2013 third quarter review - panalpina · 2013 third quarter review october 25, 2013 8 air freight...

2013 Third Quarter Review

October 25, 2013 1 1


Panalpina Group

October 25, 2013


October 25, 2013 2 2

Highlights and key figures

Operating and financial review

Outlook


October 25, 2013 3 3

Growth in profitability and margins in the third quarter

Volumes and gross profit (GP)

GP of the Group in Q3 2013 up 6% yoy

Air Freight volumes up 4% yoy, ahead of market

Continued market share gains in Ocean Freight, volumes up 8% yoy

Double-digit growth in Logistics continued

Operating expenses and profit

Total operating expenses up 2% yoy on like-for-like basis primarily as a result of additional Logistics FTE, continued improvement of productivity in Air and Ocean

Q3 EBITDA/GP margin of 12.0%, up from 8.0% a year ago

Cash flow and net working capital

Cash outflow of CHF 56 million year-to-date mainly a result of dividend payment and increasing net working capital

Net working capital intensity at 2.5%


October 25, 2013 4 4

Key figures CHF million unless otherwise noted

* Antitrust fines of CHF 59.2 million (Q1 2012), provisions of CHF 12.7 million related to accrued salaries for redundancies (Q3 2012)

Note: Personnel expenses and income tax expenses in each quarter of 2012 have been restated due to the application of IAS 19 revised.

Non-recurring Non-recurring

item (NRI)* Actual Excl. NRI item (NRI)* Actual Excl. NRI

Net forwarding revenue 1'700.1 1'721.2 1'721.2 -1.2% -1.2% 5'028.1 4'928.7 4'928.7 2.0% 2.0%

Gross profit 403.1 379.3 379.3 6.3% 6.3% 1'168.0 1'106.7 1'106.7 5.5% 5.5%

Total operating expenses (354.8) (361.8) (12.7) (349.1) -1.9% 1.6% (1'037.5) (1'081.8) (71.9) (1'009.9) -4.1% 2.7%

EBITDA 48.3 17.5 (12.7) 30.2 176.0% 59.9% 130.5 24.9 (71.9) 96.8 424.1% 34.8%

in % of gross profit 12.0% 4.6% 8.0% 11.2% 2.2% 8.7%

Operating result (EBIT) 34.4 6.3 (12.7) 19.0 446.0% 81.1% 93.2 (7.2) (71.9) 64.7 44.0%

in % of gross profit 8.5% 1.7% 5.0% 8.0% -0.7% 5.8%

Consolidated profit 23.8 3.6 (7.5) 11.1 561.1% 113.5% 62.3 (20.6) (66.7) 46.1 35.0%

Earnings per share (CHF) 0.99 0.14 0.46 607.1% 2.63 -0.88 1.95 34.9%

Cash and cash equivalents (end of period) 337.3 456.9 -26.2%

Equity ratio in % (end of period) 37.2% 38.9%

Q3 2012

before NRI

Δ in %Q3 2013 Q3 2012 Δ in % YTD 2013

actual

YTD 2012

actual

YTD 2012

before NRI

The charges of USD 35 million for the settlement of the U.S. antitrust class action lawsuit (as communicated in separate media release on October 23, 2013) are not included in Q3 results but will impact Q4 results.


October 25, 2013 5 5



Outlook


October 25, 2013 6 6

539.5 574.8

335.5357.0

231.7

236.2

1'106.7

1'168.0

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

YTD 2012 YTD 2013

EMEA AMERICAS APAC

178.4 179.3 181.9 176.0 180.4 196.0 198.5

107.7 109.4 118.4108.0 113.4

122.2 121.4

78.0 74.779.0

74.072.0

80.9 83.3364.1 363.3

379.3

358.0365.8

399.1 403.1

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

EMEA AMERICAS APAC

GP growth in all Regions in the third quarter, led by EMEA Gross profit in CHF million and year-on-year growth in %

Gross profit of the Group in Q3 up 6% yoy (YTD: +6%)

Asian export volumes to Europe growing again after a weak start in Q1

Strong growth of Intra-Asia volumes

+2%

+6%

+7%

21%

30%

49%

20%

31%

49%

+6% +6%

+5% +8%

+12% +3%

+9% +9%

-8%

+5%

+1%


October 25, 2013 7 7

480.3 473.0

346.1 371.4

280.3323.6

1'106.7

1'168.0

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

YTD 2012 YTD 2013

Air Freight Ocean Freight Logistics

159.5 161.4 159.4 147.0 146.5165.8 160.8

114.6 110.4 121.1114.0 117.3

124.7 129.4

90.0 91.598.8

97.0 102.1

108.6 112.9

364.1 363.3379.3

358.0 365.9

399.1 403.1

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Air Freight Ocean Freight Logistics

