In the first half year of 2017, the Kuehne + Nagel Group gained market shares in all business units. Net turnover increased by 8.2% to CHF8,815m compared to the previous year’s period and gross profit grew by 3.7% to CHF 3,377m. EBITDA improved by 1.3% to CHF554m and with CHF356m earnings for the period reached last year’s level.
Detlef Trefzger, CEO of Kuehne + Nagel International AG, commented: “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 sea freight and air freight. 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.”
With a volume increase of 7.7% in sea freight, 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 was at a high level of 28.8% and EBIT amounted to CHF198m.
Volumes grew in air freight as well. With an over 18% increase in tonnage in the first half of 2017, Kuehne + Nagel grew about double the market. A strong demand for industry-specific air freight solutions has made a significant contribution to this positive development. New business was gained particularly in the pharma, aerospace and perishables industries. Strict cost control and productivity increases due to process automation countered the margin pressure and kept the conversion rate stable at 30.6%, reaching previous year’s high level. With CHF 151m, EBIT improved by 2.7% compared to the previous year.
In the overland business, net turnover increased by 3.3% and gross profit by 3.5%, compared to the previous year. This was 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 CHF17m in the previous year’s period to CHF29m in the first half of the year 2017 reflects the significant improvement of the operational performance.
In contract Logistics, gross profit increased by 6.6% and EBITDA by 10.5%. Compared to the previous year, an additional 540,000 sq m of warehousing and logistics space were added to operations.
Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG, commented: “The half-year results of 2017 reflect the continuous strength of our Group which makes us confident for its further development despite that sea freight and air freight 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.”
Source: Kuehne + Nagel
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