Panalpina Annual Report 2011

Panalpina’s headquarters closer to where decisions are
made by its customer base, facilitating exploitation of
regional and local growth opportunities in the various markets
where Panalpina operates.
Overall, Group management expects world trade and
global outsourcing to expand further in the years to come,
albeit with a bias towards the emerging economies –
particularly in Asia, Latin America and Africa, which will
continue to gain in relative importance. With its global and
asset-light network, coupled with the ability to react swiftly
and offer its customers first-class, tailor-made, end-toend
supply chain 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)
With the Swiss franc as its reporting currency, Panalpina’s
financial results in 2011 were massively distorted by the
strength of the Swiss franc versus all foreign currencies
relevant to the Company. On average, the euro and the
US dollar lost approximately 11 % and 15 %, respectively, in
value against the Swiss franc during the reporting year.
Net forwarding revenue amounted to CHF 6,500 million,
a reduction of 9 % compared to the CHF 7,164 million the
year before, yet in local currencies, NFR advanced 2 %
versus the prior year. This slight increase can be attributed
to a variety of factors, including a balanced volume effect
(more shipments handled in Ocean Freight and Logistics,
fewer shipments handled in Air Freight) as well as factors
over which Panalpina has limited influence, such as a significant
increase in oil prices, resulting in higher fuel surcharges,
which were counterbalanced by sharply lower average
freight rates prevailing in the market caused by significant
overcapacities.
At regional level, net forwarding revenue declined in all
four reporting regions due to a variety of factors. In Europe,
Middle East, Africa and CIS (EMEA), NFR decreased 13 %
to CHF 3,171 million. This region recorded a material adverse
translation impact from the weak euro, and was also
affected by the import weakness of many European economies
and falling freight rates. EMEA remains Panalpina’s
largest region in revenue terms, contributing to almost half
of the Group’s turnover.
In North America, NFR fell by 10 % to CHF 1,270 million, a
large part of which can be attributed to the depreciating
Report of the Executive Board
US dollar. Moreover, persistently low consumer confidence
resulted in lower import volumes.
Compared to 2010, Panalpina’s NFR in 2011 in Central and
South America declined 1 % to CHF 834 million. The Group
recorded strong double-digit volume growth in this region
on the import side, while the currency translation effect
and falling freight rates both acted as a drag on turnover.
The Asia Pacific region saw a decline in NFR of 4 % to
CHF 1,225 million. Also here, the translation of locally generated
turnover into Swiss francs along with severely
depressed freight rates, particularly on the Asia-Europe
route, overshadowed double-digit volume growth rates on
lanes such as Asia to Latin America and Intra Asia.
In 2011, the Panalpina Group generated 49 % of its net forwarding
revenue in Europe, Middle East, Africa and CIS,
19 % each in North America and Asia Pacific and 13 % in
Central and South America.
Net forwarding revenue per region
2011 2010
in million CHF
4,000
3,000
2,000
1,000
0
3,171
3,640
Europe, Middle East,
Africa and CIS
1,270
1,409
North
America
834
845
Central and
South America
Net forwarding revenue per region (2011)
Europe, Middle East, Africa and CIS
North America
Central and South America
19%
13%
49%
Asia Pacific 19%
1,225
1,270
Asia Pacific
On a divisional level, the oversupply of carrier capacity,
which was prevalent for a large part of the year, led to
a substantial drop of carrier freight rates, which – together
with the strength of the Swiss franc – adversely impacted
the Group’s NFR in Air Freight and Ocean Freight, due to
the pass-through character of freight rates for an asset-light
service provider like Panalpina. These impacts were only
partially mitigated by increasing oil prices, which in 2011 on
average rose more than 40 % above 2010 levels, resulting
Panalpina Annual Report 2011
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