Kuehne+Nagel reports 43% turnover decrease in Q2 2023

Kuehne+Nagel reported 38 percent decrease in its net turnover to CHF 12.7 billion in the first six months of 2023 and 43 percent decrease to CHF 5.9 billion in the second quarter of 2023 ended in June 2023 compared to the same period in 2022.

EBIT was approximately CHF 1.1 billion with earnings of CHF 860 million.

“The Group achieved solid results in a challenging market environment in the first half of 2023. The pandemic-related special economic situation in 2021 and 2022 continued to distort the year-on-year comparisons across the entire range of figures. The conversion rate, which describes the ratio of EBIT to gross profit of the Group, remained at a high level of 24 percent,” the release reads.

Stefan Paul, CEO of Kuehne+Nagel International AG, said, "Kuehne+Nagel coped well with the transition from the exceptional economic situation shaped by the pandemic. In a weakened economic environment, Sea and Contract Logistics gained market share and kept earnings stable. In contrast, volumes in Air Logistics declined broadly in line with the market. While our ongoing cost control efforts became more visible in the second quarter of 2023, our strategic path is unchanged with a focus on high-quality logistics services and an extraordinary customer orientation."

Air Logistics

Net turnover of the business unit Air Logistics for the first half of 2023 was CHF 3.5 billion, down 44 percent and EBIT was CHF 293 million, 65 percent decrease. The pace of declining volumes eased in the second quarter. Air freight volume in the first half of 2023 was 957,000 tonnes. The conversion rate was 31%.

In June 2023, Kuehne+Nagel signed an agreement to acquire Morgan Cargo, a leading Air Logistics provider in South Africa, the UK and Kenya. The company specialises in perishables, employs 450 logistics experts and handled 40,000 tonnes of air freight and 20,000 TEU in 2022.

Road Logistics

In the first half of 2023, the net turnover of business unit Road Logistics amounted to CHF 1.9 billion with EBIT of CHF 93 million. Processed order volume was around 12 million, comparable to the prior year period, and "network utilisation was consistently high," the company reported.

"One important factor driving the significant increase in EBIT in the first half of 2023 was the ongoing implementation of RoadLOG, Kuehne+Nagel’s proprietary transport management system (TMS) for road shipments," it reads.

Contract Logistics

The business unit Contract Logistics delivered net turnover of CHF 2.5 billion and EBIT of CHF 110 million in the first half of 2023.

The company reported, "The business unit gained market share particularly in North America, in the healthcare and e-commerce sectors. The utilisation of Kuehne+Nagel’s logistics space remained at a very high level."

Sea Logistics

In the first half of 2023, net turnover of the business unit Sea Logistics amounted to CHF 4.9 billion with EBIT of CHF 639 million. The conversion rate remained high at 49 percent. Container volume in the first half of 2023 was 2.1 million TEU.

"Kuehne+Nagel Sea Logistics was able to gain share in an overall market that declined by around 5 percent," it reads.

In spring 2023, Kuehne+Nagel entered into a partnership with Volvo Cars to use 5,500 tonnes of sustainable biofuels in maritime transport. Going forward, the transports for the Swedish car manufacturer will be carried out with significantly reduced fuel emissions.

Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne+Nagel International AG, said, "In the first half of 2023, the Kuehne+Nagel Group's financial results were significantly greater than the comparable figures of the pre-Corona period and the Group has performed well in the new environment. In the coming years, Roadmap 2026 will remain the key driver of Kuehne+Nagel’s strategic development. The program, launched in March 2023, was very positively received both internally and externally and we are already seeing the first successes. Our focus remains on the provision of high-margin services and the development of market potential in Asia, Africa and the Middle East."