Kuehne & Nagel International Ag · SIX:KNIN
Kuehne & Nagel International — Kuehne + Nagel International — FY2007 Earnings Presentation
54 slides from Kuehne & Nagel International's earnings presentation, Mar 10, 2008
Slide 1: Kuehne + Nagel International Analyst Conference – Result 2007
Kuehne + Nagel International Analyst Conference – Result 2007 March 10, 2008 Zürich, Switzerland
Slide 2: Klaus Herms, CEO; Reinhard Lange, Deputy CEO; Gerard van Kesteren, CFO
Klaus Herms, CEO Reinhard Lange, Deputy CEO Gerard van Kesteren, CFO Analyst Conference – Result 2007 10/03/2008 p. 2
Slide 3: Agenda
Agenda • Welcome and Highlights 2007 Gerard van Kesteren • Operating Review 2007 Reinhard Lange • Financial Review 2007 Gerard van Kesteren • Outlook 2008 Klaus Herms Analyst Conference – Result 2007 10/03/2008 p. 3
Slide 4: Agenda: Welcome and Highlights 2007
Agenda • Welcome and Highlights 2007 Gerard van Kesteren • Operating Review 2007 Reinhard Lange • Financial Review 2007 Gerard van Kesteren • Outlook 2008 Klaus Herms Analyst Conference – Result 2007 10/03/2008 p. 4
Slide 5: Global Logistics Network
Global Logistics Network • Over 50’000 employees • 830 locations in more than 100 countries • Ownership of the global network • Non-asset based in Seafreight, Airfreight and Road & Rail Logistics • Contract Logistics: 10% of locations company owned out of 500 locations in 55 countries; 13% of 7 mill
Slide 6: Key events Kuehne + Nagel 2007
Key events Kuehne + Nagel 2007 Business • Strong double digits organic growth in all Business Fields • Seafreight +15% Volume • Airfreight +14% • Road & Rail Logistics +14% Invoiced Turnover • Contract Logistics +19% • Improved EBITDA margin to record high of 4.8% • Leverage effect in Seafreight & A
Slide 7: Income Statement
Income Statement Variance CHF million 2005 2006 2007 2006/2007 Invoiced turnover 14'049 18'194 20'975 15% Forwarding expenses (11'280) (12'942) (14'961) Gross profit 2'769 5'253 6'014 14% Gross profit-Margin 19.7% 28.9% 28.7% Total expenses (2'208) (4'397) (5'002) EBITDA 561 855 1'012 18% EBITDA-Mar
Slide 8: Segment Reporting by Business Unit
Segment Reporting by Business Unit Turnover Gross Profit EBITDA Volum e in CHF million % % % 2006 2007 2006 2007 2006 2007 ∆ - Seafreight 8'306 9'642 16% 1'138 1'270 12% 373 425 14% +15% - Airfreight 3'386 3'719 10% 599 698 16% 166 218 32% +14% - Road & Rail Logistics 2'474 2'821 14% 458 515 12% 37
Slide 9: EBITDA Development per Business Unit
EBITDA Development per Business Unit in CHF million 2006 2007 Variance Seafreight 373 425 52 Airfreight 166 218 52 Road & Rail Logistics 37 33 (4) Contract Logistics 188 242 54 Real Estate / Insurance Brokers 91 95 4 TOTAL Group 855 1'012 157 Analyst Conference – Result 2007 10/03/2008 p. 9
Slide 10: EBITDA per Business Unit
EBITDA per Business Unit 2006 2007 Contract Road & Rail Contract Road & Rail Logistics Logistics Logistics Logistics 22% 4% 24% 3% Others Others 11% 9% Airfreight 19% Airfreight 22% Seafreight Seafreight 42% 44% Analyst Conference – Result 2007 10/03/2008 p. 10
Slide 11: EBITDA per Business Unit
EBITDA per Business Unit 1200 1000 95 33 800 91 37 242 188 600 218 166 400 200 373 425 0 2006 2007 Seafreight Airfreight Contract Logistics Road & Rail Logistics Others Analyst Conference – Result 2007 10/03/2008 p. 11
Slide 12: Highlights 2007
Highlights 2007 CHF million 2005 2006 2007 - Gross Profit 2'769 5'253 6'014 - EBITDA 561 855 1'012 - Net earnings 315 458 531 - Cash & Cash Equivalents 1'125 600 812 Per share - EPS (basic) 2.87 3.90 4.50 - Dividend 1.10 1.50 1.90 Equity % Total assets 37.9 34.6 36.7 Operational Cash Flow 575 857 10
Slide 13: Development Share Price Kuehne + Nagel 2005 - 2007
Development Share Price Kuehne + Nagel 2005 - 2007 KUEHNE & NAGEL Namen vs. SMI, SPI and Bloomberg Europe Transportation Index 280.00 260.00 240.00 220.00 200.00 Index 180.00 160.00 140.00 120.00 100.00 80.00 30.12.2004 28.02.2005 30.04.2005 30.06.2005 30.08.2005 30.10.2005 30.12.2005 28.02.2006 30.
