Kuehne + Nagel (KNIN) Q2 2024 earnings summary

Executive summary

• Q2 EBIT reached CHF 402 million, improving from CHF 376 million in Q1; adjusted EBIT was CHF 419 million, excluding restructuring costs, while H1 EBIT declined 32% year-over-year to CHF 778 million and net turnover for H1 2024 was CHF 11.6 billion, down 9% year-over-year.

• Cost control, digitalization, and ongoing yield management drove recurring unit cost reductions in Sea and Air Logistics, supporting margin resilience.

• Free cash conversion was seasonally lower in H1, with Q2 stronger than Q1, and cash and cash equivalents at CHF 657 million at June 30, 2024.

• Comprehensive income rose to CHF 680 million from CHF 608 million, mainly due to positive foreign exchange differences.

Financial highlights

• Q2 EBIT: CHF 402 million (CHF 419 million adjusted); H1 EBIT: CHF 778 million; H1 gross profit: CHF 4.3 billion, down 8% year-over-year.

• EBITDA for H1 2024 was CHF 1,185 million, a 22% decrease year-over-year.

• Gross profit margin improved to 37.0% from 36.5% in H1 2023.

• Free cash flow for H1 2024 was CHF 40 million; cash and cash equivalents at period end were CHF 862 million.

Outlook and guidance

• Expect stronger group profits in H2, driven by higher sea freight yields (at least through Q3), anticipated air freight peak in Q4, and continued cost management.

• Positioned for growth as demand recovers, with streamlined structure and enhanced customer proximity; cost savings from digitalization and process improvements expected to offset inflation.

• Red Sea disruptions require enhanced logistics services and are expected to persist.

• Acquisition of City Zone Express is expected to close in Q3 2024, expanding cross-border logistics in Southeast Asia.