Kuehne + Nagel Group – Half-Year Results 2011

Positive business and result development in a challenging market environment

Net earnings in local currencies improved by 26.7 per cent

Schindellegi / CH, July 18, 2011 – During the first half of 2011, the Kuehne + Nagel Group achieved growth above the market average in all business units. Despite considerable negative currency effects, net earnings improved by 11.0 per cent (currency adjusted by 26.7 per cent) to CHF 312 million. The operational result (EBITDA) increased by 5.7 per cent (currency adjusted by 20.4 per cent) to CHF 502 million, while turnover at CHF 9,786 million was slightly below previous year’s level due to negative currency effects.

Kuehne + Nagel Group
CHF million First half 2011 First half 2010
Turnover 9,786 9,849
Gross profit 2,954 2,961
Operational result (EBITDA) 502 475
EBT 398 358
Net earnings 312 281

“The Kuehne + Nagel Group performed strongly in the first six months of 2011, despite a slowdown in market growth in the course of the second quarter and results negatively impacted by the strong Swiss Franc,” said Reinhard Lange, CEO of Kuehne + Nagel International AG.

With seafreight volumes increasing by 12 per cent in the first half of the year, Kuehne + Nagel succeeded in doubling the market growth rate of about 6 per cent. Highest growth was achieved in exports from Europe to North America and Asia as well as from Asia to Latin America and the Middle East.  EBITDA margin in relation to gross profit improved from 34.5 to 35.2 per cent, reaching a new record high as a result of cost efficiency and increased volumes. The operational result (EBITDA) was up by 7.8 per cent despite considerable investments in growth initiatives.

In airfreight, Kuehne + Nagel increased tonnage by 18 per cent, in spite of sharply declining volumes in the global airfreight market during the second quarter, resulting in a market growth of just about 2 per cent in the first half of 2011. Kuehne + Nagel’s expansion of activities in the field of perishable logistics following the acquisitions in South America as well as increased demand in the trade lanes from Europe to North America and Asia contributed to the strong performance. Also, the volume increased in trades from North America to Europe and to South America, whereas airfreight business from Asia to Europe did not reach expectations. EBITDA-to-gross profit margin improved from 29.2 per cent to 32.6 per cent. The operational result was 22.9 per cent higher than in the same period last year.

Road & Rail Logistics
The extension of activities in the groupage, full load and part load businesses led currency adjusted to a 21.4 per cent rise in net invoiced turnover. RH Freight, specialised in European groupage services and as part of the Kuehne + Nagel Group consolidated as of April 2011, contributed about 10 per cent to the increase of shipments. While the results in Western Europe clearly improved, the business unit’s 6.9 per cent decrease of EBITDA was due to investments in the organic development of overland services in countries such as Poland and China. EBITDA margin was at 1.8 per cent (previous year: 2.1 per cent).

Contract Logistics
In contract logistics net invoiced turnover rose currency adjusted by 5.4 per cent. New businesses and the consolidation of warehousing activities at major logistics centres supported the enhancement of capacity utilisation to 94 per cent. Thanks to productivity improvements, the EBITDA margin remained on the previous year’s level. The operational results increased currency adjusted by 6.5 per cent.

“Considering the debt crisis and currency situation in Europe as well as the volatile world economy, it is not possible to reliably forecast how the global  markets will develop in the second half of the year,” said Karl Gernandt, Chairman of the Board of Directors of Kuehne + Nagel International AG. “Market analysts anticipate slower growth in the logistics industry. Nevertheless, the Kuehne + Nagel Group is well positioned to tackle future challenges. While maintaining an effective cost management, the Group will continue to pursue its global strategy, focussing on investments in growth markets and -segments. In this context, the acquisition in Brazil announced today is a significant step.”

In addition to the publication of the half-year results 2011, please note Kuehne + Nagel’s press release “Expansion in Brazil“.

About Kuehne + Nagel

With more than 60,000 employees at 900 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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