Slide 14: Management and organisation structure
Board of Directors Chief Executive Officer K. Herms Succeeding mid.2009 Information Sea & Air Contract Rail & Road Chief Financial Human Systems & Logistics Logistics Logistics Officer Resources Technology R. Lange D. Reich X. Urbain G. van Kesteren M. Kolbe K. D. Pietsch Regional Management Europe
Slide 15: Organisation Chart Corporate Finance 01.01.2008
Organisation Chart Corporate Finance 01.01.2008 Gerard van Kesteren CFO * Hedwig Kastelitz Secretary Financial Applications Corporate Accounting * Corporate Controlling Corporate Tax Credit Management Contract Logistics Reporting & Consolidation Road & Rail Logistics Corporate Treasury Sea & Air Log
Slide 16: Shareholders Structure Kuehne + Nagel
Shareholders Structure Kuehne + Nagel December 31, 2007 Free float 42.59% Kuehne Treasury Holding 55.75% shares 1.66% Analyst Conference – Result 2007 10/03/2008 p. 16
Slide 17: Agenda: Operating Review 2007
Agenda • Welcome and Highlights 2007 Gerard van Kesteren • Operating Review 2007 Reinhard Lange • Financial Review 2007 Gerard van Kesteren • Outlook 2008 Klaus Herms Analyst Conference – Result 2007 10/03/2008 p. 17
Slide 18: Financial Performance 2000 – 2007: Turnover and Gross Profit
Financial Performance 2000 – 2007 (in CHF million) Turnover Gross Profit 25'000 20'975 7'000 6'014 18'194 6'000 5'253 20'000 14'049 5'000 15'000 11'563 4'000 9'548 2'769 8'805 8'247 8'435 10'000 3'000 2'064 2'323 1'911 1'727 1'453 2'000 5'000 1'000 0 0 00 01 02 03 04 05 06 07 00 01 02 03 04 05 06 07
Slide 19: Financial Performance 2000 – 2007: EBITDA and Net Earnings
Financial Performance 2000 – 2007 (in CHF million) EBITDA Net Earnings 600 531 1'200 458 1'012 500 1'000 855 400 315 800 562 300 238 600 475 196 415 160 161 362 200 126 400 100 200 0 0 02 03 04 05 06 07 0 1 * 3 4 5 6 7 20 20 20 20 20 20 20 0 20 0 20 0 2 20 0 20 0 20 0 20 0 20 0 * Excl. impairment go
Slide 20: Financial Performance 2000 – 2007
Financial Performance 2000 – 2007 (in CHF million) 1'200 1'012 EBITDA 1'000 855 800 562 600 475 415 362 531 Net Earnings 400 458 315 200 238 196 161 * 0 02 03 04 05 06 07 20 20 20 20 20 20 * Excl. impairment goodwill USCO Analyst Conference – Result 2007 10/03/2008 p. 20
Slide 21: Financial Performance 2007: EBITDA
Financial Performance 2007 (in CHF million) EBITDA 425 450 400 350 300 242 218 250 200 150 78 100 33 17 50 - ht cs ht te a il ce ig ti ig ta &R n fre gis fre Es u ra Se a t Lo Air Re al Ro ad Ins nt ra c Co Analyst Conference – Result 2007 10/03/2008 p. 21
Slide 22: Performance Business Unit Seafreight 2005 - 2007
Performance Business Unit Seafreight 2005 - 2007 2006/2007 EBIT/ 2005 2006 2007 TEU's CHF million % '000 TEU Invoiced turnover 7'503 8'306 9'642 16% 2005 1'910 127 Gross profit 944 1'138 1'270 12% 2006 2'275 152 EBITDA 264 373 425 14% 2007 2'618 148 EBIT 243 345 386 12% EBIT / Revenue margin 3.2% 4.
