Kuehne + Nagel – Efficiency to the Core
Jersey City, New Jersey – U.S. Headquarters
October 15, 2002

Key Personnel:
Rolf Altorfer, President
Greg Martin, Sr. Vice President – Sales & Marketing
Juerg Bandle, Sr. Vice President – Ocean
Rick Delapaz, Dir. International Airfreight
Wai Wong, Manager, Customer Information Solutions

Kuehne + Nagel promises to get the job done – and delivers. The plan is very simple: provide high quality service according to well crafted processes and customize whenever necessary to satisfy demanding customers. The result is year after year growth and profitability. The emphasis is on performance not Power Point presentations.

Kuehne + Nagel serves 85% of the world GDP. It is the world’s largest ocean freight forwarder handling in excess of 900,000 TEU’s annually in its Blue Anchor NVOCC operation. Its air freight forwarding operations are among the five largest in the world.

Kuehne + Nagel has ISO 9001 certification for all its company locations. They are all integrated to the same IT operations and financial platforms. The IT is being upgraded constantly using KN’s own in-house team of programmers.

Kuehne + Nagel officers, managers and staff understand the importance of value added services, and must develop value-adds faster and better than competitors to maintain margins and continue growth.

In line with these practicalities, Kuehne + Nagel Air Freight Service has added special logistics services for aviation, vessel operators, high tech and semi-conductor manufactures. Kuehne + Nagel’s aviation logistics provides spare parts for major airlines, including larger items such as engines. High-tech offerings include testing, kitting, pick & pack, merge in transit and localization.

Kuehne + Nagel manages inventories and vendor contracts for ship replacement parts. For semi-conductor manufacturers, Kuehne + Nagel does logistics management at wafer fabrication construction sites.

With regard to ocean freight, Kuehne + Nagel’s current emphasis is on better control of inland transportation. Kuehne + Nagel is utilizing Information Technology solutions as it expands its brokerage and transportation management particularly in North America.

Kuehne + Nagel’s strategic acquisitions have been good ones. The purchase of USCO adds world class value-added warehousing/3PL capabilities. The strategic relationship with SembCorp gives Kuehne + Nagel excellent intra-country distribution in a dozen Asian countries. Serving as the lead logistics provider for Nortel is one of the first global LLP arrangements.

Kuehne + Nagel is a solid global transportation operation that is “large enough yet small enough” to nimbly move in the global 3PL market place. We expect them to be a leader for years to come.

Here are the numbers to back up our opinion.
Kuehne + Nagel Key Data


 ($
Millions)


2000


2001

Turnover


5,500


5,626

Gross profit


969


1,151

% of turnover


11.1


13.6

EBITDA


183.9


219.9

% of Gross profit


12.7


12.7

EBIT


132.2


142.0

% of Gross profit


9.1


8.2

Income before tax


129.3


151.8

% of Gross profit


8.9


8.8

Net income for the year


83.9


107.0

% of Gross profit


5.8


6.2

Depreciation and amortization


51.7


77.8

% of Gross profit


3.5


4.5

Operational cash flow


132.6


183.1

% of Gross profit


9.1


10.6

Capital expenditures


83.9


413.6

% of Cash flow


42.2


150.6

Balance sheet total


1,609


1,591

Non current assets


306


670

Equity


589


657

% of Total assets


24.4


27.5

Employees at year end


9,181


11,613

Manpower expense


533


637

% of Gross profit


36.6


36.9

Gross profit per employee


70,435


66,166

Manpower expense per employee


38,686


36,618

FY 2001


Turnover


Gross Profit

Europe


3,132


615

Americas


1,621


370

Asia/Pacific


565


136

Middle East/Africa


308


30

Return on equity 18.9%

Receivable Terms 37.8 days

36% of employees have over 25 years with Kuehne + Nagel.

49% of employees have over 10 years with Kuehne + Nagel.

 

Sources: A&A Primary Research, http://www.kuehne-nagel.com/

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