Kuehne + Nagel’s growth accelerates

Compared with the prior year period, turnover increased by 15.9% to CHF 9.85 billion in the first half of 2010, with EBITDA up 1.9% to CHF 475 million and net earnings up 8.9% to CHF 281 million.

"The entire logistics industry has capitalised on the economic recovery, resulting in rising transport volumes and increased warehouse utilisation," said CEO Reinhard Lange.

Following strong volume growth in the first quarter 2010, demand in the global seafreight market accelerated in the second quarter, leading to shortages in shipping capacity and containers which resulted in significant rate increases.

With volume growth of approximately 20% in the first six months of 2010, Kuehne + Nagel outperformed the market and returned to its pre-crisis growth dynamics, gaining market share in all trade lanes and performing particularly well in the export business to South and North America.

However, due to sharply increased freight rates, the division’s EBITDA of CHF 204 million remained at the previous year’s level and the margin declined from 5.5% to 4.7%.

The international airfreight market experienced surprisingly high growth rates in the first half of 2010, and Kuehne + Nagel’s growth rate of 31% marked a record high. Volumes increased in all trade lanes, especially on the routes to and from Asia-Pacific.

The division’s EBITDA margin, which had been exceptionally high in the previous year’s period, normalised in the first half of this year to 5.4%.

Road & rail logistics: During the first half-year, the rapidly improving economy resulted in considerable volume growth in the European overland transport market, although providers were exposed to high pressure on prices and fierce competition.

Expanding activity in groupage, LTL and FTL services led to a 13.3% increase (excluding currency impact) in net turnover for this division. Improved network utilisation as well as process standardisation and optimisation contributed to an increase of 52.6% in the operational result, and the EBITDA margin improved from 1.6% last year to 2.1%.

In contract logistics, the favourable market environment supported improved capacity utilisation and accelerated warehouse throughput. MNCs in particular showed great interest in providers offering global competence and standardised services.

The 4.7% increase in net turnover (excluding currency impact) reflected new business wins concluded and implemented in the first half of 2010. Warehouse utilisation was optimised, especially in North America. However, due to start-up costs, the operational result dropped 8% and EBITDA margin was 4.2%, down from 4.6% in H1 2009.

Executive vice chairman Karl Gernandt commented: "In the first half of 2010 the Kuehne + Nagel Group achieved its ambitious goal of gaining market share in all business units while demonstrating strong profitability. As a result of the previous year’s investments in sales and product development, Kuehne + Nagel over-proportionally benefited from the improvement in global trade."