Kuehne + Nagel registers 18% EBIT decline in first half of 2020

July 21, 2020: Kuehne + Nagel reported CHF 9.8 billion ($10.44 billion) net turnover and CHF 419 million ($446 million) EBIT for the first half of 2020 ended on June 30 with 7.5 & 18 percent decline respectively.

Currency fluctuations had decreased the net turnover by 5.9 percent and EBIT by 5.3 percent in the first half-year. Free cash flow increased by 5.5 percent relative to the previous year.

Sea logistics

In the second quarter of 2020, container volume declined by 11.7% year-on-year to 1.1 million TEU. Sea Logistics net turnover fell to almost CHF 1.7 billion and EBIT to CHF 88 million.

“In the first half of the year, a clearly negative market environment translated to reduced shipping volumes and a decline in business for Sea Logistics. Kuehne+Nagel was able to gain market share in select, high-yielding industries including pharma, reefer transport ande-commerce. The good volume development in these areas and the cost management did not fully compensate the significant decline in the high-yielding SME customer portfolio,” said the release.

Air logistics

At 315,000 tonnes, air freight volume in the second quarter of 2020 was 22.0% below the same period of the previous year. Net turnover rose to CHF 1.4 billion and EBIT to CHF 110 million.

“A high demand for crisis goods in the second quarter 2020 led to a short-term, beneficial shift in the product mix. Furthermore, the air logistics business unit purchased charter capacity for its customers on a targeted basis as belly capacity on passenger flights was not available during the second quarter of 2020.These factors, combined with active cost management, produced attractive profitability along with expanded market share. With the gradual resumption of passenger services since June, a slight normalisation of the general market conditions is visible,” said the release.

Road logistics

The business unit’s net turnover declined to CHF 721 million in the second quarter of 2020 and EBIT was down to CHF 9 million.

“The months of April and May 2020 were characterised by a significant decline in Road Logistics order volume. However, demand noticeably revived since the month of June. In particular, the demand for domestic European transport has broadly improved to pre-crisis levels. In North America, demand for all product segments – with the exception of pharma and e-commerce – was significantly lower than in the previous year,” said the release.

Contract logistics

The business unit’s net turnover declined to CHF 1.1 billion and EBIT to CHF 28 million in the second quarter of 2020.

“In contract logistics, the significant reduction in demand in the second quarter of 2020 was mitigated by stringent cost management.Essential goods and e-commerce, which now account for around half of the Contract Logistics portfolio, recorded significantly higher demand. Securing operations, even during the lockdown, resulted in market share gains,” said the release.

Extraordinary general meeting

The Board of Directors of Kuehne + Nagel International AG has decided to propose a dividend of CHF 4.00 per share to shareholders at an Extraordinary General Meeting on September 2, 2020.

"Management and the Board of Directors have continuously assessed and proactively addressed the developments and economic situation during the pandemic. In view of the good results, the strong resilience of the company, the stable cash flow and the available liquidity, we have decided to propose to the shareholders an appropriate participation in the company's success in 2019 with a dividend of CHF 4.00 per share," said Dr. Joerg Wolle, Chairman of the Board of Directors. "Notwithstanding the gradual easing of the market situation, Kuehne+Nagel will continue to closely monitor the effects of the corona crisis in the second half of the year."