Annual Report 2010 (PDF, 5.2MB) - Panalpina Annual Report 2012

Reports of the Board of Directors and the Executive Board
marked the closing of an extremely burdensome chapter in
the Company’s history and the end of a very demanding
three-year effort to address and eliminate serious compliance
concerns. The Company is now looking forward to
strengthen relationships with customers who have ceased
or reduced business activities with Panalpina due to the
investigation. To cover all costs related to the resolution of
both cases, including expenses for ongoing compliance
consulting, as well as for an internal reorganization project,
the Company recognized costs totaling CHF 128 million
in the year under review. Panalpina has also established an
industry-leading compliance organization and ongoing
programs aimed at ensuring rigorous adherence to country
specific anti-bribery and anti-trust laws. Designing stateof-the-art
compliance policies and programs with the support
of the highly-regarded Basel Institute on Governance,
establishing a dedicated global compliance organization,
conducting anti-corruption training both in-person and webbased,
implementing systematic third-party due diligence
and developing a whistleblowing program were among the
specific measures implemented by the company.
The world economy and financial markets offer a picture
marked by contradictions that points to opportunities and
risks in 2011. The consensus view is that the global economy
will probably continue its recovery in 2011 although
at a patchy pace and at a less dynamic global growth rate.
Tighter fiscal policy may have a dampening effect in many
industrialized countries. There is also a gap between countries
that have emerged from the crisis relatively unscathed
and are now on the road to recovery and those that have
their backs to the wall. Overall, world trade and global outsourcing
look set to expand further in 2011 and beyond
albeit with a bias to the emerging economies – particularly
in Asia and Latin America – which will continue to gain in
relative importance. With its global and asset-light network,
coupled with the ability to offer its customers value-add,
first-class supply chain management solutions, Panalpina
is well prepared to take advantage of the growth opportunities
ahead and to further enlarge its footprint in the global
logistics market.
Net forwarding revenue (NFR)
In 2010, Panalpina’s net forwarding revenue (NFR) amounted
to CHF 7,164 million, up 20 % from the CHF 5,958 million
the year before. This substantial increase can be attributed
to a variety of factors, including significantly higher freight
volumes fueled by the rebound in world trade and market
share gains, as well as higher average freight rates prevailing
in the market as freight capacity remained tight
throughout a large part of the year. Moreover, the booming
world economy resulted in rising oil prices which translated
into higher fuel surcharges which Panalpina passed
through to its customers.
At regional level, net forwarding revenue saw doubledigit
growth in all four reporting regions, led by Asia
Pacific (APAC) where NFR in 2010 increased by 43 % to
CHF 1,270 million. The booming Chinese economy
and the growing importance of intraregional traffic in the
region were the main drivers behind this growth.
In Europe / Middle East / Africa and CIS (EMEA), NFR
increased 14 % to CHF 3,640 million. This region remains
Panalpina’s largest in revenue terms, contributing to
slightly over half of the Group’s turnover. The export-oriented
German eco nomy benefited from the weak euro,
and together with Panalpina’s strong footprint in this
market greatly supported growth in this reporting region.
On the other hand, the substantial depreciation of the
euro (– 9 %) and also the British pound (– 5 %) vs. the Swiss
franc adversely affected net forwarding revenue in
this region (translated into Swiss francs) by nearly 8 %.
In North America (NORAM), NFR rose by 20 % to
CHF 1,409 million, a large part of which can be attributed
to the substantial volume increases on both the transatlantic
and the transpacific trade lanes which benefited
particularly from the strong growth in the Automotive
and Hi-Tech sectors. The US dollar, which depreciated 4 %
vs. the Swiss franc during the reporting period, had
a negative translation effect of approximately 3 % on this
region’s turnover.
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Compared to 2009, the Group’s NFR in 2010 in Central
and South America (LATAM) rose 20 % to CHF 845 million,
which is a reflection of the strong economies and
Panalpina’s increased focus on the main growth markets
in this region, particularly Brazil.
Panalpina Annual Report 2010