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Kuehne+Nagel Stabilise in 2023: Plans For Expansion

  • By The Swiss Times
  • 1 March 2024

After a booming period during the pandemic, Kuehne+Nagel prepares for growth normalization in 2023. The logistics giant faces a dip in key financial metrics but eyes future resilience.

Kuehne+Nagel Stabilise in 2023: Plans For Expansion
Keystone/SDA – GAETAN BALLY

Kuehne+Nagel grows amidst challenges, navigating through a year of financial recalibration in 2023. The logistics titan saw a downturn across the board, with net sales taking a 40% hit, landing at 23.8 billion Swiss francs. T

his decline mirrored across all quarters, notably in the last, affecting both sales and profit. The result? A trimmed dividend, set at 10 francs per share, down from last year’s 14 francs.

The financial strain didn’t spare gross profit, which adjusted for freight rate volatility, dipped by 21% to 8.8 billion. This downturn also halved both the operating result (EBIT) and net profit to 1.9 billion and 1.5 billion Swiss francs, respectively. These figures barely met analyst expectations, hinting at a cautious market sentiment.

Despite these headwinds, Kuehne+Nagel’s conversion margin, a critical industry metric, maintained a 22% standing, albeit lower than the previous year’s 34%.

This dip reflects the industry’s post-pandemic recalibration, yet the company remains optimistic, targeting a 25-30% margin in the medium term.

The last quarter offered a glimpse into the normalization, with net profit at 283 million Swiss francs and a conversion margin of nearly 16%.

The period also saw significant restructuring, with 53 million Swiss francs allocated to staff reduction efforts, marking the end of the pandemic-induced economic anomaly.

Kuehne+Nagel Expand

The “Roadmap 2026” initiative underlines its commitment to adapt and thrive amidst market shifts. The company is acquiring City Zone Express, headquartered in Malaysia.

Kuehne+Nagel announced on Friday that the acquisition would directly increase earnings. City Zone Express has its own fleet of 260 vehicles, over 500 employees and 80,000 square meters of warehouse space. The company offers cross-border logistics services in Southeast Asia and as far as China.

The growth markets of Asia offer an “attractive opportunity to further develop our overland transportation services”, Hansjörg Rodi, member of the Management Board of Kuehne+Nagel International, is quoted as saying. The transaction is expected to be completed in the coming months. Financial details were not disclosed.

©Keystone/SDA

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