[ Kuehne & Nagel 1997, Forwarding and Logistics Group... ]

Forwarding and Logistics Group Presents Top Results - Holding Company
Again with Higher Dividend

The Kuehne & Nagel group has produced top results for the business yea
r 1997. Its turnover of Sfr. 6.243 billion increased by 20.8 per cent
compared to 1996. Net turnover rose by 21.4 per cent to Sfr. 4.779 bil
lion. the gross profit, which in the forwarding business provides a be
tter indication of company performance than turnover, improved by 17.4
per cent to Sfr. 1.168 billion. With income before tax of Sfr. 125.6
million - representing a 16.5 per ent increase over 1996 - the organiz
ation achieved the best result in its 108-year history.
Logistics and overland transportation accounting for 41.1 per cent pro
duced the largest share of gross profit. Further substantial contribut
ions came from the ocean and airfreight divisions with 26.2 and 22.2 p
er cent, respectively. In regional terms, Germany made the largest con
tribution to gross profit with 35.5 per cent, while the rest of Europe
provided 33.4 per cent, North, Central and south America 19.2 per cen
t and the Asia-Pacific region 10.7 per cent.
The ocean and airfreight divisions form the backbone of Kuehne & Nagel
’s global operations. they continued to achieve, renewed growth and g
enerate high revenue levels. Followin the adoption of a new strategica
l orientation, Europe-wide logistics operations - revolving primarily
around transport, warehousing and the distribution of industrial and c
onsumer goods - were intensified and expanded still further. Contracts
were signed with a number of major clients for the area of European s
ystem logistics. These are expected to culminate in sizeable order vol
umes.
Specialisation enabled some divisions to continue expanding and develo
ping. Among others, this entailed transport services for perishables,
industrial goods and supplies for the oil and energy sectors, plus aid
and relief deliveries to developing countries.
Although the truck continues to dominate the various carrier types wit
hin Europe, Kuehne & Nagel’s particular concern with the environmenta
lly-friendlier rail transport again produced pleasing results. Whereve
r possible, the similarly ecological inland waterways were used for tr
ansport.
Within the West European organization, the year under review not only
saw greatly enhanced results from the traditionally strong companies i
n Great Britain, Greece, Luxembourg, the netherlands, Spain and Turkey
, the same also applied in Italy, Portugal and Switzerland. The ocean
freight operations of a french subsidiary also ran uccessfully. There
is continued need for reorganization in Austria and the Scandinavian c
ountries. The Belgian company was severely hit by the one-off expense
for restructuring its warehousing and distribution operations.
Business in Eastern Europe proved progressively encouraging. One highl
ight was the Polish company’s opening of a large warehouse complex in
Poznan. Storage and distribution operations also expanded markedly in
other eastern European countries.
In Canada and the USA, the Kuehne & Nagel group’s second and third st
rongest national companies after Germany produced very solid results.
While the consolidation of warehousing operations proved feasible in C
anada, international ocean and airfreight ativities dominated in the U
S.
The patterns in Latin America were varied. Commercial trends in Brazil
proved particularly positive, while improvements wer recorded in Chil
e and Columbia. By contrast, management problems led to setbacks in Ar
gentina and Ecuador.
In spite of the economic turbulence afflicting a number of Far East co
untries since autumn 1997, the regional Kuehne & Nagel organization ma
naged to show a very good overall result for the year. The negative de
velopments in the area had only affected Kuehne & nagel volumes margin
ally when the year closed. This is not least because any impact on tra
ding currents tends to be delayed.
The Africa and Near/Middle East regions were incorporated into the Ger
man and West European Kuehne & Nagel groups, respectively. The goal is
to release additional management resources for developing the various
national companies.