Panalpina with solid start into 2011

In the first quarter of 2011, the Panalpina Group reported strong double digit growth in profitability compared to the first quarter 2010 and volume increases in Air and Ocean Freight. Gross profit increased by 14% (+22% currency adjusted) year-on-year to CHF 373 million which, together with ongoing cost discipline, led to a jump in EBITDA to CHF 56 million (Q1 2010: CHF 10 million). The growth in profitability and improvements in working capital management resulted in an excellent operating cash flow of CHF 108 million (Q1 2010: CHF -13 million).


“Panalpina has started very solidly into the year“, said CEO Monika Ribar. “We have been able to take advantage of the measures we put in place last year which have enabled us to improve our profitability. In the first quarter, gross profit grew across all segments and recorded strong increases in all regions, led by the emerging economies in Asia Pacific and Latin America”. She added: “Gross profit per ton and per TEU recorded double-digit growth despite the adverse impact from the strong Swiss franc”.

Currencies impacted financial results
The ongoing strength of the Swiss franc again had a major effect on the financial results. Gross profit was impacted by almost 8% and amounted to CHF 373 million in the first quarter of 2011, an increase of 14% (+22% currency adjusted). However, currencies had no material impact on margins.

Panalpina Group: Results for the first quarter of 2011 (CHF millions)

(CHF millions)   Q1 2011   Q1 2010  
Net forwarding revenue   1’651.9   1’587.8  
Gross profit   373.4   327.4  
EBITDA   55.6   10.1  
EBIT   46.4   (0.6)  
Consolidated profit   34.9   0.0  
First Quarter Results 2011 – Datasheet 521 Kb
First Quarter Results 2011 – Investor Presentation 647 Kb
Gross profit increase across all segments
In Q1 2011, Panalpina recorded a gross profit increase across all segments. Gross profit per ton of Air Freight and per TEU (twenty-foot equivalent unit) of Ocean Freight experienced double-digit growth. Air Freight recorded a gross profit increase of 24% to CHF 170 million (+32% currency adjusted) which was driven by higher volumes of 6% and strong yields. Gross profit per ton grew by 17% (+24% currency adjusted). Ocean Freight volume increased by 2% and gross profit grew 12% (+20% currency adjusted) to CHF 113 million resulting mainly from higher yields. Gross profit per TEU increased by 10% (+16% currency adjusted). In the Logistics segment, gross profit grew by 1% (+8% currency adjusted) to CHF 90 million.

Strong cash flow generation

Operating expenses of CHF 318 million remained almost flat year-on-year, helped by the strong Swiss franc. In the first quarter of 2011, the EBITDA-to-gross profit margin increased to 14.9% from 3.1% in the same quarter of 2010. At the same time, the net working capital intensity reached a new all-time low of 1.3% at the end of March 2011 compared to 2.2% at the end of March 2010. These significant improvements in profitability and working capital management led to a boost of operating cash flow, which grew to CHF 108 million in the first quarter of 2011 compared to CHF -13 million in the first quarter of 2010.

Acquisition of Grieg Logistics approved by competition authorities
On March 22, the Norwegian Competition Authority approved Panalpina’s acquisition of Grieg Logistics which was announced in February. The company has been officially rebranded Panalpina Grieg. Customers have clearly expressed their approval and support for the acquisition which creates an opportunity to expand Panalpina’s oil and gas presence in Norway while leveraging the two companies’ joint logistics know-how. Complete financial consolidation took effect on April 1, 2011.

Following a good start in 2011, CEO Monika Ribar commented that, “we are committed to further growing our business and strengthening our market position in all our core activities and especially in the emerging markets. We are focussing on increasing our volumes by continuing to meet our customers’ end-to-end logistics requirements. We still anticipate single digit market growth for both air and ocean freight this year with freight rates remaining slightly under pressure.

The Panalpina Group
The Panalpina Group is one of the world’s leading suppliers of forwarding and logistics services, specializing in end-to-end supply chain management solutions and intercontinental air freight and ocean freight shipments. Thanks to its in-depth industry know-how and state-of-the-art IT systems, Panalpina provides globally integrated door-to-door forwarding services tailored to its customers’ individual needs. The Panalpina Group operates a close-knit network with some 500 branches in over 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs approximately 15,000 people worldwide.


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