Kuehne & Nagel International Ag · SIX:KNIN

Kuehne & Nagel International — Kuehne + Nagel International — FY2017 Earnings Presentation

35 slides from Kuehne & Nagel International's earnings presentation, Feb 28, 2018

  1. Slide 1: Analyst Conference – Full-year 2017 results

    Analyst Conference – Full-year 2017 results Kuehne + Nagel International AG 28 February 2018 (CET 14.00) | Zurich, Switzerland

  2. Slide 2: Forward-looking statements

    Forward-looking statements This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond the control of Kuehne + Nagel International AG, may cause actual development and results to differ materially from the

  3. Slide 3: Today, consumers expect everything to be available anytime and anywhere

    Today, consumers expect everything to be available anytime and anywhere. 28/02/2018 | © Kuehne + Nagel | Analyst Conference 3

  4. Slide 4: This creates a multitude of opportunities for our integrated business model

    This creates a multitude of opportunities for our integrated business model... 28/02/2018 | © Kuehne + Nagel | Analyst Conference 4

  5. Slide 5: … leading to good results in 2017

    … leading to good results in 2017 Group’s earnings for the year with CHF 740 million again over last year Strong volume increase in Seafreight of 7.5%, i.e. 302,000 TEUs Strong volume increase in Airfreight of 20.4%, i.e. 266,000 tons Overland with sizeable contribution to Group EBIT of CHF 49 milli

  6. Slide 6: Overview Group performance 2017

    Overview Group performance 2017 + CHF 2’069 m + CHF 473 m + 12.5% + 7.2% + CHF 19 m + CHF 0.17 + 2.1% + 2.9% 28/02/2018 | © Kuehne + Nagel | Analyst Conference 6

  7. Slide 7: Seafreight

    Seafreight No. 1 worldwide Focus on cost control Growth of LCL and reefer 28/02/2018 | © Kuehne + Nagel | Analyst Conference 7

  8. Slide 8: Airfreight

    Airfreight No. 2 worldwide Focus on perishables and pharma Profitable growth above market 28/02/2018 | © Kuehne + Nagel | Analyst Conference 8

  9. Slide 9: Seafreight and Airfreight - volumes

    Seafreight and Airfreight - volumes 1'200 500 1'118 1'120 1'089 1'100 1'048 1'023 1'039 450 1'028 448 1'000 968 943 400 900 391 TEUs '000 381 350 Tons '000 362 800 350 328 324 700 315 300 303 600 250 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2016 2017 2017 2017 2017 28/02/2018 | © Kuehne + Nage

  10. Slide 10: Seafreight – GP/Expenses/EBIT per TEU in CHF

    Seafreight – GP/Expenses/EBIT per TEU in CHF 450 400 369 369 350 348 350 332 328 327 324 321 300 (256) (241) (239) (234) (232) (237) 250 (225) (229) (229) GP/TEU in CHF 200 Exp/TEU in CHF 150 EBIT/TEU in CHF 128 113 111 114 100 91 96 98 95 100 50 - Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2016

  11. Slide 11: Airfreight – GP/Expenses/EBIT per 100 kg in CHF

    Airfreight – GP/Expenses/EBIT per 100 kg in CHF 90 78 77 80 74 70 68 69 70 66 65 64 60 (54) (51) (53) (51) (47) (48) (46) (46) 50 (45) GP/100 kg in CHF 40 Exp/100 kg in CHF 30 25 23 23 EBIT/100 kg in CHF 19 21 21 20 19 19 20 10 - Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2016 2017 2017 2017 201

  12. Slide 12: Seafreight and Airfreight – conversion rate in %

    Seafreight and Airfreight – conversion rate in % 35.0 34.7 32.9 31.8 31.1 31.6 Seafreight 31.2 conversion 29.9 30.1 30.0 rate in % 30.0 30.7 30.5 30.5 30.2 30.0 29.8 27.6 29.2 Airfreight conversion rate in % 27.4 25.0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2016 2017 2017 2017 2017 28/02/2018

