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

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Reports of the Board of Directors and the Executive Board 16 registered strong volume growth during the first half of the year, before cooling off in the second half in the absence of a peak season. Until late summer, many ocean carriers were successful in implementing several rounds of considerable rate increases, making it more difficult for the Group to lift its unit profitability more rapidly from the historically low levels at the beginning of the year due to the time lags involved in passing on rate increases to customers. Gross profit generated through the Group’s Logistics activities posted a small growth of 1% to reach a total of CHF 360 million. While this segment was also able to benefit from higher transported volumes, particularly the oil and gas and projects businesses were still lagging the recovery. In 2010, the Panalpina Group generated 45 % of its gross profit with Air Freight, 31% with Ocean Freight and 24 % with Logistics. Gross profit per segment 2010 2009 in million CHF 700 600 500 400 300 200 100 0 667 562 453 458 360 357 Air Freight Ocean Freight Logistics Gross profit per segment (2010) Air Freight 45% Ocean Freight 31% Earnings before interest, taxes, depreciation and amortization (EBITDA) The Group’s EBITDA was substantially hit by a charge of CHF 128 million (contained in the category “other operating expenses”) which the Company recognized to cover all costs arising from the settlement of the two legal claims in the United States (FCPA, anti-trust) and associated compliance consulting costs as well as from an internal reorganization project. The Group’s EBITDA decreased by 22 % at actual exchange rates (– 18 % in local currencies) from CHF 80 million in 2009 to CHF 62 million in 2010. Apart from these non-recurring costs, operating expenses which directly influence EBITDA developed as follows: • Personnel expenses increased modestly by 1% (5% currency adjusted) from CHF 879 million in 2009 to CHF 891 million in 2010. With the freight markets being in full swing and business volumes increasing strongly, the Group moderately increased its headcount to accommodate the growth in shipments. At the same time, as described in more detail above, productivity of the existing workforce rose substantially, thus the increase in headcount (and hence personnel expenses) took place at a much smaller rate than the increase in shipments, leading to a reduction in the personnel expenses-to-grossprofit ratio from 64% in 2009 down to 60% in 2010. • Other operating expenses increased by 26 % (30% currency adjusted), from CHF 419 million in 2009 to CHF 527 million in 2010. The main reasons for the increase were the aforementioned charges included in this cost category, out of which fines in the amount of CHF 27 million were paid to US authorities during 2010. Furthermore, expenses for the fiscal years 2010 and 2009 comprise non-recurring legal and consulting fees mainly related to the FCPA investigation by the US Department of Justice, which amounted to CHF 18 million in 2010 and CHF 55 million in 2009. Overall development Logistics 24% Adjusted EBITDA in million CHF Adjusted operating expenses 2010 2009 135 208 1,272 1,242 Figures adjusted for non-recurring charges as described above. Panalpina Annual Report 2010
Reports of the Board of Directors and the Executive Board Regional development The Company assesses segmental operating performance primarily from a geographical perspective, as the Group’s operations are predominantly managed by geographical location. A useful measure to assess the operating performance by region is EBITDA. The segmental EBITDA provided in the financial accounts excludes the non-recurring charges incurred in 2010 related to fines and related expenses as well as reorganization costs in order to make a comparison with prior year more meaningful. Moreover, the following extraordinary costs had an influence on the EBITDA per region during the reporting period: • North America booked CHF 6 million in extraordinary legal and consulting fees in 2010 (2009: CHF 22 million). • The region labeled “Corporate” absorbed extraordinary legal and consulting fees of CHF 12 million in 2010 (2009: CHF 33 million). • There were no other material non-recurring charges incurred in any of the other reporting regions during the reporting year. Adjusted EBITDA per region 2010 2009 in million CHF 100 Balance sheet Current assets The Group’s cash and cash equivalents amounted to CHF 529 million on December 31, 2010 and thus remained virtually unchanged from the CHF 532 million on December 31, 2009. The substantial recovery of business volumes resulted in an increase of the net working capital, which was largely offset by the increase in profitability of the operating business. Trade receivables and unbilled forwarding services increased by CHF 93 million, from CHF 940 million at the end of 2009 (equivalent to 49 % of total assets) to CHF 1,033 million at the end of 2010 (equivalent to 52 % of total assets). The increase in trade receivables can mainly be attributed to the strong increase in turnover. In total, net working capital intensity (defined as net working capital as a percentage of gross forwarding revenue) ended the reporting year with a record low level of 1.6 %. Other current assets remained relatively stable and amounted to CHF 125 million at the end of the reporting period 2010 compared to CHF 127 million at the end of the reporting period 2009. Non-current assets 17 80 60 40 20 0 –20 –40 78 43 Europe/ Middle East/ Africa and CIS –17 –27 North America Figures adjusted for non-recurring charges as described above. 19 15 Central and South America 92 64 Asia Pacific 18 –15 Corporate The Group’s non-current assets declined slightly from CHF 326 million on December 31, 2009 to CHF 303 million on December 31, 2010. The reduction is primarily a result of the decrease in property, plant and equipment due to a lower level of capital expenditures and the strength of the Swiss franc versus major foreign currencies. Total assets Cash and cash equivalents Trade receivables and unbilled forwarding services in million CHF Other current assets Non-current assets 2010 2009 529 1,033 125 303 1,990 532 940 127 326 1,925 Trade payables and accrued cost of services The Group’s trade payables and accrued cost of services, which jointly comprised 59 % of total liabilities on December 31, 2010, increased to CHF 696 million, compared to CHF 679 million on December 31, 2009. Panalpina Annual Report 2010
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Page 3 and 4: Glossary Tonnage A ship’s freight
Page 5 and 6: Contents Introduction 4 An Intervie
Page 7 and 8: Our products continue to play a maj
Page 9 and 10: Talking of Dubai, there have been i
Page 11 and 12: 9 exported by these firms, instead
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Page 33 and 34: Air Freight Ocean Freight Logistics
Page 35 and 36: Core Activities Ocean Freight Panal
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Sustainable Growth Distribution Pol
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Appendix 157 Kuwait Safat Luxembour
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Appendix Imprint 159 Panalpina Worl
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Annual Report 2010 (PDF, 5.2MB) - Panalpina Annual Report 2012

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