Air GP improving, strong growth in Ocean and Logistics Gross profit in CHF million and year-on-year growth in %

Moderate GP growth in Air Freight in third quarter, continued volume growth above market

Solid GP growth in Ocean Freight supported by steady above market volume growth

Continued double-digit growth of Logistics business

+14% +19%

+13% +7%

+3% +1%

+15%

+7%

-2%

25%

31%

44%

28%

32%

40%

+13%

+2%

-8%

+6% +6%


October 25, 2013 8 8

Air Freight GP with moderate Q3 growth in slow environment

Continued market share gains in third quarter with above average volume growth in Consumer & Retail, Healthcare and Oil & Gas

GP per ton down vs. prior year as a result of carrier rate increases - stable vs. last quarter

Air Freight: tonnage, GP/ton (indexed, 1Q12 = 100) Air Freight: GP (CHF million), GP margin

Year-on-year

growth in %

1Q13 vs.

1Q12

2Q13 vs.

2Q12

3Q13 vs.

3Q12

9M13 vs.

9M12

Volumes (Panalpina) -3% +3% +4% +1%

Volumes (market) -2% 0% +1% 0%

GP/ton -5% 0% -3% -3%

Year-on-year

growth in %

1Q13 vs.

1Q12

2Q13 vs.

2Q12

3Q13 vs.

3Q12

9M13 vs.

9M12

Gross profit -8% +3% +1% -2%

100.0 102.6 98.9 102.696.7

105.6 103.2

100.0 98.7101.0

90.394.9

98.3 97.6

0

20

40

60

80

100

120

0

20

40

60

80

100

120

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Tons GP/ton

159.5 161.4 159.4147.0 146.5

165.8 160.8

21.3%20.3% 20.6%

18.5%

20.4%21.1% 21.5%

0%

5%

10%

15%

20%

25%

30%

0

20

40

60

80

100

120

140

160

180

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Air GP Air GP margin


October 25, 2013 9 9

Air Freight: volume development by Region Year-on-year volume growth (Panalpina) for first nine months by export market

AMERICAS:

+6%

EMEA:

-4% APAC:

+5%

Relative volumes (Panalpina) per Region

Total Group: +1%

24%

23%

41%

27%

35%

50%

0% 20% 40% 60% 80% 100% 120%


October 25, 2013 10 10

Ocean Freight with continued above-market growth

Further market share gains in Ocean Freight leading to new quarterly volume record, supported by strong volumes in Consumer & Retail, Automotive & Manufacturing, Hi-Tech and Oil & Gas

GP per TEU weaker vs. last quarter as a result of market rate volatility

Ocean Freight: TEUs, GP/TEU (indexed, 1Q12 = 100) Ocean Freight: GP (CHF million), GP margin

Year-on-year

growth in %

1Q13 vs.

1Q12

2Q13 vs.

2Q12

3Q13 vs.

3Q12

9M13 vs.

9M12

Volumes (Panalpina) +7% +5% +8% +7%

Volumes (market) +2% +2% +3% +2%

GP/TEU -4% +8% -1% +1%

Year-on-year

growth in %

1Q13 vs.

1Q12

2Q13 vs.

2Q12

3Q13 vs.

3Q12

9M13 vs.

9M12

Gross profit +2% +13% +7% +7%

100.0107.8 112.3 106.8 106.8

113.0121.4

100.0

89.494.1 93.1

95.8 96.393.0

0

20

40

60

80

100

120

0

20

40

60

80

100

120

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

TEUs GP/TEU

114.6 110.4121.1

114.0 117.3124.7 129.4

19.7%

16.8% 16.8%17.4% 17.7% 17.6% 18.0%

0%

5%

10%

15%

20%

25%

30%

0

20

40

60

80

100

120

140

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Ocean GP Ocean GP margin


October 25, 2013 11 11

Ocean Freight: volume development by Region Year-on-year volume growth (Panalpina) for first nine months by export market

AMERICAS:

+3%

EMEA:

+12% APAC:

+6%

Relative volumes (Panalpina) per Region

Total Group: +7%

24%

23%

41%

27%

35%

50%

0% 20% 40% 60% 80% 100% 120%


October 25, 2013 12 12

Logistics with further GP growth Gross profit in CHF million

Continued investments in people and software, broadening of Logistics offering into Value-Added Services

