Kuehne & Nagel International Ag · SIX:KNIN

Kuehne & Nagel International — Kuehne + Nagel International — FY2019 Earnings Presentation

33 slides from Kuehne & Nagel International's earnings presentation, Feb 27, 2020

  1. Slide 1: Analyst conference – Full-year 2019 results

    Analyst conference – Full-year 2019 results Kuehne + Nagel International AG 27 February 2020 (CET 14.00) | Schindellegi, 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: Kuehne + Nagel once again improves results in 2019

    Kuehne + Nagel once again improves results in 2019 Group earnings for the year at CHF 800 million, FCF improves further significantly to CHF 1,138 million Strong EBIT in Seafreight of CHF 456 million, CHF 38 million above full-year 2018 Resilient EBIT in Airfreight of CHF 329 million, despite reduce

  4. Slide 4: Overview Group performance full-year 2019

    Overview Group performance full-year 2019 Q1 Uncertain start Q2 – successful Q2 Growing momentum GP GP++12% 7% GP + 4% Promising market GP + 12% Signs of trade Automotive conflicts industry with dynamics EBIT EBIT+ EBIT ++13% 13% 3% Strong performance first signs of crisis EBIT + 2% Success with Man

  5. Slide 5: Seafreight Airfreight

    Seafreight Airfreight No. 1 worldwide No. 2 worldwide Focus on customer service Lower automotive and high-tech volumes Significantly improved conversion rate Negative one-offs of CHF 14 million in 2019 27.02.2020 | © Kuehne + Nagel | Analyst Conference 5

  6. Slide 6: Seafreight and Airfreight – volume development

    Seafreight and Airfreight – volume development 700 1,400 650 1,300 1,279 1,230 1,246 600 1,210 1,190 1,200 1,171 1,146 550 1,120 1,100 1,079 500 TEUs '000 1,000 Tons '000 450 448 441 439 441 900 422 424 400 409 404 406 800 350 700 300 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2018 2018 2018 2019 2019 201

  7. Slide 7: Seafreight – increased unit profit

    Seafreight – increased unit profit 400 350 331 333 324 321 311 311 313 306 308 300 (241) (236) 250 (229) (232) (225) (217) (219) (222) (211) 200 GP/TEU in CHF 150 Exp/TEU in CHF EBIT/TEU in CHF 95 90 94 92 97 100 81 99 95 83 50 - Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2018 2018 2018 2018 2019 2019 2019 201

  8. Slide 8: Airfreight – unit margins and profits resilient

    Airfreight – unit margins and profits resilient 90 84 80 81 80 75 69 70 70 70 67 64 (60) (61) (59) 60 (56)* (50) (51) (48) 50 (45) (46) GP/100 kg in CHF Exp/100 kg in CHF 40 EBIT/100 kg in CHF * Excluding impairment 30 * of intangibles 23 20 23 22 19 19 20 19 19* 20 10 - Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2

  9. Slide 9: Overland

    Overland Strong performance of European network business North America contributed with volumes from large customers 27.02.2020 | © Kuehne + Nagel | Analyst Conference 9

  10. Slide 10: Overland – strong y-o-y performance continued

    Overland – strong y-o-y performance continued Income statement YTD YTD Variance 1 in CHF million 2018 2019 2019/2018 Growth1 Acquisition1 Forex1 Net turnover 3,526 3,586 1.7% 3.6% 0.7% (2.6%) Gross profit 1,088 1,121 3.0% 5.4% 0.6% (3.0%) EBITDA 118 136 15.3% 17.0% 0.8% (2.5%) EBIT 76 78 2.6% 5.4% (

  11. Slide 11: Acquisition of Rotra Group, Europe 2020

    Acquisition of Rotra Group, Europe 2020  Based in Belgium and the Netherlands  Europe-wide overland transportation  Groupage business and cross dock facilities  Revenue of approx. CHF 110 million  Approx. 800 employees  Acquisition of the Overland business effective January 7, 2020 27.02.2020

