Panalpina finished the year 2014 on expectations. It more than doubled its EBIT to CHF 116.7 million (approx. US$12.90 million) in 2014 compared to the previous year. Consolidated profit jumped from CHF 11.7 million to CHF 86.5 million. Panalpina grew air freight volumes slightly ahead of the market and clearly outperformed the market in ocean freight. Significant progress was made in logistics, with the turnaround ahead of schedule.
“In 2014, we executed on our clearly laid out strategy. This shows in the results we achieved,” says Panalpina CEO Peter Ulber. “Streamlining in ocean freight continues, which is a crucial prerequisite for the large-scale and complex transition to our new business platform SAP TM in 2015. We are satisfied with the achieved growth in air freight and particularly pleased with the turnaround in logistics.”
Reported EBIT more than doubled
In 2014, Panalpina’s net forwarding revenue remained stable at CHF 6,707.1 million (2013: 6,757.6 million), while group gross profit increased 2 per cent to CHF 1,586.0 million (2013: CHF 1,561.0 million). Panalpina achieved an EBIT of CHF 116.7 million for the whole year, up from a reported CHF 48.0 million last year (adjusted for fines and goodwill impairment 2013: CHF 108 million). The reported EBIT-to-gross profit margin increased to 7.4 per cent, up from 3.1 per cent in 2013 (adjusted 2013: 6.9 per cent). The group’s consolidated profit amounted to CHF 86.5 million; up from CHF 11.7 million (adjusted 2013: 71.7 million) a year ago.
Panalpina’s air freight volumes grew 4 per cent in 2014, slightly ahead of the market (3.5 per cent). Panalpina transported 857,800 tonnes of air cargo last year (2013: 825,100 tonnes). Gross profit per tonne decreased 3 per cent to CHF 742 (2013: CHF 765), however, air freight gross profit stayed stable at CHF 636.3 million (2013: 631.4 million). On an operating profit level, air freight achieved an EBIT of CHF 112.0 million, compared to CHF 72.8 million the year before (adjusted 2013: CHF 119.3 million). The EBIT-to-gross profit margin in 2014 was at 17.6 per cent, compared to 11.5 per cent in the previous year (adjusted 2013: 18.9 per cent).
Panalpina’s ocean freight volumes grew 7 per cent year-on-year, while the market grew an estimated 4 per cent to 5 per cent. The company transported 1,606,500 TEUs (twenty-foot equivalent units) in 2014 (2013: 1,495,400 TEUs). Due to continued business wins in high-volume but lower-margin business, gross profit per TEU of Ocean Freight decreased 7 per cent to CHF 306 (2013: CHF 329), which resulted in a stable gross profit of CHF 491.5 million (2013: CHF 491.9 million). Ocean freight posted an EBIT of CHF 12.9 million in 2014, down from CHF 25.0 million in 2013 (adjusted 2013: CHF 28.0 million). The decrease in EBIT was mostly attributable to the costs of streamlining operations and continuous investments in IT. The EBIT-to-gross profit margin decreased to 2.6 per cent, down from 5.1 per cent in 2013 (adjusted 2013: 5.7 per cent).
Gross profit of the group’s logistics product continued to grow by 5 per cent to CHF 458.2 million in 2014 (2013: CHF 437.7 million). Panalpina further expanded its logistics manufacturing services (LMS) and other value-added services (VAS), particularly for the technology and fashion industries. By parting with a number of loss-making facilities and unprofitable road activities, Logistics drastically reduced its EBIT loss well ahead of schedule to CHF 8.2 million in 2014, down from a loss of CHF 49.9 million in the previous year (adjusted 2013: loss of CHF 39.3 million).