Transportation Kuehne+Nagel up on the previous year in the third quarter

The logistics group Kuehne+Nagel increased its turnover in the third quarter compared to the same period last year. Demand picked up, not least due to the renewed supply chain disruptions.

Net turnover increased by 19 percent to CHF 6.49 billion and gross profit adjusted for volatile freight rates rose by 5 percent to CHF 2.19 billion, as the company announced on Wednesday. As a result, the profit figures also improved. Operating profit (EBIT) rose by 2 percent to 455 million and net profit by 6 percent to 339 million.

"Kuehne+Nagel's highly flexible logistics solutions have once again proven to be a clear advantage for our customers in the face of increasing supply chain disruptions worldwide," CEO Stefan Paul was quoted as saying. This is reflected in the positive business development.

Sea freight at a high

The company cited the online platform seaexplorer.com as an example. During the most recent supply chain disruptions, such as the crisis in the Red Sea or the port strikes on the US East Coast, this proved to be a reliable source of information for sea freight customers worldwide.

Sales in sea freight also increased significantly (+36%), while air freight grew by 20 percent. The smaller areas of overland transportation (+3%) and contract logistics (+2%) also saw an increase.

In Sea Freight, the increase in turnover also led to higher EBIT (+9%), while this fell in Air Freight (-12%).

Turnover expectations exceeded

The improvements are no surprise. Analysts had expected such improvements compared to the weak prior-year period after management had expressed confidence in the further course of business in the middle of the year.

Nevertheless, expectations were clearly exceeded in terms of turnover. The other key figures were more or less met.

Conversion rate over 20 percent

As a reminder: in 2023, the logistics group felt the effects of normalization following the coronavirus boom. The conversion rate, which describes the ratio of EBIT to gross profit and is an important indicator for management, was very low at 15.6% in the last quarter of 2023. It then rose again to 18% in the first quarter of 2024 and reached 18.3% in the second quarter.

It has now exceeded the 20% mark again at 20.8%. In the medium term, the company is aiming for conversion rates of 25% to 30% as part of its "Roadmap 2026" strategy.

For the first time since the end of the Covid-19 pandemic, EBIT and profit increased on a quarterly basis compared to both the previous quarter and the same period of the previous year, the company emphasized. The streamlining of the company by reducing the regional structure also contributed to the positive business development.

As usual, the company is not providing a concrete outlook for the current year.

SDA