Annual Report 2013 - Mainfreight
Annual Report 2013 - Mainfreight
Annual Report 2013 - Mainfreight
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Margin levels have been impacted<br />
as competitive tension has<br />
increased due to market and<br />
economic conditions.<br />
<strong>2013</strong><br />
Will see our first<br />
<strong>Mainfreight</strong>-branded<br />
vehicles on the road in<br />
Europe.<br />
This is our most challenging business unit,<br />
as we confront and guide the business<br />
through a series of issues – including<br />
high-margin earning customer losses,<br />
poor economic trading conditions, and the<br />
transition from private ownership to being<br />
a contributing member of the Group. All<br />
this with the expectations that our culture<br />
brings: placing value on team members and<br />
customers, and striving for ever-improved<br />
performance.<br />
We have been able to minimise revenue<br />
loss as increased sales activities to replace<br />
lost customers have been moderately<br />
successful. Unfortunately fixed costs and<br />
the competitive environment contributed<br />
to a decrease of 42.7% in this year’s<br />
€9.46 million EBITDA figure.<br />
Whilst our financial results are less than<br />
satisfactory (poor), they certainly do not<br />
reflect the effort and contribution from our<br />
team to position this business for growth<br />
and improved profitability.<br />
During the year we have extended our<br />
network, adding seven new branches:<br />
> > Paris, France: for Airfreight, with the<br />
establishment of an office at Charles<br />
de Gaulle Airport in Paris<br />
> > St. Petersburg and Moscow, Russia:<br />
opened sales and customs offices<br />
> > Transport operations in Cluj-Napoca,<br />
Romania; Kiev, Ukraine; Hamina, Finland;<br />
and Katowice, Poland<br />
Our European Transport operations have<br />
undergone a full reorganisation, now utilising<br />
a common management structure, and the<br />
rationalisation of agency agreements to<br />
reflect Group trading over country support.<br />
We expect to launch the first of our<br />
<strong>Mainfreight</strong>-branded vehicles in June <strong>2013</strong>.<br />
We have been able to secure the <strong>Mainfreight</strong><br />
brand in the Netherlands after a legal<br />
challenge and subsequent settlement of<br />
€1.5 million.<br />
In our Logistics operations we have been<br />
successful in retaining long-term contracts<br />
with a number of our larger customers, and<br />
once again received “Partner Status” with<br />
John Deere, making this the fourth year in<br />
a row.<br />
Whilst utilisation of all our warehouses has<br />
improved considerably with the gaining of<br />
new customers, margin levels have certainly<br />
been impacted as competitive tension has<br />
increased due to market and economic<br />
conditions.<br />
Efficiency gains that we are able to<br />
introduce for these customers will reflect in<br />
better margin management over time.<br />
Our Air & Ocean business, whilst still small in<br />
comparison to the other European divisions,<br />
is well positioned for more growth with a<br />
comprehensive six office network across<br />
France, Netherlands and Belgium. Crossselling<br />
across our European customer<br />
base is well advanced and improvement in<br />
Airfreight growth has been seen, particularly<br />
from the USA.<br />
Again it is our intention to focus our<br />
development on our own global network,<br />
particularly from and to Asia and the<br />
United States.<br />
Whilst we are unhappy with the financial<br />
return since acquisition, we are confident<br />
of our presence and potential in Europe,<br />
the strategic positioning towards a stronger,<br />
more global logistics capability and the<br />
customer relationships we are forging.<br />
As a Company we cannot ignore Europe.<br />
We expect that further progress will be<br />
made over the next 12 months towards<br />
improved returns, and we are committed to<br />
this business becoming a larger, stronger<br />
contributor to the Group.<br />
20 <strong>Mainfreight</strong> | <strong>Annual</strong> <strong>Report</strong> <strong>2013</strong>