  13. Slide 13: Seafreight and Airfreight – Income Statements

    Seafreight and Airfreight – Income Statements Income statement YTD YTD Variance in CHF million Dec 2016 Dec 2017 2017/2016 Growth Forex1 Turnover 7'981 8'805 10.3% 9.9% 0.4% Gross profit 1'416 1'416 - 0.4% (0.4%) EBITDA 465 437 (6.0%) (5.4%) (0.6%) EBIT 445 414 (7.0%) (6.3%) (0.7%) Conversion rate 3

  14. Slide 14: Seafreight and Airfreight – business development

    Seafreight and Airfreight – business development  Margin pressure through rate increases not fully compensated by volume growth and process optimisation  Cost per TEU reduced by CHF 10 through efficiency gains  High quality industry solutions with KN FreshChain and LCL  Growth and profitability

  15. Slide 15: Overland

    Overland Strategic development of industry-specific solutions Leverage of top line growth driving significant profitability improvement 28/02/2018 | © Kuehne + Nagel | Analyst Conference 15

  16. Slide 16: Overland – performance of business unit

    Overland – performance of business unit Income statement YTD YTD Variance in CHF million Dec 2016 Dec 2017 2017/2016 Growth Forex1 Net turnover 2'898 3'117 7.6% 6.5% 1.1% Gross profit 895 952 6.4% 5.2% 1.2% EBITDA 70 92 31.4% 30.0% 1.4% EBIT 28 49 75.0% 75.0% - EBITDA / Net turnover margin 2.4% 3.0%

  17. Slide 17: Contract Logistics

    Contract Logistics Successful with scalable logistics solutions Acquisitions in Pharma logistics in Italy and Turkey 28/02/18 | © Kuehne + Nagel | Analyst Conference 17

  18. Slide 18: Contract Logistics – performance of business unit

    Contract Logistics – performance of business unit Income statement YTD YTD Variance in CHF million Dec 2016 Dec 2017 2017/2016 Growth Acquisition Forex1 Net turnover 4'466 4'814 7.8% 7.6% 0.4% (0.2%) Gross profit 3'275 3'619 10.5% 10.4% 0.4% (0.3%) EBITDA 260 288 10.8% 10.0% 0.4% 0.4% EBIT 147 161 9

  19. Slide 19: Income Statement

    Income Statement 2016 2016 2016 2016 YTD Dec 2017 2017 2017 2017 YTD Dec Variance CHF million Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 2017/2016 Q1 Q2 Q3 Q4 Net turnover 4'010 4'137 4'100 4'278 16'525 4'299 4'516 4'710 5'069 18'594 2'069 289 379 610 791 Gross profit 1'593 1'664 1'643 1'650 6'550 1'648 1'72

  20. Slide 20: Balance Sheet

    Balance Sheet 31 December 31 December 31 December 31 December CHF million 2016 2017 2016 2017 Assets Liabilities and equity Property, plant and equipment 1'127 1'249 Equity attributable to the equity holders 2'160 2'321 of the parent company Goodwill 758 849 Other intangibles 82 96 Non-controlling i

  21. Slide 21: Cash flow

    Cash flow CHF million 2016 2017 Variance Operational cash flow 1'062 1'148 86 Changes in working capital (2) (128) (126) Income taxes paid (212) (240) (28) Cash flow from operating activities 848 780 (68) Cash flow from investing activities (174) (245) (71) Cash flow from financing activities (670)

  22. Slide 22: Working capital development

    Working capital development Better/(worse) Dec Dec CHF million Dec 2017 vs. 2016 2017 Dec 2016 Trade receivables & Work in progress 2'966 4'017 (1'051) Trade payables & Accrued trade expenses (2'355) (3'197) 842 Net working capital 611 820 (209) KPIs: Working capital intensity 3.1% 3.4% (0.3%) DSO 4

  23. Slide 23: Return on capital employed

    Return on capital employed 75% 70% 70% 70% * 69% 70% 69% 69% 68% 68% 67% 66% 65% 64% 64% 60% Structural ROCE of 60% 70% confirmed 55% Month end (Short-term) vs. impact of 50% average fx rate acquisitions Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017

