Credit: K+N
Semiconductor and cloud infrastructure shipments helped drive almost 10% growth in Kuehne + Nagel’s third-quarter airfreight volumes, contrasting with falling tonnage at rival DSV, as it pruned accounts and managed Schenker integration effects.
K+N handled 619,000 tonnes in Q3, up 9.8% year on year, with growth accelerating from 2.8% in Q2. Air Logistics net turnover rose 38%, to CHF2.4bn ($2.9bn), while EBIT increased 84%, to CHF169m.
Its results presentation identified semiconductors and cloud infrastructure as key growth drivers alongside general hard cargo, and highlighted export strength from South-east Asia, excluding China.
Gross profit per 100kg was broadly stable, quarter on quarter, while unit costs edged lower. The division’s conversion ratio increased to 32.4%, from 22.8% a year earlier.
The benefits of hi-tech demand extended beyond airfreight; K+N reported rising demand from the sector in Road Logistics, while recent investment in hi-tech sector growth was also helping improve Contract Logistics earnings.
The performance contrasts with DSV, which yesterday reported a 3% decline in both air and sea freight volumes. Growth in technology business in APAC and North America partly offset weaker European activity, reduced ecommerce volumes, and other pressures.
DSV also attributed part of its airfreight decline to deliberate yield-management measures. CEO Jens Lund told analysts around two percentage points of the 3% reduction reflected the “sanitising” of accounts.
The contrasting performances highlight the importance of maintaining commercial momentum during acquisitions. K+N is reporting volume and market share gains, while DSV is working to stabilise its underlying business as it integrates Schenker.
Jefferies analysts described K+N’s results as “another beat and raise”, attributing the improvement to strong volume growth, yields, and cost control. Their assessment of DSV focused on stabilisation of the underlying business, allowing acquisition synergies to drive earnings growth.
Investors nevertheless welcomed DSV’s results, sending its shares up 15.1% yesterday to DKr1,381.50, from DKr1,200 the previous day – although they remained well below February’s DKr1,900+.
K+N’s reaction was more muted: its shares were trading 0.7% higher, at CHF231.50, at 10.55am UK time today, following its results and upgraded outlook.
Across K+N, Q3 net turnover rose 22% year on year, to CHF7.4bn, while EBIT increased 53%, to CHF435m, and earnings rose 53%, to CHF316m.
The group raised its full-year recurring EBIT guidance to CHF1.5bn–1.6bn, from CHF1.35bn–1.55bn, lifting the midpoint by CHF100m.
Sea Logistics volumes increased 4.5%, to 1.16m teu, supported by market share gains on ex-Asia and transatlantic routes. Divisional EBIT rose 55%, to CHF172m, with yields improving 5% quarter on quarter.
Road Logistics net turnover increased 14%, while EBIT grew 40%, to CHF28m. Contract Logistics EBIT rose 7%, to CHF66m, although new customer projects required upfront investment and the addition of around 4,000 employees. The division had 37 new contracts in implementation.
Alongside growth from customers’ technology investment, K+N reaffirmed its expectation of an AI-related uplift of CHF100m–150m emerging from 2027.
That remains separate from its broader cost reduction programme, which it said was ahead of schedule, and was expected to contribute more than CHF150m in gross savings this year.
The presentation provided no further breakdown of the AI applications or measured productivity gains underpinning the target.