in the first three months of the current business year.

Kuehne + Nagel Group 1st quarter 2018 1st quarter 2017 Variance
CHF million
Net turnover 4,862 4,299 +13.1%
Gross profit 1,843 1,648 +11.8%
Operational result (EBITDA) 289 257 +12.5%
EBIT 236 209 +12.9%
Earnings for the period 184 165 +11.5%

Seafreight
In a challenging market environment, Kuehne + Nagel increased volumes by 5.0 per cent, recording market share gains in specific customer groups. In the first quarter, the company handled 1.079 million (TEU), some 50,000 more than in the previous year’s period. Volume growth was only held back by the decline in exports of recycling material to China following changes to import terms. With rapid growth in intra-Asian transport operations and exports from Asia, margins overall increased slightly. EBIT grew by 4.3 per cent to CHF 97 million, with EBIT- to-gross-profit ratio (conversion rate) at an industry-leading level of 27.2 per cent.

Airfreight
Airfreight continued to build on its previous year’s outstanding performance, with solution-oriented, industry-specific offerings. Tonnage increased once again by more than 20 per cent to 422,000 tonnes, including the successful integration of two acquisitions. Particularly strong growth was recorded for exports from North America. EBIT rose by 12.5 per cent from the already very high level of the previous year, reaching CHF 81 million. The conversion rate remained high at 28.6 per cent due to effective cost controls and the further digitalisation of internal processes.

Overland
Kuehne + Nagel’s overland business continues to deliver results on growth track. Net turnover increased by 16.4 per cent in the first quarter, while gross profit rose by 16.8 per cent. Key factors for this were the intermodal transport in North America which increased compared to the second half of 2017 and the continuing strong business performance in Europe. Once again, the drivers behind this growth were industry-specific solutions, particularly for the pharma industry. EBIT improved by CHF 17 million compared to the previous year’s period.

Contract Logistics
Due to a dynamic business performance, contract logistics grew twice as fast as the market. Double-digit increases in China and South-East Asia were crucial as well as significant business wins, in particular in the area of e-commerce fulfilment. Gross profit increased by 11.3 per cent compared to previous year’s period. The realignment of the production model at a business in the UK coupled with the costs of introducing innovative technologies and new systems led to an EBIT of CHF 34 million slightly down from the previous year.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG: “We have made a successful start into the business year and achieved clear increases in volume across all business units. Building on this growth combined with further productivity improvements we were able to considerably increase our results in the first quarter. At the start of the new year we implemented two new digital platforms globally, SeaExplorer and KN ESP, addressing specific customer requirements and creating significant efficiency gains. Another important milestone is the opening of two innovation centres where we we develop innovative solutions in contract logistics together with customers. We are determined to continue on this path.”

Source: K&N
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