  24. Slide 24: Financial targets 2018

    Financial targets 2018 YTD Dec Targets YTD Dec Market CHF million 2017 2022 2017 2018 GROUP SEAFREIGHT Conversion rate 13.3% 16% Conversion rate 29.2% ROCE 64% 70% Volume growth 7.5% 4 - 5% Effective tax rate 22.5% ~ 22 - 23% AIRFREIGHT Working capital intensity 3.4% 3.5 - 4.5% Conversion rate 30.2%

  25. Slide 25: Shareholder value

    Shareholder value Dividend proposal 2017: Dividend per share CHF 5.75 Dividend payout ratio: 93.3% 2013 2014 2015 2016 2017 Share price in CHF 31.12. 117.10 135.30 137.80 134.60 172.50 Market capitalisation in CHF million 31.12. 14'052 16'236 16'536 16'152 20'700 Total shareholder return development

  26. Slide 26: Leading the Transformation

    Leading the Transformation Customer eTouch Excellence myKN People’s Acquisitions business 28/02/2018 | © Kuehne + Nagel | Analyst Conference 26

  27. Slide 27: Leading the Transformation – focus topics 2018

    Leading the Transformation – focus topics 2018 Cost control to ascertain leverage benefits Digitisation as game changer for new solutions and productivity improvements Investing in new opportunities connected to value chain expansion Acquisitions as an accelerator for our strategy implementation 28/

  28. Slide 28: Slide 28

  29. Slide 29: Upcoming events 2018

    Upcoming events 2018 Q1 24.04.18 Three-months 2018 results AGM 08.05.18 Annual General Meeting Div 15.05.18 Dividend payment for 2017 Q2 19.07.18 Half-year 2018 results Q3 18.10.18 Nine-months 2018 results Q4 27.02.19 Full-year 2018 results 28/02/2018 | © Kuehne + Nagel | Analyst Conference 29

  30. Slide 30: Income Statement – EBIT reconciliation

    Income Statement – EBIT reconciliation CHF million + 2.4% = CHF 22m + 2.1% = CHF 19m 918 (34) 6 903 937 (9) (7) 4 925 13 457 EBIT 2016 Net profit on Impact FX impact EBIT 2016 EBIT 2017 Impact Recourse FX impact EBIT 2017 as reported sale of onerous 2015/16 operational as reported onerous claim Allo

  31. Slide 31: Quarter over Quarter 2017/2016

    Quarter over Quarter 2017/2016 CHF million 2017 2016 2017 / 2016 Change in % 2017 / 2016 Change in mCHF Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 1. Seafreight A) Income Statement Turnover 2'095 2'167 2'284 2'259 8'805 1'972 1'960 2'043 2'006 7'981 +6.2 +10.6 +11.8 +12.

  32. Slide 32: Quarter over Quarter 2017/2016

    Quarter over Quarter 2017/2016 2017 2016 2017 / 2016 Change in % 2017 / 2016 Change in mCHF CHF million Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 3. Overland A) Income Statement Turnover 794 826 822 914 3'356 749 814 757 810 3'130 +6.0 +1.5 +8.6 +12.8 +7.2 45 12 65 104

  33. Slide 33: Quarter over Quarter 2017/2016

    Quarter over Quarter 2017/2016 2017 2016 2017 / 2016 Change in % 2017 / 2016 Change in mCHF CHF million Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 5. Kuehne + Nagel Group A) Income Statement Turnover 5'185 5'390 5'633 6'012 22'220 4'865 5'002 4'971 5'147 19'985 +6.6 +7.8

  34. Slide 34: Contact

    Contact Markus Blanka-Graff Andrea Kobi CFO Investor Relations markus.blanka@kuehne-nagel.com andrea.kobi@kuehne-nagel.com Tel: +41 (0)44 7869 644 Tel: +41 (0)44 7869 561 Disclaimer Investing in the shares of Kuehne + Nagel International AG involves risks. Prospective investors are strongly requeste

  35. Slide 35: Kuehne + Nagel International AG

    Kuehne + Nagel International AG Dorfstrasse 50 | 8834 Schindellegi | Switzerland | Telephone +41 (0)44 786 95 11 | www.kuehne-nagel.com

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