Schindellegi, Switzerland — Kuehne + Nagel International AG (K+N), the large Switzerland-based freight forwarder and logistics company, reported sales in 2018 of 24.83 billion Swiss francs ($24.86 billion), 11.9 percent more than the 22.22 billion francs it reported in 2017.
K+N’s profit in 2018 was 772 million francs in 2018, 4.3 per cent more than the 740 million francs in 2017. Earnings before interest, tax, depreciation, amortization and impairment of property, plant and equipment, goodwill and other intangible assets (EBITDA) was 1.2 billion francs, a 5.1 per cent increase over the prior year, while earnings before interest and tax (EBIT) improved by 5.3 per cent to 987 million francs.
Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG, on the Group’s annual result: “2018 was another successful year for Kuehne + Nagel. Despite the market weakening at the end of the year, we succeeded in increasing our net turnover, gross profit and EBIT once again. The consistent implementation of our business strategy was decisive for this success. By introducing additional digital platforms, with new highly specialised solutions and targeted acquisitions, we reached important milestones last year and will continue to pursue our journey. Even though the growth momentum of the global economy slowed down at the end of 2018, we confirm our goals for the year ahead. In 2019, we aim at growing twice as fast as the market and improving our results further, complemented with selected acquisitions to our portfolio.”
Dr. Jörg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG, says: “The Kuehne + Nagel Group’s annual result demonstrates once again the company’s performance. In 2018, we expanded our position as a globally leading logistics provider and further improved our result. This confirms the strategic focus of the Kuehne + Nagel Group. In this context, the Board of Directors is looking with confidence to the 2019 financial year and ahead. In the medium and long term, the fundamental, all-encompassing transformation processes taking place in all areas of the global economy will continue to represent significant opportunities for Kuehne + Nagel going forward.”
Development of business units
With a 7.7 per cent growth in volume, Kuehne + Nagel gained again market share in seafreight and strengthened its position as the global market leader. The company handled 4.7 million standard containers (TEU) last year, representing an increase of around 335,000 TEU. Significant new business was won with KN ESP, a new digital supplier management system for key accounts introduced in early 2018. The company also launched another new digital platform—Sea Explorer—to provide customers with detailed comparisons for carrier services. Strong growth was recorded in the Asia-Europe trade and in US imports, particularly from Asia. In addition, intra-Asian trade lanes grew again last year. With three alliances and seven carriers in the market, the supply of capacity impacted margins which varied substantially, depending on region, trade lane and product. While the margins in European exports were under considerable pressure, those in Asia-Europe trade were growing. In this context, Kuehne + Nagel’s seafreight business achieved a solid EBIT that grew by 1.0 per cent compared to the previous year. The conversion rate (EBIT-to-gross-profit ratio) was maintained at an industry-leading high level of 28.2 per cent.
Airfreight continued its outstanding development in 2018. Kuehne + Nagel increased its tonnage by 11.0 per cent to 1.7 million tons, thereby achieving significantly higher growth than the overall market. Industry-specific solutions for the pharma & healthcare and aviation industries played an important role in this growth. Kuehne + Nagel pursues an active M&A strategy and acquired Quick International Courier, a company in a high growth market that is one of the global leaders in time-critical transport and logistics solutions. Due to this strong growth in volume, consistent cost control and further productivity gains, EBIT grew by 13.4 per cent in airfreight. At 29.5 per cent, the conversion rate was once again at a high level for the industry.
Kuehne + Nagel’s excellent results in overland continued in 2018, with the company achieving significant increases in net turnover, gross profit and EBIT. Net turnover grew by 13.1 per cent and gross profit by 14.3 per cent. EBIT improved by 55.1 per cent compared with the previous year. Business in European groupage and less-than-truckload shipments were the primary growth drivers, as well as intermodal shipments and transport management for major customers in North America. Industry-specific solutions for customers from the pharma & healthcare industry played a key role in this success. Kuehne + Nagel continues to expand on its digital competence and aims at systematically increasing the number of automated shipments to further raise efficiency.
In contract logistics, Kuehne + Nagel increased net turnover by 9.0 per cent and gross profit by 8.8 per cent. The company grew significantly in the USA and Asia. Growth rates of more than 40 per cent were achieved in e-commerce fulfilment. The EBIT remained below last year’s figure, down by 14.3 per cent, due to the review of the project portfolio and investments for a new global warehouse management system, used for the operational control of the Group’s worldwide fulfilment centers. Two acquisitions strengthened the company’s position as a leading international logistics provider for China’s automotive industry and expanded its e-commerce offering in Indonesia. Kuehne + Nagel managed 11.6 million square metres of warehouse and logistics space for its customers.