“I am very satisfied with Panalpina’s figures for the first half of 2007,” comments Chief Executive Monika Ribar. “After an exceptionally outstanding first quarter, we are in a position to report further convincing results that are in line with our ambitious growth targets. I am especially pleased that we were able to expand gross profit at a faster rate than our turnover, while the month of June even showed the highest gross revenue in the Company’s history. This solid development was underpinned by favorable market conditions and continued demand from our customers, but it also proves the soundness of Panalpina’s business model and the outstanding performance of our dedicated staff around the globe.”
|in million CHF||HY1 2007||HY1 2006||+ / -|
|Net forwarding revenue||4,034.6||3,691.7||9.30%|
|Contribution margin (gross profit)||890.9||758.3||17.50%|
The strong overall performance was again jointly achieved by contributions from all of Panalpina’s four reporting regions. Contribution margin (gross profit) grew by 6.1% in Central and South America, 14.2% in Asia / Pacific, 15.9% in North America and 20.8% in Europe / Africa / Middle East / CIS. Asia-outbound remains the most important traffic generator with the routes to Europe and to Latam showing the strongest developments.
Panalpina’s air and ocean freight activities continued to increase well above the respective market growth rates, with air freight tonnages increasing by 9.4% (market slightly above 4%) and ocean freight volumes by 14.6% (market 9 to 10%). On gross profit level, air freight grew by 22.4%, ocean freight by 8.1% and supply chain management activities by 20.7%. While ocean freight margins were again impacted by currency fluctuations and higher rates, Panalpina successfully further optimized its customer portfolio in both air freight and supply chain management by shifting from higher-volumes to higher-margin business.
Panalpina once again managed to contract further interesting new business in all of its strategic key industries, which include the oil and gas, automotive, healthcare, retail and fashion, and hi-tech sectors. Due to the continued significant growth in business from the telecommunications sector, Panalpina recently established “Telecom” as its sixth industry vertical. Simultaneously, the Group implemented a new industry vertical organization to even better capitalize on this successful approach, to focus on leveraging global customer knowledge in certain specialized industries.
The Group expects a further solid macroeconomic environment and foresees the developments in Europe / Africa / Middle East / CIS as well as in Apac to more than offset any possible economic slowdown that might be encountered in the US. As a consequence of the positive effects of growing globalization, Panalpina rates the overall market trends as extremely favorable and is confident in meeting its targets for 2007.
Due to its continuous organic growth, Panalpina’s cash balance was further increased despite of substantial dividend pay-outs. Consequently the Board of Directors has decided to return excess capital to the shareholders by launching a share buyback program for up to 5% of the total share capital, which represents a maximum of 1,250,000 registered shares and a total market value of approximately CHF 300 million at the current share price. A second trading line at the SWX Swiss Exchange will be opened on 13 August 2007. It is intended to cancel the repurchased shares; the respective proposal to reduce the share capital is expected to be submitted to the shareholders at the Annual General Meeting in 2009. The Board of Directors underlines that the share buyback will neither impact Panalpina’s plans for further organic growth nor its potential to conduct bolt-on acquisitions as the ongoing cash flow and debt capacity continue to provide the Group with significant financial means.