  12. Slide 12: Contract Logistics

    Contract Logistics Focus on restructuring and cost management Continuous review of real estate portfolio 27.02.2020 | © Kuehne + Nagel | Analyst Conference 12

  13. Slide 13: Contract Logistics – restructuring yielded results

    Contract Logistics – restructuring yielded results Income statement YTD YTD Variance in CHF million 2018 2019 2019/2018 2 Growth2 Acquisition2 Forex2 Net turnover 5,249 5,398 2.8% 4.3% 1.5% (3.0%) Gross profit 3,937 4,004 1.7% 4.1% 0.7% (3.1%) EBITDA1 270 814 201.5% 207.0% 2.6% (8.1%) EBIT 1 138 198

  14. Slide 14: Contract Logistics – operational performance improving

    Contract Logistics – operational performance improving (excl. one-offs and IFRS 16) Income statement YTD YTD Variance in CHF million 2018 2019 2019/2018 2 Growth2 Acquisition2 Forex1 Net turnover 5,249 5,398 2.8% 4.3% 1.5% (3.0%) Gross profit 3,937 4,004 1.7% 4.1% 0.7% (3.1%) EBITDA 239 258 7.9% 14.

  15. Slide 15: Income Statement

    Income Statement 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 Variance Variance in % CHF million Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD 2019/2018 Q1 Q2 Q3 Q4 2019/2018 Growth Acquisition Forex 1 Net turnover 4,862 5,204 5,295 5,413 20,774 5,237 5,363 5,238 5,256 21,094 320 375 159 (57) (157) 1.5% 2.5%

  16. Slide 16: Income Statement – EBIT reconciliation

    Income Statement – EBIT reconciliation CHF million + 7.8% = CHF 74m + 7.5% = CHF 74m 987 (31) 1,061 (79) 27 1,024 (6) 950 17 9 (11) 432 EBIT 2018 Net profit on Sale of EBIT 2018 EBIT 2019 Net profit on Write off of Restruct. IFRS 16 FX impact EBIT 2019 as reported sale of Eichenberg operational as r

  17. Slide 17: eTouch update

    eTouch update No change to anticipated timeline  Projecting accelerating eTouch returns into 2021-2022  Modest financial gains thus far (minimal in 2019) given Seafreight volatile market conditions Airfreight  Ongoing gains targeted in Sea and Airfreight beyond 2022  eTouch ambitions imply low-t

  18. Slide 18: eTouch traction in Airfreight as expected

    eTouch traction in Airfreight as expected Ten core areas of focus for Airfreight workflow automation Productivity gains approx. 900k man-hours equivalent to CHF 20 million (annualised) Workflow area Of total process in % Man-hours (est.) Document filing around 50% 2 to 6.5 million Customer booking a

  19. Slide 19: Balance Sheet

    Balance Sheet December 31, December 31, December 31, December 31, CHF million 2018 2019 2018 2019 Assets Liabilities and equity Equity attributable to the equity holders 2,318 2,316 Property, plant and equipment 1,226 1,089 of the parent company Right-of-use assets - 1,899 Non-controlling interests

  20. Slide 20: Cash Free cash flow

    Cash Free cash flow YTD Dec YTD Dec CHF million Variance 1,138 2018 2019 Cash and cash equivalents January 1, net 710 488 (222) Operational cash flow 1,156 1,746 590 2017 Changes in working capital (260) 226 486 2018 617 Income taxes paid (217) (252) (35) 2019 Cash flow from operating activities 679

  21. Slide 21: Working Capital

    Working Capital Dec 31, Dec 31, Better/(worse) CHF million 2018 2019 2019 vs. 2018 Trade receivables/Contract assets/Work in progress 4,238 3,900 338 Trade payables/Contract liabilities/Accrued trade expenses (3,160) (3,080) (80) Net working capital 1,078 820 258 KPIs: Working capital intensity 4.1%