Further expansion of Warehousing & Distribution activities, particularly in Technology and Fashion

+15% +14%

90.0 91.598.8 97.0 102.1

108.6 112.9

0

10

20

30

40

50

60

70

80

90

100

110

120

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Logistics GP

280.3

323.6

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

020406080

100120140160180200220240260280300320340

YTD 2012 YTD 2013

CH

F m

illi

on

Development of Logistics gross profit

GP GP margin


October 25, 2013 13 13

Stable personnel expenses year-to-date versus prior year Operating expenses in CHF million

15‘749 15‘796 15’895 15’687 15’461 15’618 16’160 Ø FTE

Ø FTE = Full-time equivalents (quarterly average)

Total operating expenses up 2% yoy primarily as a result of ongoing investments in business and IT

Personnel expenses in Q3 slightly up due to additional FTEs (primarily Warehousing & Distribution)

Productivity in Air Freight (YTD: +12% yoy) and Ocean Freight (YTD: +4%) further improving

* Q1 2012 adjusted for antitrust fines of CHF 59.2 million. Q3/Q4 2012 each adjusted for provisions of CHF 12.7 million related to accrued salaries for redundancies.

Note: Personnel expenses in each quarter of 2012 have been restated due to the application of IAS 19 revised. The application resulted in an increase in personnel expenses of CHF 0.7 million per quarter.

3Q13 3Q12 Δ%

PExp

(adj.) 243.5 240.6 +1.2%

OOE 111.5 108.7 +2.6%

Total

(adj.) 355.0 349.3 +1.6%

YTD13 YTD12 Δ%

PExp

(adj.) 707.5 708.8 -0.2%

OOE

(adj.) 330.3 301.3 +9.6%

Total

(adj.) 1‟037.8 1‟010.1 +2.7%

PExp = Personnel expenses

OOE = Other operating expenses

233.3 234.9 240.6223.6 229.2 234.7 243.5

97.1 95.5108.7

112.9 106.6112.2

111.5

59.2 12.712.7

0

50

100

150

200

250

300

350

400

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Personnel expenses Other opex Non-recurring items*


October 25, 2013 14 14

Growth in EBITDA continued in Q3 Underlying EBITDA in CHF million*

Q3 EBITDA growth of 60% vs. prior year period (YTD: +35%)

Sequential EBITDA decline mainly due to additional FTE investments to accommodate growth in Logistics (W&D)

* Q1 2012 adjusted for antitrust fines of CHF 59.2 million. Q3/Q4 2012 each adjusted for provisions of CHF 12.7 million related to accrued salaries for redundancies.

Note: Personnel expenses in each quarter of 2012 have been restated due to the application of IAS 19 revised. The application resulted in a decrease in EBITDA of CHF 0.7 million per quarter.

+60% +35%

96.8

130.5

8.7%

11.2%

0%

2%

4%

6%

8%

10%

12%

14%

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

YTD 2012 YTD 2013

CH

F m

illi

on

Development of (underlying) Group EBITDA

Underlying EBITDA Underlying EBITDA/GP margin

33.7 32.9 30.2

21.5

30.1

52.148.3

9.3%9.1%

8.0%

6.0%

8.2%

13.1%

12.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

10

20

30

40

50

60

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

CH

F m

illi

on

Development of (underlying) Group EBITDA

Underlying EBITDA Underlying EBITDA/GP margin


October 25, 2013 15 15

* Net working capital defined as current assets net of cash and liquid instruments minus current liabilities net of interest bearing debt

** NWC intensity defined as NWC divided by gross forwarding revenue

Net working capital intensity with first signs of stabilization

(# of days) Sep 30, 2012 Jun 30, 2013 Sep 30, 2013

DSO (3-m-rolling) 45.6 47.5 45.5

DPO (3-m-rolling) 31.3 33.3 29.9

Δ (DSO – DPO) 14.3 14.2 15.6

NWC intensity at 2.5%, up vs. 1.6% a year ago and stabilizing vs. last quarter

DSO increasing as pressure from customers for longer payment terms continues

393

337

133

-70

-47

-72

Cash onDec 31, 2012

Operatingactivities

Change inNWC

Dividends Otheritems

Cash onSep 30, 2013

CHF million

22

94

131 134

168

193

204

82

153

0.3%

1.2%

1.6% 1.7%

2.2%

2.4%2.5%

1.1%

1.9%

0

20

40

60

80

100

120

140

160

180

200

220

0%

1%

2%

3%

4%

5%

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

CH

F m

illi

on

NWC * Adj. NWC NWC intensity (%) ** Adj. NWC intensity (%)

