Kuehne & Nagel International Ag · SIX:KNIN

Kuehne & Nagel International — Kuehne + Nagel International — H1 2019 Earnings Presentation

29 slides from Kuehne & Nagel International's earnings presentation, Jul 23, 2019

  1. Slide 1: Analyst conference – Half-Year 2019 results

    Analyst conference – Half-Year 2019 results Kuehne + Nagel International AG 23 July 2019 (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 – high level result in a tough environment

    Kuehne + Nagel – high level result in a tough environment Group earnings at CHF 384 million for the first half-year 2019 Strong EBIT in Seafreight of CHF 235 million, CHF 25 million above first half-year 2018 Stable EBIT in Airfreight of CHF 174 million, CHF 8 million below the record year 2018 Net

  4. Slide 4: Overview Group performance first half-year 2019

    Overview Group performance first half-year 2019 Gross Profit Net Turnover 10,600 4,015 + CHF 209 m 10,066 + CHF 534 m 3,806 + 5.3% + 5.5% 2018 2019 2018 2019 EBIT Earnings per Share 501 511 + CHF 10 m 3.25 3.18 CHF (0.07) + 2.0% (2.2%) 2018 2019 2018 2019 23.07.2019 | © Kuehne + Nagel | Analyst Conf

  5. Slide 5: Seafreight Airfreight

    Seafreight Airfreight No. 1 worldwide No. 2 worldwide Selective growth strategy, focus on customer Contracting markets service and effective cost control and low automotive volumes leads to higher EBIT/TEU Success with solutions for the pharma/healthcare industry and perishables 23.07.2019 | © Kue

  6. Slide 6: Seafreight and Airfreight – volume development

    Seafreight and Airfreight – volume development 1,300 700 1,246 1,210 1,230 650 1,200 1,171 1,146 1,118 1,120 600 1,100 1,089 1,079 550 1,000 500 TEUs '000 Tons '000 450 900 448 441 439 441 422 409 400 404 800 381 391 350 700 300 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2017 2017 2018 2018 2018 2018 2019 2019

  7. Slide 7: Seafreight – improved yield and active cost management

    Seafreight – improved yield and active cost management 400 350 327 331 333 321 324 321 311 311 313 300 (241) (236) 250 (225) (229) (229) (232) (217) (219) (222) 200 GP/TEU in CHF Exp/TEU in CHF 150 EBIT/TEU in CHF 96 98 95 99 100 90 94 92 97 81 50 - Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2017 2017 2018 201

  8. Slide 8: Airfreight – yield improvement partly through Quick

    Airfreight – yield improvement partly through Quick 90 84 80 80 77 excl. Quick 69 70 70 70 66 67 65 64 (60) (61) 60 (57) excl. Quick (50) (51) (48) 50 (46) (46) (45) (46) GP/100 kg in CHF Exp/100 kg in CHF 40 EBIT/100 kg in CHF 30 20 23 20 20 23 19 19 19 19 20 20 excl. Quick 10 - Q2 Q3 Q4 Q1 Q2 Q3 Q

  9. Slide 9: Overland

    Overland Strong performance of European network business Launch of digital platform in Asia 23.07.2019 | © Kuehne + Nagel | Analyst Conference 9

  10. Slide 10: Overland – outstanding performance

    Overland – outstanding performance Income statement HY1 HY1 Variance in CHF million 2018 2019 2019/2018 Growth Forex1 Net turnover 1,762 1,820 3.3% 5.6% (2.3%) Gross profit 550 577 4.9% 7.8% (2.9%) EBITDA2 64 72 12.5% 14.1% (1.6%) EBIT2 43 45 4.7% 7.0% (2.3%) EBITDA / Net turnover margin 3.6% 4.0% E

  11. Slide 11: Contract Logistics

    Contract Logistics Focus on restructuring of contract portfolio and cost management Rollout of new WMS-solution and warehousing technology ongoing 23.07.2019 | © Kuehne + Nagel | Analyst Conference 11

  12. Slide 12: Contract Logistics – restructuring the business

    Contract Logistics – restructuring the business Income statement YTD HY1 YTD HY1 Variance in CHF million 2018 2019 2019/2018 Growth Acquisition Forex1 Net turnover 2,569 2,681 4.4% 5.7% 1.7% (3.0%) Gross profit 1,935 1,988 2.7% 5.2% 0.7% (3.2%) EBITDA 130 349 168.5% 172.4% 2.3% (6.2%) EBIT 66 57 (13

  13. Slide 13: Income Statement

    Income Statement 2018 2018 2018 2019 2019 2019 Variance Variance in % CHF million Q1 Q2 YTD Q1 Q2 YTD 2019/2018 Q1 Q2 2019/2018 Growth Acquisition Forex 1 Net turnover 4,862 5,204 10,066 5,237 5,363 10,600 534 375 159 5.3% 6.2% 1.8% (2.7%) Gross profit 1,843 1,963 3,806 1,978 2,037 4,015 209 135 74

