Kuehne + Nagel recorded what it called a successful start into 2018 with “considerable increases” in EBIT and earnings over the first quarter of the year to continue the momentum built up over the second half of 2017.
Volumes in the seafreight division increased 5.0 percent, with K+N recording market share gains in specific customer groups. This translated to a total of 1.079m TEU shipped in the quarter, some 50,000 more than in same period of 2017. Volume growth was offset declines in exports of recycling material to China following changes to import terms. Stronger intra-Asia trade as well as exports from Asia saw margins increase slightly. As a result, EBIT grew by 4.3 percent to CHF 97m, with EBIT- to-gross-profit ratio (conversion rate) at 27.2 percent – a figure K+N claims is industry-leading.
K+N’s targeted, sector specific solutions drove airfreight tonnage increases of more than 20 percent to a total of 422,000 tonnes. Export growth from North America was noted as “particularly strong”, with the integration of two acquisitions was also significant in the volume growth. EBIT in the division of CHF 81m represented year-on-year growth of 12.5 percent.
Net turnover in K+N’s Overland segment rose by 16.4 percent in the first quarter, with gross profit up by a slightly higher 16.8 percent compared with Q1 2017. EBIT improved by CHF 17m compared to the previous year’s period. Intermodal transport in North America continuing strong business performance in Europe were behind the increases, as were the growth of sector specific solutions, particularly for the pharma industry.
K+N saw “double-digit increases” in China and South-East Asia as well as significant business wins, particularly in e-commerce fulfilment, saw its contract logistics segment grow “twice as fast as the market.” Gross profit was 11.3 percent higher when compared to Q1 2017, although changes to a business and costs associated with the introduction of new IT systems led to EBIT of CHF 34m, a slight reduction year-on-year.
Kuehne + Nagel’s CEO, Dr. Detlef Trefzger, said of the quarter’s results: “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…Another important milestone is the opening of two innovation centres where we develop innovative solutions in contract logistics together with customers. We are determined to continue on this path.”
Source: Kuehne + Nagel
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