Status Report

Economic environment

 

After the years 2021 and 2022 that have been impacted from extraordinary favourable economic conditions and results, the Group achieved solid results in 2023 in a business environment characterised by the continuous uncertainties of the Ukraine war, macroeconomic slowdown, interest rate increases and a surge of inflation. Supply chains have been stretched at the beginning of the year but eased rapidly during the second quarter and ended the year with overcapacity from sea and air freight carriers. Against this fast pace of change and deteriorating economic conditions, the Group confirmed its number one position globally for both Sea Logistics with 4 million TEUs managed in container traffic and Air Logistics with 2 million tons of volume. Road Logistics and Contract Logistics contributed with further improved results to the overall success of the Group.

The Group’s service offering is specialised in managing complex end-to-end supply chain solutions within a global network, controlled by Logistics Control Towers, and executed by all the business units. These integrated logistics solutions not only increase transparency and efficiency in the supply chain but also optimise the information flow between the service partners and customers. This allows the Group to support and add value to its customers’ value chain, a key factor in highly competitive markets.

In 2023, the world economy experienced a global slow down with an estimated growth of 2.6 per cent (2022: 3.0 per cent growth). For 2024, global growth of a modest 2.4 per cent is forecasted. (Based on: World Bank, Global Economic Prospects, January 2024)

In 2023, the international logistics industry experienced world trade volume growth below the level of 2022 with an estimated increase of 0.4 per cent in 2023 compared to 5.2 per cent in 2022. (Based on: IMF, World Economic Outlook Update, January 2024)

The sea and air freight carrier market in 2023 experienced continuous reduction in freight rates and increase in freight capacities caused by a slowdown in economic activities, and the normalization of supply chains. This development combined with an unexpected surge in inflation drove cost increases to the Group’s operational efforts to optimise operational efficiency at the execution of shipments, connected with increased pressure on gross margins.

The Group’s volume remained stable against a declining market. In combination with the reduced freight rates, the Group delivered a net turnover 39.5 per cent lower than in 2022. Gross profit reduced by 20.9 per cent and the Group EBIT declined by 49.4 per cent in 2023.


Group Strategy

The Group’s strategy Roadmap 2026 was presented at the Capital Markets Day on March 1, 2023, with the goal of becoming the most trusted supply chain partner supporting a sustainable future. The new strategy has evolved from the last Roadmap 2022 and is made up of four cornerstones that reflect Group priorities: the Kuehne+Nagel Experience, Digital Ecosystem, Living ESG and Market Potential. The Group is committed to providing an excellent and unique Kuehne+Nagel Experience for both employees and customers and support the industry’s best logistics experts with a Digital Ecosystem that turns innovative technology, data, and automation into competitive advantages. Living ESG incorporates the belief that sustainability is an integral part of the future – for people, planet, and business. Market Potential represents Group ambitions for growth and expansion by building on successes in Healthcare Solutions, e-commerce, and Customs, and by introducing new solutions for customers in the segment of Renewable Energy. Roadmap 2026 is the first step toward achieving the longer-term Vision 2030: becoming the most trusted supply chain partner supporting a sustainable future. 

With its commitment to the UN Global Compact, the Group continues to strive to be a frontrunner in sustainable logistics. The Group has set ambitious, science-based greenhouse gas emission reduction goals for its own operations and also supports customers with their transition to a low-carbon and ultimately net-zero aligned business model. As one of the world’s leading logistics providers, the Group acknowledges its responsibility to address climate change, manage climate-related risks and opportunities and develop solutions that decarbonise global supply chains.

The Group believes in empowering and developing its employees and attracting new talents to deliver an extraordinary customer and employee experience.

The Group’s non-financial report addresses in detail the Group’s commitment to the principles of sustainable business practices and performance for the respective calendar year.