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Careful capacity planning and active cost management minimises Covid-19 impact
Despite the challenges posed by the coronavirus pandemic and the global lockdown, the Kuehne+Nagel Group achieved a good result in the second quarter of 2020 thanks to market share gains and the cost savings initiated throughout the Group.
Net turnover for the first half-year was $10.5 billion and EBIT was $450 million. Currency fluctuations had a significant negative impact on both net turnover (-5.9%) and EBIT (-5.3%) in the first half-year. Free cash flow increased by 5.5% relative to the prior year.
Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG, commented: "The crisis triggered by the coronavirus pandemic, which led to a lockdown in most countries, had profound and sudden negative impacts on international trade.
"We took the right measures early on and successfully managed Kuehne+Nagel under these difficult conditions.
"We expect the second half of the year to continue to be marked by major uncertainties, for which Kuehne+Nagel is well prepared thanks to its agile structure, rigorous cost management and high-quality service offerings.”
Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG, commented: "The company has been consistently digitalised and thus remained fully operational throughout the crisis.
"The successful performance in the second quarter is owed to the good market position of Kuehne+Nagel and the recovery of the Asian markets."
In the first half of the year, a clearly negative market environment translated to reduced sea cargo shipping volumes and a decline in business for Sea Logistics. Kuehne+Nagel was able to gain market share in select, high-yielding industries including pharma, reefer transport and e-commerce.
At 315,000 tonnes, air freight volume in the second quarter of 2020 was 22.0% below the same period of the previous year. Net turnover rose to $1.5 billion and EBIT to $118 million.
Further progress was made in the automation of processes, especially in the implementation of AirLOG, Kuehne+Nagel’s proprietary transport management solution and key to digitalisation.
April and May 2020 were characterised by a significant decline in Road Logistics order volume. However, demand noticeably revived since the month of June.
Due to the high level of market acceptance, the digital booking platform eTrucknow was extended to additional countries in Asia. Net turnover for the business unit declined to $773 million in the second quarter of 2020 and EBIT was down to $9.6 million.
In Contract Logistics, the significant reduction in demand in the second quarter of 2020 was mitigated by stringent cost management.
Essential goods and e-commerce recorded significantly higher demand. Securing operations, even during the lockdown, resulted in market share gains.
The business unit’s net turnover declined to $1.2 billion and EBIT to $30 million in the second quarter of 2020.