Slide 23: Seafreight Performance 2000 - 2007
Seafreight Perfomance 2000 - 2007 2'618 2'275 1'910 1'600 1'261 Volume Development 140 1'009 128 Kuehne + Nagel 117 in `000 TEU 850 800 99 89 Volume Development 79 71 Seafreight worldwide 68 in Mio. TEU Market Share 1,2 1,2 1,3 1,4 1,6 1,6 1,8 1,9 Kuehne + Nagel in % 00 01 02 03 04 05 06 07 20 20 20
Slide 24: Market Position Seafreight
Market Position Seafreight Preferred carriers: Revenue in CHF million (2006) Maersk Line MSC Hapag Lloyd 9'000 CMA 8'000 7'000 6'000 5'000 4'000 3'000 2'000 1'000 0 UPS SCS DHL Nippon Express Kuehne+Nagel Panalpina Schenker Expeditors UTi Worldwide Sinotrans Agility 2005 2006 Analyst Conference – Re
Slide 25: Performance Business Unit Airfreight 2005 - 2007
Performance Business Unit Airfreight 2005 - 2007 2006/2007 EBIT/ 2005 2006 2007 TONs CHF million % '000 kg Invoiced turnover 3'011 3'386 3'719 10% 2005 654 0.19 Gross profit 527 599 698 16% 2006 720 0.21 EBITDA 139 166 218 32% 2007 818 0.24 EBIT 124 151 196 29% EBIT / Revenue margin 4.1% 4.5% 5.3% E
Slide 26: Airfreight Performance 2000 - 2007
Airfreight Performance 2000 - 2007 818 720 654 600 500 495 Volume Development 450 Kuehne + Nagel 360 in `000 Tons Volume Development 17,7 18,5 19,3 Airfreight worldwide 15,2 14,2 14,8 15,3 17,0 in Mio. Tons Market share 2,4 3,2 3,3 3,3 3,5 3,7 3,9 4,2 Kuehne + Nagel in % 00 01 02 03 04 05 06 07 20 2
Slide 27: Market Position Airfreight
Market Position Airfreight Preferred carriers: Revenue in CHF million (2006) Lufthansa Air France / KLM Cargolux 9'000 Emirates 8'000 7'000 6'000 5'000 4'000 3'000 2'000 1'000 0 UPS SCS DHL EGL Nippon Express Kuehne+Nagel KWE Panalpina Schenker Expeditors Sinotrans 2005 2006 Analyst Conference – Res
Slide 28: Performance Business Unit Road & Rail Logistics 2005 - 2007
Performance Business Unit Road & Rail Logistics 2005 - 2007 2006/2007 2005 2006 2007 CHF million % Invoiced turnover 2'095 2'474 2'821 14% Gross profit 400 458 515 12% EBITDA 29 37 33 (11% ) EBIT (14) (15) (55) - EBITDA / Revenue margin 1.4% 1.5% 1.2% • Volume / Revenue growth of 14% (0.5% acquisiti
Slide 29: Impairment Road & Rail Logistics 2007
Impairment Road & Rail Logistics 2007 Anticipated level of profitability not achieved in some specific acquisition targets (mainly Greece / Germany) leading to an impairment of the carrying amount of goodwill CHF 31 Mio. and the respective intangible assets of CHF 26 Mio. Analyst Conference – Result
Slide 30: Market Position Rail & Road Logistics
Market Position Rail & Road Logistics Revenue in CHF million (2006) 9'000 8'000 7'000 6'000 5'000 4'000 3'000 2'000 1'000 0 DHL N. Dentressangle Kuehne+Nagel Schenker Dachser Geodis Thiel Logistics DSV Gefco ABX 2005 2006 Analyst Conference – Result 2007 10/03/2008 p. 30
Slide 31: Performance Business Unit Contract Logistics 2005 - 2007
Performance Business Unit Contract Logistics 2005 - 2007 2006/2007 2005 2006 2007 CHF million % Invoiced turnover 1'333 3'916 4'666 19% Gross profit 865 3'019 3'490 16% EBITDA 70 188 242 28% EBIT 33 64 101 57% EBIT / Revenue margin 2.5% 1.6% 2.2% EBIT / GP Margin 3.9% 2.1% 2.9% • Strong organic volu
Slide 32: Market Position Contract Logistics
Market Position Contract Logistics Revenue in CHF million (2006) 14'000 12'000 10'000 8'000 6'000 4'000 2'000 0 UPS SCS DHL Kuehne+Nagel Fiege Schenker Ceva Logistics Wincanton UTi Worldwide Agility Ryder 2005 2006 Analyst Conference – Result 2007 10/03/2008 p. 32