  14. Slide 14: eTouch revisited

    eTouch revisited Addressing some common questions  eTouch is not a platform or customer portal  eTouch is not a specific product or service to be marketed to our customers  eTouch is the banner under which technology-based operational efficiency gains are targeted  eTouch is a pillar of our tech

  15. Slide 15: eTouch revisited

    eTouch revisited Addressing some common questions  Projecting accelerating eTouch returns into 2021-22  Gains likely biased toward Airfreight vs. Seafreight  Ongoing gains targeted in both businesses beyond 2022  To date, no shipments qualify as “eTouch”* *Shipments with a conversion ratio of 60

  16. Slide 16: Balance Sheet

    Balance Sheet December 31, June 30, December 31, June 30, CHF million 2018 2019 2018 2019 Assets Liabilities and equity Equity attributable to the equity holders 2,318 1,880 Property, plant and equipment 1,226 1,231 of the parent company Right-of-use assets - 1,737 Non-controlling interests 6 45 Goo

  17. Slide 17: Impact IFRS 16 effective 1.1.2019

    Impact IFRS 16 effective 1.1.2019 December 31, June 30, HY1 2019 CHF million CHF million 2018 2019 impact Income Statement - Balance Sheet impact YTD June 2019 Right-of-use assets* - 1,737 Selling, general and admin expenses (242) Deferred tax assets 175 180 EBITDA +242 Lease liabilities 4 1,745 Dep

  18. Slide 18: Cash and cash equivalents

    Cash and cash equivalents YTD HY1 YTD HY1 CHF million Variance 2018 2019 Cash and cash equivalents January 1, net 710 488 (222) Operational cash flow 587 872 285 Changes in working capital (246) (89) 157 Main variances 2019 vs. 2018 Income taxes paid (134) (114) 20  Lower cash opening balance CHF (

  19. Slide 19: Free Cash Flow development (YTD in CHF million)

    Free Cash Flow development (YTD in CHF million) 700 635 Like-for-like comparison: 500 2018 2019 excl. IFRS 16 416 475 364  Operational CF CHF 587m CHF 627m 2017 300  CF from op. act. CHF 207m CHF 424m 2018 180 255  CF from inv. act. CHF (96)m CHF (108)m 140 2019  CF from fin. act. CHF (704)m CHF

  20. Slide 20: Working Capital

    Working Capital Dec 31, June 30, Better/(worse) CHF million 2018 2019 2019 vs. 2018 Trade receivables/Contract assets/Work in progress 4,238 4,127 111 Trade payables/Contract liabilities/Accrued trade expenses (3,160) (3,094) (66) Net working capital 1,078 1,033 45 KPIs: Working capital intensity 4.

  21. Slide 21: Return on capital employed (EBIT)

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

  22. Slide 22: Financial targets

    Financial targets HY1 Targets KN Market CHF million 2019 2022 2019 2019 GROUP SEAFREIGHT Conversion rate 12.7% 16% Volume growth > 4% ~2% ROCE (excl. acquisitions) 61% 70% better AIRFREIGHT than Effective tax rate 23 - 24% approx. 24% Volume growth -4 to -5% market Working capital intensity 4.0% 3.5

  23. Slide 23: Slide 23

  24. Slide 24: Upcoming events 2019-2020

    Upcoming events 2019-2020 Q3 08.-22.10.2019 Closed period 22.10.2019 Nine-months 2019 results 02.01.-27.02.2020 Closed period Q4 27.02.2020 Full-year 2019 results 08.-27.04.2020 Closed period Q1 27.04.2020 Three-months 2020 results AGM 05.05.2020 Annual General Meeting 07.-21.07.2020 Closed period Q

  25. Slide 25: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 2019* 2019 2018 Change in % Change in mCHF CHF million YTD Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL 1. Seafreight A) Income Statement Turnover 4,890 2,437 2,453 4,890 2,170 2,166 4,336 +12.3 +13.3 +12.8 267 287 554 Net Turnover 3,739 1,852 1,887 3,739 1,635 1,73

  26. Slide 26: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 2019* 2019 2018 Change in % Change in mCHF CHF million YTD Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL 3. Overland A) Income Statement Turnover 2,077 1,037 1,040 2,077 936 1,104 2,040 +10.8 (5.8) +1.8 101 (64) 37 Net Turnover 1,820 901 919 1,820 850 912 1,762 +6.0

  27. Slide 27: Quarter over Quarter 2019/2018

    Quarter over Quarter 2019/2018 CHF million 2019* 2019 2018 Change in % Change in mCHF YTD Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL Q1 Q2 TOTAL 5. Kuehne + Nagel Group A) Income Statement Turnover 12,727 6,323 6,404 12,727 5,795 6,143 11,938 +9.1 +4.2 +6.6 528 261 789 Customs duties and taxes (2,127) (1,0

  28. Slide 28: Kuehne + Nagel International AG

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

  29. Slide 29: 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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