Status Report

Business Units

 

The main contributor to the Group’s result remains the business unit Seafreight, whereby in 2016 the major improvements of the profitability were generated in the Airfreight, Overland, and Contract Logistics business units with 12.5, 300 and 23.5 per cent EBIT growth, respectively.


Seafreight

Seafreight volumes increased by 6.1% to 4,053,000 TEUs which represents a growth of about twice as strong as the overall market and further solidified the global leadership in Seafreight. The successful expansion of the reefer container and the Full Container (FCL) business contributed significantly. Customers from the  pharmaceutical and healthcare industries rely on Kuehne + Nagel to handle temperature-sensitive products. However, the effects of the continuing crisis in the shipping industry resulting in record low freight rates, margin pressure and the insolvency of a large Asian shipping company, also impacted Kuehne + Nagel negatively. Despite productivity increases, EBIT declined by 3.1 per cent compared to the previous year, while the ratio of EBIT to gross profit (conversion rate) was maintained at 31.4 per cent, a leading level in the industry.

 

Performance Seafreight

CHF million 2016 2015
Turnover 7,981 8,739
Net turnover 5,814 6,406
Gross Profit 1,416 1,381
EBITDA 465 485
EBIT 445 459
EBIT in per cent of Gross Profit 31.4 33.2
Number of operating staff 9,154 8,792
TEUs '000 4,053 3,820

Airfreight

In a volatile international airfreight market which showed growth only in the fourth quarter of 2016, Airfreight increased volumes by 4.3 per cent to 1,304,000 tons, thus strengthening Group's position as the number two global airfreight provider. The focus on industry-specific Airfreight services like KN EngineChain, a specialized service for production, spare parts logistics, and maintenance of aircraft engines for the Aerospace Industry has significantly contributed to this success. Kuehne + Nagel‘s leading offer for temperature-sensitive goods, pharmaceutical and perishable products, led to substantial new business. Profitability improvements were achieved through efficiency gains and margin expansion resulting in a conversion rate that increased from 29.3 per cent in the previous year to 30.9 per cent. The EBIT improved by 12.5 per cent compared to the previous year.

 

Performance Airfreight

CHF million 2016 2015
Turnover 3,935 4,014
Net turnover 3,347 3,424
Gross Profit 964 904
EBITDA 315 286
EBIT 298 265
EBIT in per cent of Gross Profit 30.9 29.3
Number of operating staff 5,734 5,563
Tons '000 1,304 1,250

Overland

Overland increased its net turnover by 11.9 per cent with strong expansion of land transport activities within Europe and the integration of ReTrans, a company that has been part of the Group since 2015, providing intermodal transports to Kuehne + Nagel‘s North American customers. The key performance indicator EBITDA to net turnover margin was with 2.4 per cent above the previous year’s 1.9 per cent (which includes the antitrust fine with a net impact of CHF 12 million imposed by the French Competition Authority in Q4 2015).

 

Performance Overland

CHF million 2016 2015
Turnover 3,130 2,825
Net turnover 2,898 2,589
Gross Profit 895 834
EBITDA 70 50
EBIT 28 7
Number of operating staff 7,894 8,186

Contract Logistics

The focus on specialized end-to-end solutions for industries such as automotive, e-commerce, high-tech, consumer goods, aerospace, and pharmaceuticals and healthcare led to new customer business in 2016 and resulted in a net of currency impact net turnover growth of 5.7 per cent. A total of more than 100 new logistics projects were implemented for customers in 2016, enabling the company to manage more than 10 million square meters of warehouse and logistics space worldwide. Continuous process improvements led to a significant increase of EBITDA to net turnover margin at 5.8 per cent versus 5.1 per cent in 2015 and an increase of EBIT by 23.5 per cent.

 

Performance Contract Logistics

CHF million 2016 2015
Turnover 4,939 4,705
Net turnover 4,466 4,312
Gross Profit 3,275 3,132
EBITDA 260 220
EBIT 147 119
Number of operating staff 35,866 33,925
Warehousing and logistics space in sqm 10,021,688 9,556,477