Slide 33: Divestment Real Estate Project
Divestment Real Estate Project Issue Sale of 22 warehouse locations partly acquired with ACR/Häring in 5 European countries and leased back at an average 5 years period, leaving approx 50 locations i.e. 10% in Kuehne + Nagel ownership (13% out of 7million sqm). Objective Optimize Real Estate portfol
Slide 34: Agenda: Financial Review 2007
Agenda • Welcome and Highlights 2007 Gerard van Kesteren • Operating Review 2007 Reinhard Lange • Financial Review 2007 Gerard van Kesteren • Outlook 2008 Klaus Herms Analyst Conference – Result 2007 10/03/2008 p. 34
Slide 35: Basis for Consolidation 2007
Basis for Consolidation 2007 • As per International Reporting Standards (IFRS) • Income statement and cash flow at average rates • Balance sheet at year-end rates • Impairment goodwill & intangibles CHF 57 Mio • Only organic growth in 2007 Analyst Conference – Result 2007 10/03/2008 p. 35
Slide 36: Currency Development CHF
Currency Development CHF 2005 2006 2007 2008 Balance Sheet Euro 1.56 1.61 1.67 US Dollar 1.32 1.22 1.16 British Pound 2.26 2.40 2.29 Income Statement Euro 1.55 1.58 1.64 1.63 US Dollar 1.24 1.26 1.20 1.11 British Pound 2.26 2.31 2.40 2.20 Analyst Conference – Result 2007 10/03/2008 p. 36
Slide 37: Currency Development CHF Income Statement
Currency Development CHF Income Statement 2.4 2.4 2.31 2.27 2.26 2.2 2.2 British Pound 2.2 2.0 1.8 1.63 Euro 1.6 1.64 1.58 1.55 1.55 1.52 1.4 1.34 1.26 1.2 1.24 1.24 1.20 1.11 US Dollar 1.0 2003 2004 2005 2006 2007 2008 Analyst Conference – Result 2007 10/03/2008 p. 37
Slide 38: Main Changes in Consolidation Scope 2007
Main Changes in Consolidation Scope 2007 New Companies • Kuehne + Nagel Ltd., Trinidad & Tobago • Kuehne + Nagel L.L.C., Qatar Acquisitions • 50% JV Orient Transport Company Ltd., Saudi-Arabia • 30% minority Nakufreight Ltd., Cyprus • 40% minority PACT Benelux B.V., Netherlands • G.L. Kayser / Corde
Slide 39: Income Statement
Income Statement CHF million 2005 2006 2007 ∆ Invoiced turnover 14'049 18'194 20'975 15% Gross profit 2'769 5'253 6'014 14% EBITDA 561 855 1'012 18% EBIT * 429 601 686 14% Net earnings 315 458 531 16% % Invoiced turnover 2.2% 2.5% 2.5% * incl. amort. intangibles / goodwill 51 103 146 Analyst Confere
Slide 40: Segment Reporting by Business Unit
Segment Reporting by Business Unit Turnover Gross Profit EBITDA Volum e in CHF million % % % 2006 2007 2006 2007 2006 2007 ∆ - Seafreight 8'306 9'642 16% 1'138 1'270 12% 373 425 14% +15% - Airfreight 3'386 3'719 10% 599 698 16% 166 218 32% +14% - Road & Rail Logistics 2'474 2'821 14% 458 515 12% 37
Slide 41: Segment Reporting by Region
Segment Reporting by Region Turnover Gross Profit EBITDA % % % in CHF million 2006 2007 2006 2007 2006 2007 - Europe 12'092 14'128 17% 3'924 4'532 15% 529 633 20% - Americas 3'601 3'958 10% 824 885 7% 154 170 10% - Asia Pacific 1'541 1'767 15% 386 455 18% 155 180 16% - Middle East / Central Asia / A
Slide 42: Amortisation & Impairment of Intangibles & Goodwill
Amortisation & Impairment of Intangibles & Goodwill (including software) Actual Actual of which Estimate in CHF Mio. 2006 2007 Impairment 2008 Seafreight 10 16 - 19 Airfreight 9 8 - 14 Road & Rail Logistics 40 74 55 19 Contract Logistics 40 43 3 49 Real Estate 4 5 - 4 Insurance Brokers - 1 - - TOTAL
Slide 43: Reconciliation (CHF Mio.)
