ANNUAL REPORT 2011 - Kuehne + Nagel

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Logistics industry While transport and logistics volumes developed very positively in the first half of 2011, growth steadily slowed in the second half of the year. The disruption of supply chains following the disaster in Japan and the marked rise in price of oil, had a negative impact. Exceptions were individual regional and industry-specific market segments which showed a constant growth in volume throughout the year. These benefited logistics providers like Kuehne + Nagel with a focus on appropriate regions or sectors and those who were able to rapidly adapt their structures to the changing volume situation. The general trend towards consolidation in the logistics industry continued, particularly during the first half of 2011. However, there were no transactions on such a scale as to transform the structure of the industry. The highly fragmented logistics industry is still experiencing persistent pressure on profit margins. This situation induced the Kuehne + Nagel Group to make some notable acquisitions in line with the strategy of focusing on specific regions and industries which it has pursued since 2010. Performance and results Due to the consistent implementation of the selective growth programme, the Kuehne + Nagel Group outpaced the volume growth of the market in all fields of activity. The performances of the seafreight and airfreight business units were again the main pillars of success. In both areas high internal productivity and strict cost management compensated for the costs of investments made in technology and product development and strengthening of niche segments. The EBITDA margin in relation to the gross profit remained stable at the previous year's level. Report of the Board of Directors Significant developments in overland transport were the growth in volume resulting from the further increased density of the European network and building-up of activities in growth markets (Brazil and Mercosur). A transaction of major strategic importance was the acquisition of Drude Logistik, Bad Hersfeld, whose highly functional hub facility will ensure efficiency and productivity in the European groupage network. The RH Freight Group in the UK, which was also acquired in the year under review, contributed substantial transport volumes as well as regular network services. In contract logistics the year 2011 was marked by highly divergent developments. The situation in North America was improved by an effective restructuring, the closure of unprofitable locations and new business wins. Contract logistics activities in Germany developed very favourably, while in a number of West European countries business suffered as a result of the considerable decline in demand in trade and the consumer goods industry. Particularly in France, the difficult development of the results necessitated extensive restructuring measures. These will continue to have some impact in the current fiscal year. The internal efficiency of the Kuehne + Nagel Group, in combination with optimised IT-based processes, was the foundation of its solid and sustained profitability. Growth in the net profit was reduced by 12.2 per cent as a result of currency effects amounting to CHF 74 million. Dividend In view of the solid development of business and the sustainable high cash flow of the Kuehne + Nagel Group, the Board of Directors will propose to the Annual General Meeting of May 8, 2012, 5
6 Report of the Board of Directors the distribution of a dividend increased by 40.0 per cent to CHF 3.85 per share (previous year: CHF 2.75 per share), thus lifting the payout ratio from 55 to 77 per cent. This reflects the clear commitment of performance which is a driving force of the Kuehne + Nagel Group in all business fields. Summary and outlook In 2011, under fluctuating market conditions, the Kuehne + Nagel Group continued to pursue its strategic growth programme and reached an important milestone. The company substantially improved its competitive position, and in the growth markets of Asia and South America future-oriented investments were made in expanding the service portfolio. The successful implementation of the business plans in road logistics and the niche segment of perishables should also be underlined. The Board of Directors and the Management Board assume that the return of these investments will positively impact the development of turnover and earnings in the years to come. Efficiency increases are also expected from the upgraded IT systems in sea and airfreight, which will be brought into service in a substantially improved version in the current business year. Due to the still smouldering European debt and bank crisis uncertainties still persist with regard to the economic development in 2012. Particularly in the first half of the year, world economy is expected to perform less dynamically. In this situation Kuehne + Nagel will rely on the optimisation of its investments and its ability to act with certainty and circumspection in difficult situations and to support its customers as an indispensable partner in the creation of greater added value. The Board of Directors thanks all members of the management and all employees for their committed and valuable contributions to the Group’s development and to the results in the year 2011, which are a remarkable achievement in view of the macroeconomic situation. Thanks are also extended to all customers and partners for their confidence in Kuehne + Nagel and the good business relations the Group enjoyed with them. Yours sincerely Karl Gernandt Chairman
Page 1 and 2: NETWORK AND PRODUCT PORTFOLIO KUEHN
Page 3 and 4: EXPANSION NETWORK AND PRODUCT PORTF
Page 11 and 12: BEIJING / CHINA MUMBAI / INDIA
Page 13 and 14: CHINA Kuehne + Nagel offers an exte
Page 15 and 16: INDIA The new automotive competence
Page 17 and 18: KUEHNE + NAGEL GROUP KEY DATA CHF m
Page 19 and 20: 2 The Board of Directors KARL GERNA
Page 21: 4 Report of the Board of Directors
Page 25 and 26: 8 REPORT OF THE MANAGEMENT BOARD St
Page 27 and 28: 10 Report of the Managament Board K
Page 29 and 30: 12 Report of the Managament Board u
Page 31 and 32: 14 Status Report _ _ _ _ _ _ Income
Page 33 and 34: 16 Status Report _ _ _ _ _ _ Financ
Page 35 and 36: 18 Status Report _ _ _ _ _ _ Invest
Page 37 and 38: 20 Status Report _ _ _ _ _ _ Shareh
Page 39 and 40: 22 REPORT OF THE BUSINESS UNITS Sea
Page 41 and 42: 24 Report of the Business Units _ _
Page 51 and 52: 34 Sustainability _ _ _ _ _ _ Human
Page 53 and 54: 36 Sustainability _ _ _ _ _ _ Kuehn
Page 55 and 56: 38 Sustainability _ _ _ _ _ _ Kuehn
Page 57 and 58: 40 Sustainability _ _ _ _ _ _ Quali
Page 59 and 60: 42 Global Network KUEHNE + NAGEL WO
Page 61 and 62: 44 CORPORATE GOVERNANCE Kuehne + Na
Page 63 and 64: 46 Corporate Governance Klaus-Micha
Page 65 and 66: 48 Corporate Governance Dr. Wolfgan
Page 67 and 68: 50 Corporate Governance On invitati
Page 69 and 70: 52 Corporate Governance Management
Page 71 and 72: 54 Corporate Governance The members
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56 CONSOLIDATED FINANCIAL STATEMENT
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58 Consolidated Financial Statement
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100 Consolidated Financial Statemen
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114 SIGNIFICANT SUBSIDIARIES AND JO
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120 FINANCIAL STATEMENTS 2011 OF KU
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122 Financial Statements 2011 _ _ _
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CORPORATE TIMETABLE 2012 March 5, 2
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ANNUAL REPORT 2011 - Kuehne + Nagel

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