Kuehne + Nagel growth accelerates, records significant market share gain in first 9 months of 2017

October 16, 2017: In the first nine months of 2017, the Kuehne + Nagel Group’s growth momentum accelerated sequentially in the quarters. All business units recorded significant market share gains. Compared to the same period last year, net turnover increased by 10.4 percent to CHF 13,525 million and gross profit by 4.8 percent to CHF 5,136 million. The operational result (EBITDA) improved by 2.8 percent to CHF 840 million and earnings for the period by 1.3 percent to CHF 540 million.

“With strong volume growth and active cost management we further improved results in the third quarter in line with our expectations. In sea freight a margin improvement was achieved in the third quarter. The air freight, overland and contract logistics businesses contributed to significant profitability increases. The business development in the first nine months of 2017 confirms our strategic focus on value-creating solutions and makes us confident to reach our profitability targets we have set ourselves for the full business year,” said Detlef Trefzger, CEO of Kuehne + Nagel International AG.

Sea Freight
With a volume increase of approximately 8 percent in the first nine months of the year, Kuehne + Nagel confirmed its ability to achieve strong growth in a still demanding market environment. In total, the Group handled 230,000 TEUs more than in the previous year’s period, whereby the strongest volume increases were realised in all US trades. Kuehne + Nagel also achieved double-digit growth in the Latin America trades. The Group significantly improved its leading market position in the reefer container and LCL (Less-than-Container Load) operations. In the third quarter Kuehne + Nagel improved margins through further automation of internal processes, economies of scale and efficient cost management. The EBIT-to-gross profit margin (conversion rate) was at a high level of 29.2 percent; EBIT reached CHF 308 million.

Air Freight
In the first nine months of the year, Kuehne + Nagel increased volumes by 19 percent (+180,000 tons), growing more than twice as fast as the market. A key factor for this positive development was the company’s comprehensive offering of industry-specific airfreight solutions. New business was won in the pharmaceutical, high-tech and automotive industries. Perishables logistics continued to develop very successfully, thus further expanding Kuehne + Nagel’s position as the global market leader in this segment. Trillvane, the Kenyan perishables logistics company acquired in July 2017, has been part of the Kuehne + Nagel Group since September 2017. With strict cost control and productivity increases due to process automation Kuehne + Nagel compensated for margin pressure and maintained the conversion rate with 30.3 percent at previous year’s high level. EBIT improved by 3.2 percent to CHF 227 million.

Overland
Despite seasonal market fluctuations the successful development of the overland business continued in the third quarter. In the first nine months of 2017, net turnover increased by 5.2 percent and gross profit by 4.6 percent compared to the previous year’s period. All regions, in particular Europe and North America, contributed to this improvement. The groupage and full truckload shipments as well as industry-specific services were the key drivers for growth. As a result of the consistent and ongoing process optimisation, EBIT increased from CHF 18 million in the previous year’s period to CHF 36 million.

Contract Logistics
In the first nine months of the year, Kuehne + Nagel won a significant amount of new contracts, with business activities in Asia growing dynamically. The acquisition of two specialised pharma logistics companies in Italy and Turkey, which have now been integrated into the Kuehne + Nagel network, enables a further expansion in pharma logistics. E-commerce fulfilment equally performed very strongly. Gross profit increased by 7.7 percent, the operational result improved by 14.2 percent compared to the previous year’s period. EBIT increased by 14.0 percent to CHF 114 million.