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Kuehne + Nagel reports higher gross profit as net turnover falls 19 April 2016

Net turnover falls 8.4% in sea freight and 7.3% in air freight

Kuehne + Nagel has continued the positive development of the second half of 2015 into the first quarter of 2016. While net turnover slightly declined 2.1% to CHF4,010.0 million, gross profit increased by 6.4% to CHF1,593.0 million. The operational result (EBITDA) grew by 11.2% to CHF259.0 million; earnings for the period improved by 10.5% to CHF169.0 million compared to the previous year’s period.

In sea freight, net turnover decreased 8.4% to CHF1,885.0 million. Overall, the Group increased its container volume by 6.0%, whilst the international sea freight market only grew by around 1.0%. At the same time, Kuehne + Nagel managed to improve its profitability. Gross profit per TEU rose by 1.4% and the EBIT-to-gross profit margin (conversion rate) from 29.0% in the previous year to 30.7%. EBIT increased by 13.8%.

In airfreight, net turnover decreased 7.3% to CHF1,287.0 million. In the global air freight market, no significant positive growth stimuli were recorded; as a result, volumes declined towards the end of the quarter. In the previous year’s period, volumes were additionally increased by a temporary shift of goods from sea to air freight due to the harbour strike on the US West Coast. Kuehne + Nagel counteracted the unfavourable volume development in North and South America with strong export business in Asia, the Middle East and Africa, and thus, managed to keep overall tonnage stable at the previous year's level. The sustainable profitability in this business unit is reflected in the conversion rate, which rose from 30.8% in Q1, 2015 to 31.1%. EBIT improved by 7.4%.

During Q1, 2016, net turnover in the Overland division increased by 18.4% compared to the previous year, significantly exceeding market growth. On the one hand, this can be attributed to the good performance of the American ReTrans Group, which was acquired in 2015, and on the other, to the solid development of activities in the European overland business. However, growth ambitions in several emerging markets could not be achieved in Q1, 2016 due to the economic situation. EBIT remained stable at CHF4.0 million.

In Q1, 2016, substantial new business in the Contract Logistics division was implemented in Asia, Europe and especially in the US. Compared to the previous year’s period, net turnover rose by 6.4%, clearly exceeding market average. Due to operational improvements and the stabilisation of drinks logistics in the UK, EBIT increased from CHF24.0 million in the previous year to CHF33.0 million.

Looking ahead, Kuehne + Nagel considers its market proximity and its understanding of current and future customer requirements as a solid basis for the further, positive development.