Kuehne + Nagel is to buy RH Freight, the Nottingham-based groupage operator as part of its strategy to expand its European overland network.
K+N has also reported a 13.4 per cent rise in operating profit (EBITDA) to CHF 1bn for 2010 on sales up 16.4 per cent CHF 20.2bn.
RH Freight handles 425,000 shipments per year and operates to 32 European destinations daily. Besides its core activities, RH Freight is also active in sea- and airfreight as well as contract logistics, with 30,000 sqm of handling space under management.
K+N is acquiring the shares of RH’s parent company, Rennies Investment Ltd, RH employs 630 staff across 17 locations in the United Kingdom including hubs at Nottingham and South East London, along with two sites in Finland.
Dirk Reich, Executive Kuehne + Nagel’s vice president for Road & Rail Logistics, said: “RH Freight fits ideally Kuehne + Nagel’s strategy to expand its European overland network and to offer its customers high quality overland products.”
Ian Baxter, managing director of the RH Group, said: “We need to offer customers a truly global one-stop solution. Combining strengths and international capabilities with Kuehne + Nagel will be of great advantage to our customers and generate a win-win situation for both companies and their employees.”
K+N’s annual results show growth in its contract logistics business, although it said pressure on margins remained.
“Kuehne + Nagel gained a number of new contracts worldwide, resulting in a 5 per cent (currency adjusted) increase in net invoiced turnover. Idle space, caused by the 2009 crisis, was reduced significantly. However, negative exchange-rate effects and still insufficient result development in North America impacted the operational result. EBITDA margin remained almost stable at 4.4 per cent (previous year: 4.6 per cent).”
In the European overland transport market, the strong economic upswing led to a marked increase in freight volumes, it said. At the same time, service providers had to cope with fierce competition and increased price pressure. K+N saw a 16 per cent rise in turnover. “However, investments in additional locations in France adversely affected the operational result of this business unit, which was 17.3 per cent lower than in the previous year. EBITDA margin decreased from 2.1 per cent (2009) to 1.5 per cent, presenting a challenge for the time to come.”
In seafreight, the group saw a 16 per cent rise in container volumes gaiing market share in many trade lanes. “Increased productivity and strict cost discipline resulted in a 17.3 per cent rise of the operational result. EBITDA to gross profit margin improved to 36.0 per cent (previous year: 31.3 per cent),” it said.
K+N’s air cargo business achieved record levels of cargo volumes handled – 25 per cent higher at almost one million tons. “The operational result increased by 47.2 per cent, EBITDA to gross profit margin improved to 31.2 per cent (previous year: 25.0 per cent).”
Looking ahead, group chief executive Reinhard Lange said: “In 2011 again, our goal is to achieve profitable growth above market average in sea- and airfreight. In contract logistics we also target growth above market average while keeping margins stable. A combination of organic growth and strategic acquisitions will result in further progress in European overland transport.”
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