The main contributor to the Group’s result is the business unit Seafreight. In 2019, major profitability improvements were generated in the Seafreight and Contract Logistics business units.

Seafreight

Seafreight volumes increased by 3.6 per cent to 4,861,000 TEUs. Services for temperature controlled cargo in reefer containers and order management business have significantly contributed to the growth. Customers from the pharma and healthcare industry use Kuehne+Nagel to handle temperature-sensitive products. The exports from Asia to Europe and the US as well as the intra-Asia trade contributed to the strong volume growth. In 2019, EBIT increased by 9.1 per cent compared to the previous year, while the ratio of EBIT to gross profit (conversion rate) increased to 29.6 per cent (2018: 28.2 per cent).

It remains the Group’s target to achieve volume growth rates that are substantially above the market and thereby gaining market shares. Simultaneously, the Group’s focus is on the Sea and Airfreight profitability and continuous efficiency gains through productivity improvements.

Performance Seafreight

Airfreight

Due to the global reduction in Airfreight volumes, the Group had to record decreased volumes by 5.7 per cent to 1,643,000 tons, therewith holding the number two position as global airfeight provider. EBIT-to-gross-profit margin decreased to 25.0 per cent in 2019 (2018: 29.5 per cent). EBIT declined by 7.3 per cent compared to the previous year. In 2019 the Group was leveraging the industry-specific expertise acquired through Quick International Courier (as per 31.12.2018) and gained a substantial new customer base. Quick International Courier is a global market leader in time critical shipments and serves mainly the pharma and healthcare as well as the aerospace industry.

The Group has developed world class expertise in industry- and product-specific supply chain services through various strategic programs. Organic growth in areas such as perishables, pharma, and aerospace logistics, together with selected bolt-on acquisitions, continue to ascertain the Group’s leading position.

Performance Airfreight

Overland

Overland increased its net turnover by 1.7 per cent in 2019, with a strong performance of its land transport activities in Europe. The Group continues to expand its service offering through the acquisition of the Joebstl Group in Austria strengthening the access to the eastern European market and the acquisition of Rotra in Belgium and the Netherlands to further intensify the Europe-wide Overland transportation. The key performance indicator EBITDA to net turnover margin improved to 3.8 per cent from previous year’s 3.3 per cent. EBIT increased to CHF 78 million (2018: CHF 76 million).

With the expansion of services to industry-specific solutions, Overland has significantly contributed to the success of the Group’s integrated logistics offering.

Performance Overland

Contract Logistics

The focus on specialised end-to-end solutions for industries such as automotive, high-tech, consumer goods, aerospace, pharmaceuticals, healthcare, and e-commerce fulfilment led to numerous new customer contracts. This resulted in a (net of currency impact) net turnover growth of 5.8 per cent for 2019. More than 100 new logistics projects were implemented for customers in 2019, enabling the Company to manage 11.4 million square meters of warehouse and logistics space worldwide. At the same time the Group has focused on a customer portfolio that allows leveraging the other business units and makes use of scalable and sustainable logistics solutions. This has led to the reshaping of business size in some European countries including adaption of the real estate footprint. This initiative will continue in the years 2020 and 2021. The restructuring of the product, real estate, and customer portfolio as well as the impact from the new accounting standard IFRS 16 Leases in 2019 led to an increase of the EBITDA to net turnover margin to 15.1 per cent versus 5.1 per cent in 2018; EBIT increased by 43.5 per cent.   

Kuehne+Nagel further strengthened its global leading position in the field of integrated logistics. The Group offers specialised end-to-end supply chain management solutions, which are managed from Logistics Control Towers and performed in seamless operation with other business units, supporting customers to improve their value chain. Integrated logistics experts develop, implement and manage solutions that streamline the customer’s supply chain to make it lean, agile and demand-driven.

Performance Contract Logistics

1  Prior year figures have not been restated for the impact of IFRS 16 Leases.