Kühne+Nagel has chosen the financial metropolis of London as the venue for its latest Capital Markets Day. In the middle of the City, the top management around CEO Stefan Paul presented the "Roadmap 2026" on March 1. The plans were very well received on the London Stock Exchange, which is only about 15 minutes' walk from the presentation room: Kühne+Nagel gained up to 9% in trading on the LSE. On the SIX Swiss Exchange, the company's home exchange, the share price rose by as much as 9.3% at its high for the day on March 1. Even before the first prices were quoted here in Switzerland and in the UK, Kühne+Nagel had published its balance sheet for 2022. "The company achieved a new record in terms of both net sales and profit," the Schindellegi-based group announced.
At CHF 39.4 billion, revenues were one-fifth higher than in 2021, while Kühne+Nagel's bottom line of CHF 2.81 billion was even 30% higher than in the previous period. All four business units contributed significantly to the success, according to the company. Ocean freight - where Kühne+Nagel describes itself as the global number 1 - grew particularly strongly. In 2022, the division's revenues increased by 37% to almost CHF 18.8 billion. The operating result (Ebit level) climbed by almost a third to a good CHF 2.0 billion. In the second largest business segment, air freight, Kühne+Nagel also claims the position as world market leader. With sales growth of 8% to CHF 11.7 billion, EBIT in this segment increased disproportionately by 21% to CHF 1.4 billion in 2022. The strong results cannot hide the fact that the logistics giant has felt the economic slowdown. In the fourth quarter of 2022, sales and Ebit shrank significantly compared to the same period last year.
Citing geopolitics and inflation, management continues to see a challenging environment. "However, we expect the positive growth and earnings development that has been sustained for many years to continue this year," explain those responsible. In this context, however, it is important to exclude the volumes and results achieved in 2021 and 2022 as part of the Corona special stimulus. In any case, the CEO is already thinking beyond the current period. "Now is the right time to launch our new strategic roadmap 2026," Stefan Paul said at the Capital Markets Day. With a focus on quality, customer satisfaction and employee motivation, he wants to ensure the sustainable corporate success of Kühne+Nagel.
In a presentation of almost 150 pages, the CEO, together with CFO Markus Blanka-Graff, explained the plans for the future. Analysts and investors were particularly interested in the financial targets. Among other things, Ebit is to increase by an average of between 17% and 19% per year until 2026 compared to the 2019 level. "At group level, Kühne+Nagel is targeting a conversion rate of 25% to 30% by 2026," the speakers explained. This ratio stands for ratio of Ebit to gross profit. The plan presented means that the Group aims to roughly maintain the top level of the past two years (see chart). With the current outlook, Kühne+Nagel clearly exceeds previous market expectations. The analysts at J.P. Morgan see an upward deviation of more than 50% for Ebit.
Leonteq uses the momentum of Kühne+Nagel for a special new issue. With the Conditional Coupon Barrier Reverse Convertible (BRC), investors can participate in further rising prices with partial protection. In addition, the coupon payment typical for the BRC is possible. One after the other: For the first time after 18 months and then semi-annually, the Mid Cap is put to the test. If Kühne+Nagel quotes above the autocall trigger level of 100% of the initial fixing on the observation date, the product matures early. The further the underlying is above the initial level, the higher the redemption. From the strike, the BRC participates 100% in rising prices.
Assume that the underlying increases by one tenth by the first observation date (September 16, 2024). The early redemption coupon would then be 10% or CHF 100. At the same time, a "Conditional Coupon" of 6% (CHF 60) would be due. The investment would thus be redeemed early with a total return of 16%. If Kühne+Nagel does not make progress or declines in the next 18 months, the product will continue to run. However, the coupon lost at the first cut-off date would not be lost. Thanks to the memory function, the payout is made up as soon as the condition is met at a later date. This also applies in the event of expiry. If there is no early termination and redemption and the SMIM member is also at or below the initial value at the final fixing date, the barrier comes into play. As long as Kühne+Nagel then exceeds the threshold of 79% of the initial fixing, Leonteq will pay back the full nominal. Otherwise, the issuer would deliver the underlying at the corresponding subscription ratio. Investors would therefore have to expect a loss.
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