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| Panalpina gains market share in 2008 | 03/12/2009
| Organic growth despite a challenging market environment |
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| | Panalpina, the global forwarding and logistics service provider, achieved a net forwarding revenue for 2008 of CHF 8.9 billion. Compared to the previous year, this is equivalent to purely organic growth of 2.7% or 10.1% currency adjusted. Both the air freight and ocean freight sectors of the company grew quicker than the market overall. Gross profit, EBITDA and net earnings were significantly negatively influenced by currency fluctuations and the withdrawal from the domestic business in Nigeria. EBITDA was negatively impacted by CHF 100 million including one-time expenses due to the withdrawal from Nigeria as well as costs associated with ongoing investigations; legal and consulting fees of CHF 45 million are included in the aforementioned amount. In spite of all this, the company was able to increase free cash flow by 29.2% – largely thanks to the strict management of net working capital and reduced investments in comparison with the previous year. The cost-cutting program implemented already in February 2008 is to be continued into 2009. In order to prepare the company for the difficult market conditions ahead, the program will involve the reduction of between 1,400 and 1,600 jobs worldwide. |
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| | "Taking into account all challenges with which we were confronted in 2008, I am satisfied with these results. We were able to gain market share in the air freight and ocean freight sectors and won new contracts in all segments. These results underscore the success of Panalpina's asset-light business model, which enables us to react quickly to the market and to the individual requirements of our customers", comments CEO Monika Ribar. "Especially in the current economic conditions it makes even more sense to provide services for the most part without capital-intensive infrastructure of our own, but based on state-of-the art IT systems and through the professional management of first-class sub-contractors." |
Panalpina Group: consolidated results 2008
| | | | | | | | | In CHF (millions) | | 2008 | | 2007 | | +/– | |
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| Gross revenue | | 10,597.1 | | 10,548.2 | | +0.5% | |
| Net forwarding revenue | | 8,877.6 | | 8,640.6 | | +2.7% | |
| Gross profit | | 1,741.6 | | 1,803.4 | | -3.4% | |
| Free cash flow | | 177.6 | | 137.5 | | +29.2% | |
| EBITDA | | 240.7 | | 360.8 | | -33.3% | |
| EBIT | | 193.0 | | 299.4 | | -35.5% | |
| Net earnings | | 113.8 | | 210.6 | | -46.0% | |
| Headcount (31.12.2008) | | 14,804 | | 15,301 | | -3.4% | |
| Dividend per share in CHF (gross) | | *1.90 | | 3.20 | | -40.6% | |
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*Proposal for submission to the Annual General Meeting on May 5, 2009
| Solid development of gross profit
Although the gross profit declined by 3.4% before currency adjustment, the Asia-Pacific (+6.3%) and Latin America (+12.1%) regions were able to post growth, whereas the losses posted in Europe/Middle East/Africa (-7.2%) and North America (-6.2%) can for the most part be traced back to negative currency effects and the consequences of the withdrawal of the domestic business in Nigeria. There were encouraging developments in freight volumes both between Asia and Latin America and within Asia, and the Supply Chain Management segment in Latin America also looked positive.
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| Leading market positions in air and ocean freight successfully maintained
The Group maintained its position as the world's no. 3 in air freight and the no. 4 in ocean freight. Panalpina's air freight volumes fell by less than the overall market average, and the company was able to grow faster than the market in ocean freight. Overall, Panalpina transported 901,000 tons of air freight and 1.278 million TEUs. The third main pillar of the company, Supply Chain Management, was particularly affected by the withdrawal from Nigeria as well as by declining order volumes from the automotive industry. Nevertheless the extremely diverse Supply Chain Management market has presented a wealth of opportunities for the Group and the respective business set-up within Panalpina has been expanded over the last year in order to maximize growth potential.
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| Withdrawal from Nigeria
As at the end of September 2008, Panalpina definitively terminated all domestic services in Nigeria including customs clearance, thereby restricting its activities to arrival port and airport. The withdrawal from the domestic business, which was largely reliant on the oil and gas industry, was completed smoothly.
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| Job reductions as a result of reduced freight volumes
As a result of the clearly declining freight volumes caused by the current financial and economic crisis, Panalpina will intensify the cost-cutting program it introduced in 2008. In 2009, this will include the reduction of between 1,400 and 1,600 jobs worldwide, approximately 10% of the overall workforce. Panalpina is looking for socially acceptable solutions for all those affected. Monika Ribar underlines that the reduction in the workforce is directly linked to falling freight volumes and will affect employees in all areas of the company. However, no compromises will be made as far as customer service and quality standards are concerned. |
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| Dividend distribution and postponement of share cancellation
Based on the results for fiscal 2008, the Board of Directors of Panalpina World Transport (Holding) Ltd. proposes to the Annual General Meeting a dividend of CHF 1.90 per share. This corresponds to a payout ratio of 39.5% (2007 36.6%). In connection with the share buyback program completed in September 2008, the Board of Directors postponed – until further notice – the proposal to the Annual General Meeting to decrease the share capital and subsequently to cancel the shares. |
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| Outlook
In order to ensure and even strengthen the company’s competitiveness during the current difficult global economic situation, Panalpina has taken appropriate measures at an early stage. "Our core business remains healthy and we are following a clearly customer focused strategy”, stresses Monika Ribar. “Our asset-light business model has proven to be very successful, and our portfolio of customers across a variety of sectors is well balanced. With these ingredients and our global presence, we are ideally positioned to increase our share in the traditionally very fragmented and also currently volatile forwarding and logistics market." |
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The Panalpina Group
The Panalpina Group is one of the world's leading suppliers of forwarding and logistics services, specializing in intercontinental air freight and ocean freight shipments and supply chain management solutions. Thanks to its in-depth industry know-how and state-of-the-art IT systems, Panalpina provides globally integrated door-to-door forwarding solutions tailored to its customers' individual needs. The Panalpina Group operates a close-knit network with some 500 offices in 76 countries. In a further 60 countries, it cooperates closely with partner companies. Panalpina employs about 15,000 people worldwide.
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