Reconciliation (CHF Mio.) Organic 2006 Forex Acq. 2007 Growth Invoiced turnover 18'194 404 80 2'297 20'975 Gross profit 5'253 142 13 606 6'014 EBITDA 855 15 1 140 1'012 EBIT 601 5 (1) 81 686 EBT 601 700 Net earnings 459 534 Staff 46'290 - 1'359 3'426 51'075 Analyst Conference – Result 2007 10/03/200
Slide 44: Development Working Capital Kuehne + Nagel
Development Working Capital Kuehne + Nagel CHF Mio Dec 2005 Dec 2006 Dec 2007 Trade receivables 1'713 2'228 2'606 Work in progress 271 283 322 Subtotal 1'984 2'511 2'928 Trade payables (830) (1'111) (1'329) Accrued trade expenses (626) (853) (980) Net Working Capital 528 547 619 Invoiced turnover 14
Slide 45: Capital Expenditure in fixed assets
Capital Expenditure in fixed assets CHF Mio 2005 2006 2007 - Europe 163 189 150 - Americas 14 38 28 - Asia Pacific 7 15 33 - Middle East/Central Asia and Africa 5 5 20 Total fixed assets 189 246 231 Sea & Air Logistics 28 18 37 Road & Rail Logistics 23 24 20 Contract Logistics 38 92 115 Real Estate
Slide 46: Return on Capital Employed
Return on Capital Employed CHF Mio Capital ROCE in % EBIT Em ployed * 2006 2007 2006 2007 2006 2007 - Seafreight 345 386 135 125 >100% >100% - Airfreight 151 196 157 129 96% >100% - Road & Rail (15) (55) (24) 19 - - - Contract Logistics 64 101 597 565 11% 18% - Other 56 58 866 940 6% 6% TOTAL 601 68
Slide 47: Corporation Tax
Corporation Tax CHF Mio 2005 2006 2007 - Earnings before Tax 445 601 700 - Tax charge 127 142 167 - Effective Tax Rate 28% 24% 24% Analyst Conference – Result 2007 10/03/2008 p. 47
Slide 48: Financial Targets 2008
Financial Targets 2008 • Continue to a pay-out ratio in excess of 40% as dividend • Net Working Capital at approx 3.5% of Invoiced turnover • Capex capped at Depreciation / Amortisation Intangibles current year level i.e. app at CHF 290 mio • Tax rate max. 24% Analyst Conference – Result 2007 10/03/
Slide 49: Agenda: Outlook 2008
Agenda • Welcome and Highlights 2007 Gerard van Kesteren • Operating Review 2007 Reinhard Lange • Financial Review 2007 Gerard van Kesteren • Outlook 2008 Klaus Herms Analyst Conference – Result 2007 10/03/2008 p. 49
Slide 50: Update on Antitrust Investigation
Update on Antitrust Investigation • After October 10, 2007, no further contact to WEKO / competition authorities • Full co-operation announced • Internal investigation ongoing • Dedicated Compliance Officer at Corporate Headoffice • No provision (see note 43 of Annual Report) in 2007 Analyst Confere
Slide 51: Outlook 2008
Outlook 2008 General Strong start of the year, however anticipated impact of economic slowdown in second half of 2008 difficult to quantify. Volumes Market-Growth KN Margin 2007 2008 - Seafreight 9% 8% - Airfreight 4% 4% above 2007 level market - Contract Logistics 8% 6% - Road & Rail Logistics 3% 3
Slide 52: Corporate Timetable 2008
Corporate Timetable 2008 a) Investors Day 2008 08.05.2008 Investors Day in Hamburg b) Company Timetable 2008 10.03.2008 Press Conference / Analyst Conference result 2007 21.04.2008* Q1 2008 result 30.04.2008 Annual General Meeting 05.05.2008 Dividend payout 21.07.2008* Q2 2008 result 20.10.2008* Q3
Slide 53: Disclaimer
Disclaimer Investing in the shares of Kuehne + Nagel International Ltd. involves risks. Prospective investors are strongly requested to consult their investment advisors and tax advisors prior to investing in shares of Kuehne + Nagel International Ltd. This document contains forward-looking statemen
Slide 54: Thank you for your attention.
Thank you for your attention.
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