  22. Slide 22: Return on capital employed (EBIT)

    Return on capital employed (EBIT) ROCE ROCE excl. acquisitions 80%  Mix effect: 75% Stronger growth in Contract 70% 67% Logistics leads to higher asset 66% 66% 65% allocation in proportion to Sea 65% 63% 61% and Airfreight 60% 60% 64% 58% 60% 62% 60%  Acquisition effect: 55% 57% Acquisition impact

  23. Slide 23: Shareholder return

    Shareholder return Dividend proposal 2019: Dividend per share CHF 4.00 Dividend payout ratio: 60.0% 2015 2016 2017 2018 2019 Share price in CHF on 31.12. 137.80 134.60 172.50 126.35 163.20 Market capitalisation in CHF million on 31.12. 16,536 16,152 20,700 15,162 19,584 Dividend per share paid in CH

  24. Slide 24: Financial targets

    Financial targets YTD Targets KN Market Market CHF million 2019 2022 2019 2019 2020 GROUP SEAFREIGHT Conversion rate 13.3% 16% Volume growth 3.6% 1 to 2% 1 to 3% ROCE (excl. acquisitions) 67% 70% AIRFREIGHT Effective tax rate 23 - 24% ~ 24% Volume growth (5.7)% (4) to (5)% 0 to 1% Working capital in

  25. Slide 25: Outlook 2020

    Outlook 2020 Market Kuehne + Nagel  Asian trades down due to CoVID-19  Adapting transport capacity & cost structure  Growing demand for Perishables  Completing Contract Logistics restructuring  Transpac expected back to growth in H2  Accelerating eTouch deployment  European export expected to

  26. Slide 26: Slide 26

  27. Slide 27: Upcoming events 2020

    Upcoming events 2020 08.-27.04.2020 Close period Q1 27.04.2020 Three-months 2020 results AGM 05.05.2020 Annual General Meeting 07.-21.07.2020 Close period Q2 21.07.2020 Half-year 2020 results Q3 06.-20.10.2020 Close period 20.10.2020 Nine-months 2020 results 27.02.2020 | © Kuehne + Nagel | Analyst C

  28. Slide 28: Impact IFRS 16 effective 1.1.2019

    Impact IFRS 16 effective 1.1.2019 December 31, December 31, YTD Q4 2019 CHF million CHF million 2018 2019 impact Income Statement - Balance Sheet impact YTD Dec 2019 Right-of-use assets1 - 1,899 Selling, general and admin expenses (508) Deferred tax assets 175 219 EBITDA +508 Lease liabilities curre

  29. Slide 29: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 2019* 2019 2018 Change in % Change in mCHF CHF million YTD 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 9,751 2,437 2,453 2,480 2,381 9,751 2,170 2,166 2,532 2,498 9,366 +12.3 +13.3 (2.1) (4.7) +4.1

  30. Slide 30: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 2019* 2019 2018 Change in % Change in mCHF CHF million YTD 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 4,102 1,037 1,040 996 1,029 4,102 936 1,104 938 1,031 4,009 +10.8 (5.8) +6.2 (0.2) +2.3 101 (64)

  31. Slide 31: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 2019* 2019 2018 Change in % Change in mCHF CHF million YTD 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 25,295 6,323 6,404 6,271 6,297 25,295 5,795 6,143 6,349 6,538 24,825 +9.1 +4.2 (1.2)

  32. Slide 32: Kuehne + Nagel International AG

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

  33. Slide 33: Contact

    Contact Markus Blanka-Graff Christopher Combé Andrea Kobi CFO Head of Investor Relations Investor Relations markus.blanka@kuehne-nagel.com christopher.combe@kuehne-nagel.com andrea.kobi@kuehne-nagel.com Tel: +41 (0)44 7869 644 Tel: +41 (0)44 7869 693 Tel: +41 (0)44 7869 561 Disclaimer Investing in t

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