Freight Forwarding Group Announces Quarterly Figures and Appoints RediRack for Warehousing Conformit

SWITZERLAND – UK – US – Swiss headquartered freight forwarding and logistics group Kuehne + Nagel announced a positive first quarter result in its air freight unit and, following recent financial releases from other air cargo carriers, this positive result could be taken as a ‘sign of stabilisation’ as reported by International Air Transport Association (IATA). The Q1 results also showed an improvement in the Group’s internal efficiency and profitability, resulting in positive achievements in the contract logistics sector. Turnover increased by 5.4% to CHF 5,094 million compared to CHF 4,834 million in the previous year’s period. Gross profit improved by 2.3% to CHF 1,537 million and at CHF 219 million, the EBITDA was above the previous year’s level. Net earnings amounted to CHF 134 million, up from last year’s figure of CHF 68 million. Karl Gernandt, Chairman of Kuehne + Nagel International AG:

“Particularly in view of the recessive economic situation in the euro zone, which also poses challenges for our company, we can be quite satisfied with the results of the first quarter 2013. The measures introduced to increase efficiency and improve profitability are working effectively, underlined by the performance of the business units airfreight and contract logistics. We will continue to focus on margin and cost management and are therefore confident to achieve further improvements. Growth opportunities will arise mainly in regions outside of Western Europe. In the first quarter 2013, we have seen positive developments particularly in North America, Middle East, Eastern Europe and South Asia.“

The Airfreight division succeeded in increasing its volumes by approximately 5% and, apart from the favourable demand situation in the Asian export business, the company moderately increased its tonnage in outbound traffics from Europe. Efficient cost management and productivity improvements led to an increase of the EBIT-to-gross profit margin from 23.5 to 24.2%. EBITDA improved by 9.3% compared to the previous year.

In the group’s Seafreight sector, Kuehne + Nagel increased its container volume by 2.3%. In the trades from Europe to Asia, Kuehne + Nagel suffered a volume decline and just grew moderately in the return route. On most other routes volume increases between 5 and 10% were realised. With measures taken to streamline the cost structure, EBIT-to-gross profit margin (28.6%, up from the previous year’s 28.3%) K+N says EBITDA will continuously improve.

In Contract Logistics, the restructuring measures showed very positive effects. Currency adjusted, net turnover rose by 2.5%. EBITDA increased by 27.3% compared to the previous year’s period. The EBITDA margin was at 3.8% up from 3.1 % in 2012.

The difficult economic situation in Europe impacted the development of the Road & Rail Logistics division’s business and results. In addition, adverse weather conditions throughout the first quarter negatively impacted the volume development. While results in the full and part loads segment improved, volume declines in the groupage business affected results negatively. Overall, EBITDA decreased from CHF 14 million in the previous year’s period to CHF 2 million in the first quarter of 2013. The EBITDA margin was unsatisfactory at 0.3%.

Away from the financial headlines K+N has signed a preferred supplier agreement with UK based pallet racking specialists RediRack, while Kuehne + Nagel North America is further extending its logistics network in the Southeast of the US by opening a new location in Mobile, Alabama.

The agreement with RediRack, the best known of the individual brands within the RediGroup, means that RediRack is one of only two preferred storage systems suppliers for Kuehne + Nagel and allows RediRack to provide a national service for the provision of storage systems to Kuehne + Nagel’s distribution centres throughout the UK. The deal gives Kuehne + Nagel consistent storage systems design, quality and pricing, compliance with all relevant statutory and industry regulations and installation to SEMA standards plus the same high levels of service delivery across all its UK sites.

David Jarvis, Procurement Category Manager for Kuehne + Nagel and Andrew Forsythe Managing Director of RediGroup signed the agreement at the recent IMHX. Andrew Forsythe said that the company has worked hard to put a package together that would provide a level of support to Kuehne + Nagel that he believes is second to none. He added that he looks forward to their business relationship growing as they continue to exceed Kuehne + Nagel’s expectations. David Jarvis commented:

“At Kuehne + Nagel, we take pride in providing a truly world class logistics service. RediRack understand this and have proved that they can support our needs in key areas. We are thrilled that they will be a preferred supplier for us.”

Meanwhile, the company’s new logistics centre in Alabama, located near major interstates with access to the East Coast, Gulf Coast and Atlanta’s International Airport, will focus on offering logistics solutions to companies from the aerospace industry as well as from the oil and gas and marine sectors. Sam Jones, the mayor of Mobile said:

"Mobile is a winning city with limitless opportunities and we are proud to welcome Kuehne + Nagel as one of our newest corporate partners. We are pleased that this major global logistics provider is committed to cater for the increasing demands in Mobile. We know without doubt that the business character of our city will benefit from the global innovations of Kuehne + Nagel’s experience in aerospace and other key industries.”

With its global 'Supply the Sky' programme, Kuehne + Nagel intends to offer a complete range of logistics services for the aerospace industry. The company develops and implements customised solutions for companies in the field of maintenance, repair, overhaul, ground handling and in-flight services. Juergen Gentzke, Vice President South East region of Kuehne + Nagel North America added:

"In particular, aerospace has been a key industry for Alabama, now home to more than 400 aerospace companies, providing services in the fields of space, defence, maintenance, repair, manufacturing and related segments. Our new Mobile location enables the effective implementation of our ’Supply the Sky’ aerospace logistics portfolio in the Southeast."