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NVOCC and Freight Forwarder Review
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Panalpina reports successful business year
Substantial growth in all core businessesAs a result of increases in sales and profit well above market growth, the global forwarding and logistics group Panalpina further consolidated its position in the marketplace in financial year 2004. The sustained demand for global logistics services is reflected in attractive new business activities and forms an ideal basis for further growth.
Against the background of a generally positive trend in the global economy, Panalpina showed significant growth in the 2004 financial year in all core activities, increasing gross revenues by 13.6% to CHF 7.452 billion and net revenues by an impressive 14.1% to CHF 6.120 billion. At CHF 174 million, the operating result (EBITA) exceeded the previous year’s figure by 14.3%, while EBIT rose 10.7% to CHF 153 million. Consolidated net income increased by 14.0% to CHF 111 million.
99% organic growth
According to Board Chairman Gerhard Fischer, the successful fiscal 2004 and the fact that Panalpina is growing faster than the market prove that the company has done its homework: ‘We have achieved our main objectives and increased our market share not only in all regions but also in all of our core activities. The main source of revenues has been the major relocation of production activities to Asia with the consequent strong growth in freight flows.’ Despite two acquisitions (the Scottish firm Grampian and the South Korean company IAF), Panalpina achieved 99% of the growth in 2004 organically.
Number 2 in air freight, number 3 in ocean freight
CEO Bruno Sidler is especially satisfied with developments in the Group’s core activities. In both air freight and ocean freight operations, Panalpina posted above-average increases in the tonnage shipped in 2004 (each up by 21%): a total of 750,000 tons was transported by air while ocean freight shipments grew to a total of 824,200 teus. Panalpina thus successfully defended its global rankings - it is the world’s number 2 in air freight and number 3 in ocean freight.
Non-asset-based business model increases flexibility
Revenues in Panalpina’s third core area, Supply Chain Management, rose by 23% in 2004. Here, Panalpina sees its role differently from its main rivals who offer integrated contract logistics and generally use their own infrastructure to store goods and distribute them by land for major customers. It prefers to act as a lead logistics provider, concentrating on the intelligent management of these logistics chains and providing the same solutions via selected best-in-class subcontractors and strategic partnerships in the various regions. This non-asset-based business model increases the Group’s flexibility, reduces risks and avoids tying up funds.
Comprehensive and attractive new business activities
In 2004, Panalpina managed to win new customers and orders in all segments ’ both among SMEs with international activities (which generate around three quarters of total sales) and among major global customers. Major new contracts were clinched in all key industrial sectors, e.g. with Intel, Nokia, Ericsson, Alcatel, Siemens and Samsung in the hi-tech and telecoms sector, with Adidas, Escada, H and Otto Versand in the retail and fashion sector and with BMW, Porsche and Hyundai in the automotive industry. In the oil and gas industry’s supply chain sector, where Panalpina has remained the undisputed global market leader for years, significant new contracts have been concluded with, for example, BP in Azerbaijan and Agip KCO in Kazakhstan.
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