In 2012, Kuehne + Nagel Group sustained its position in a highly volatile market environment. Compared to the previous year, the company increased volumes in all business units despite slower international trade growth. However, results were negatively impacted by declining profit margins, cost increases and an antitrust fine of CHF 65 million imposed by the European Commission in March 2012. Turnover increased by 5.9 per cent to CHF 20,753 million and gross profit improved by 3.3 per cent to CHF 6,094 million compared to the previous year. Operational results (EBITDA) declined by 5.8 per cent to CHF 921 million, including the one-off item for the antitrust fine to CHF 856 million. Net earnings decreased from CHF 606 to CHF 493 million.
Reinhard Lange, CEO of Kuehne + Nagel International AG, comments: “During the first two quarters, the international logistics industry suffered from the slowdown of growth in China and restrained consumer and investment spending in large parts of Europe. With the worsening of the sovereign debt crisis in the eurozone in the second half of the year, the economic climate deteriorated rapidly, and the decline of European imports and exports influenced trade with the emerging countries in Asia and South America. Overcapacity, unprecedented rate volatility and strong pressure on profit margins were the results of this development. While Kuehne + Nagel managed to increase its volumes in all business units, it was not able to compensate for margin pressure and higher costs, thus results decreased compared to the previous year.”
Seafreight
While the international container market grew by about 2 per cent in 2012, Kuehne + Nagel increased volumes by 6 per cent, handling approximately 3.5 million TEU. Particularly in the export business from Asia to North and South America and to the Middle East volumes increased considerably. In the Asia-Europe trades, volumes decreased slightly compared to the previous year, while double-digit growth rates were realised on the routes from North America and Asia to South America. Freight services for special products had positive results, for instance in the reefer container business and in beverage logistics. In the oil & gas and projects sectors, Kuehne + Nagel strengthened its position. However, the business unit’s high productivity did not entirely compensate for margin pressure and cost increases. As a result EBITDA decreased by 5.3 per cent.
Airfreight
In contrast to generally shrinking global airfreight markets, Kuehne + Nagel raised its tonnage by 2 per cent. The company maximised business opportunities in intra-Asian traffic and in the export from Asia to North and South America. In Europe, however, Kuehne + Nagel could not counter the prevailing negative trend and suffered a decline in volumes. Crucial factors for Kuehne + Nagel’s better than market performance were the expansion of its activities in Perishables Logistics, and intensified marketing of industry-specific airfreight solutions. A new service for pharmaceutical and healthcare industries, for instance, experienced strong market acceptance. Furthermore, new business was won in aerospace, hotel and marine logistics. While gross profit margin improved to 20.6 per cent compared to the previous year (19.8 per cent), EBITDA decreased by 9.1 per cent (excluding antitrust fine) in this segment of the business.