Kuehne + Nagel this morning reported a 9.3% increase in adjusted ebitda for 2019, on the back of higher ocean freight volumes and revenues.
It recorded group annual revenues of Sfr21.1bn (US$21.4bn) last year, a 1.5% increase over 2018, while adjusted group ebitda was Sfr1.3bn compared with Sfr1.2bn the year before.
Chief executive Detlef Trefzger said: “In a changing market, we continued to see our strategy yield success. In sea freight and overland, our focus on customer service, cost-effectiveness, operational systems and digitalisation has once again paid off.
Its sea freight division posted a 4.6% increase in turnover to Sfr7.5bn, while ebit grew 9.1% to Sfr456m as it grew volumes above market – shipping 4.9m teu, up 3.6%.
Air freight was an entirely different story however, with declines in volumes, revenues and ebit, which blamed on the “drastic drop in demand for airfreight, particularly in key European industries and the perishables business”.
Air freight turnover declined 4.5% to Sfr4.7bn, volumes fell 5.7% against the previous year to 1.6m tonnes and ebit was down 7.3% to Sfr329m.
However, the company remained sanguine about its performance.
“Kuehne + Nagel’s airfreight proved resilient in this challenging business environment, thanks to the consistent expansion of the service portfolio, the focus on digital solutions, optimisation of the cost structure and the successful integration of Quick International Courier.
Its road freight and intermodal operations grew turnover by 1.7% to Sfr3.6bn as it “gained market share in a weakening market environment”, while ebit increased 2.6% to Sfr78m.
“The business unit added to the European network with the acquisition of Joebstl in Austria as well as Rotra, a leading road transport provider in the Belgium and the Netherlands.
“Business with large-scale customers continued to drive growth in North America, whilst the intermodal business weakened because of a falling oil price. The business unit expanded its presence in South-east Asia with the launch of a new digital booking platform,” it said.
Finally, its contract logistics division showed the highest level of profit growth as “the restructuring of the product and customer portfolio delivered results”.
Contract logistics revenues grew 2.8% to Sfr5.4bn, while ebit grew 43.5% to Sfr198m.
“The real estate portfolio was reviewed and adapted accordingly. Operationally, productivity gains and better service quality led to a sustainable improvement of results.
“With the opening of new distribution centres in Belgium, Germany and Luxembourg, the business unit focused on high-value growth in pharma & healthcare as well as e-commerce fulfilment,” it said.
Chairman Joerg Wolle added that, in terms of investment, the company’s attention would now firmly turn to the Asia-Pacific region.
“After concentrating mainly on Europe and the US in recent years, in terms of organisational measures and acquisitions, Kuehne + Nagel is now systematically and quite deliberately expanding its position in the Asia-Pacific region.
“The company has already built up a very strong position there. Kuehne + Nagel is firmly convinced that Asia will be the central driver of global economic development in the years to come. With the merger of our two Asian organisations, the company has created the perfect launchpad for further expansion in the region, both organically and through acquisitions,” he said.