K+N sets out aggressive sales plan

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Kuehne + Nagel is launching an aggressive expansion plan for 2009, which will see it recruit 400 extra sales staff globally, 80 in the UK.

The 3PL giant’s plans to seize a larger chunk of the market include further investment into niche markets, such as aviation, wines & spirits, and hotels.

Tim Scharwath, chief executive of North West Europe, said: “It is our growth strategy that is our primary target in the coming year, rather then our profitability.”

Nevertheless, the company has set out a cost reduction strategy for 2009 which will involve reducing man power across all areas of the business in line with volume reduction, and reduction in overheads by ten per cent.

The company has posted what Scharwath referred to as “record results” for 2008, despite its reported fall in volumes during the third quarter of 2008, and the negative growth experienced in the fourth.

Group sales grew by three per cent to CHF 21,599 million (£13.047 billion), despite a negative currency hit of 6.7 per cent. CHF 374 million (£226 million) resulted from acquisitions.

There was a marginal improvement in EBITDA to CHF 1,020 billion (£617 million) compared to the previous year.

Despite adverse exchange rates, the Contract Logistics business sales were sustained at the previous year’s level. However, falling demand from a number of large customers in the US, Canada and the UK resulted in reduced capacity use and increased margin pressure.

In addition, start-up costs in some Eastern European countries hit the operational result, which was 12.2 per cent lower than in the previous year.

The Contract Logistics EBITDA margin fell from 5.3 per cent to 4.6 per cent.

The company will continue to expand its European road network, which it kick-started with the 156 million euro (£139 million) acquisition of French groupage provider, the Alloin Group, in January this year.

Scharwath said the buyout has helped bolster the company’s position in European road logistics, moving it from number eight to number six in the world. The deal is expected to support growth in volumes across Europe. Integration into the Kuehne + Nagel organisation has started.

Sea freight, the 3PL’s strongest performing business, saw volumes increase by two per cent to a total of 2,670 million containers shipped in 2008. EBITDA margin increased from 4.4 to 4.6 per cent.

Airfreight was heavily affected by the downturn, with December registering the biggest ever decline in traffic volumes. EBITDA improved slightly at +0.9 per cent.


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