In the first quarter of 2019, Kuehne + Nagel recorded turnover of CHF*5,237m, corresponding to an increase of 7.7% year-on-year. Gross profit for the year was CHF1,978m (a 7.3% increase year-on-year) and EBIT totalled CHF242m (a 2.5% increase year-on-year).
Due to the implementation of the International Financial Reporting Standard (IFR) 16-Leases, EBITDA of the Group increased by CHF118m and EBIT by CHF3m in the first quarter of 2019. There was no material impact on earnings before tax.
In the Seafreight division, turnover grew by 12.3% year-on-year to CHF2,437m (2018: CHF2,170m), and EBIT expanded significantly, increasing by 15.5% year-on-year to CHF112m (2018: CHF97m). This was driven by a 6.2% growth in volume. The Group managed the transport of 1.146m standard containers (TEU) in its networks – almost 70,000 units more than in the previous year’s period. Imports from North American and European markets to Asia fell slightly in the first quarter (- 2% to 3%) reflecting the import restrictions on recycled materials and agricultural products. Kuehne + Nagel, however, was able to achieve a double-digit volume increase of Asian exports to North America and Europe. The EBIT-to-gross-profit ratio (conversion rate) grew to 29.3% (previous year: 27.2%).
Turnover in the Airfreight business increased by 4.7% year-on-year to CHF1,372m (2018: CHF1,310m ). Following significant increases in tonnage in the previous years, the air freight volume dropped slightly by 3.1% to 409,000 tonnes in the first quarter of 2019 against the backdrop of a declining market. The business unit developed nearly in line with the overall air freight market, which declined by 2% to 3%. Since the start of the year, the Group has integrated the business operations of Quick International Courier – a market leading provider of time-critical transportation and logistics solutions for the pharma & healthcare and aviation industries – contributing to a significant increase in gross margin. EBIT in the Airfreight business reached CHF80m, which was almost consistent with the very high level of the previous year.
In Overland, turnover increased by 10.8% year-on-year to CHF1,037m (2017: CHF936m) and EBIT CHF24m (same as in 2018). The Overland business reported a net turnover increase by 6% and gross profit by 8% in the first quarter. Kuehne + Nagel is continuing to achieve considerably stronger growth than the overland market as a whole. Intermodal transport in North America, where significant new business was won, and transportation networks in Europe both contributed to this result. Kuehne + Nagel stated that it is further developing its competencies in overland, with digital platforms and by expanding the European pharma trailer fleet. Operating EBIT increased considerably, taking into account that the prior-year period included a positive one-off effect of CHF6m.
Total revenue in the Contract Logistics segment increased by 7.1% to CHF1,477m (2018: CHF1,379m) but EBIT decreased by 23.5% to CHF26m (2018: CHF34m). In the first quarter of 2019, Kuehne + Nagel continued to restructure its contract logistics portfolio and active cost management. Net turnover grew by 6.3%, while gross profit increased by 4.9%. The implementation of a global warehouse management system that was initiated last year continued in the first quarter of 2019.
Detlef Trefzger, CEO of Kuehne + Nagel International AG: “Kuehne + Nagel got off to a good start in 2019. However, we find ourselves in an environment in which global economic growth is noticeably slowing. In this volatile market environment, we are focussing on introducing new digital platforms and specialised industry solutions. “
Source: Kuehne+Nagel
*$:CHF:1/€:CHF1.12