Current portion

of provisions for

antitrust fines


October 25, 2013 16 16



Outlook


October 25, 2013 17 17

Outlook for 2013

Logistics Ocean Freight Air Freight

Old: 0%

New: 1%

Volume growth (market)

Volume growth (Panalpina)

Overall: profitable growth

Sales: focus on growth of strategic trade lanes and balancing the customer portfolio

Costs: continued focus on cost management

Investments: selective investments in business platform

Priorities

Old: 2 – 3%

New: 3%

Old: ≥ market

New: > market

Old: > market

New: > market


October 25, 2013 18 18

Panalpina Capital Markets Day on November 20, 2013

For more information go to www.panalpina.com/CMD2013


October 25, 2013 19 19

Disclaimer

Investing in the shares of Panalpina World Transport Holding Ltd involves risks. Prospective investors are strongly requested to

consult their investment advisors and tax advisors prior to investing in shares of Panalpina World Transport Holding Ltd.

This document contains forward-looking statements which involve risks and uncertainties. These statements may be identified by

such words as “may”, “plans”, “expects”, “believes” and similar expressions, or by their context. These statements are made on the

basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ

materially from those described in these statements. No obligation is assumed to update any forward-looking statements. Potential

risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and

pricing pressures and regulatory developments.

The information contained in this document has not been independently verified and no representation or warranty, express or

implied, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or

opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete or

condensed, and it may not contain all material information concerning the Panalpina Group. None of Panalpina World Transport

Holding Ltd or their respective affiliates shall have any liability whatsoever for any loss whatsoever arising from any use of this

document, or its content, or otherwise arising in connection with this document.

This document does not constitute, or form part of, an offer to sell or a solicitation of an offer to purchase any shares and neither it

nor any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This

information does neither constitute an offer to buy shares of Panalpina World Transport Holding Ltd nor a prospectus within the

meaning of the applicable Swiss law.


October 25, 2013 20 20

Appendix

Panalpina Group


October 25, 2013 21 21

Income statement Figures in CHF million

* Antitrust fines of CHF 59.2 million CHF 59.2 million (Q1 2012), provisions of CHF 12.7 million related to accrued salaries for redundancies (Q3 2012)

Note: Personnel expenses and income tax expenses in each quarter of 2012 have been restated due to the application of IAS 19 revised.

Non-recurring Non-recurring

item (NRI)* Actual Excl. NRI item (NRI)* Actual Excl. NRI

Net forwarding revenue 1'700.1 1'721.2 1'721.2 -1.2% -1.2% 5'028.1 4'928.7 4'928.7 2.0% 2.0%

Forwarding expenses (1'297.0) (1'341.9) (1'341.9) (3'860.1) (3'822.0) (3'822.0)

Gross profit 403.1 379.3 379.3 6.3% 6.3% 1'168.0 1'106.7 1'106.7 5.5% 5.5%

in % of net forwarding revenue 23.7% 22.0% 22.0% 23.2% 22.5% 22.5%

Personnel expenses (243.5) (253.3) (12.7) (240.6) -3.9% 1.2% (707.5) (721.5) (12.7) (708.8) -1.9% -0.2%

in % of gross profit (PGP) 60.4% 66.8% 63.4% 60.6% 65.2% 64.0%

Other operating expenses (111.5) (108.7) (108.7) 2.6% 2.6% (330.3) (360.5) (59.2) (301.3) -8.4% 9.6%

in % of gross profit (OGP) 27.7% 28.7% 28.7% 28.3% 32.6% 27.2%

Gains (losses) on sales of non-current assets 0.2 0.2 0.2 0.3 0.2 0.2

Total operating expenses (354.8) (361.8) (12.7) (349.1) -1.9% 1.6% (1'037.5) (1'081.8) (71.9) (1'009.9) -4.1% 2.7%

EBITDA 48.3 17.5 (12.7) 30.2 176.0% 59.9% 130.5 24.9 (71.9) 96.8 424.1% 34.8%

in % of gross profit 12.0% 4.6% 8.0% 11.2% 2.2% 8.7%

Depreciation of property, plant and equipment (8.4) (7.9) (7.9) (25.6) (22.5) (22.5)

Amortization of intangible assets (5.5) (3.3) (3.3) (11.7) (9.6) (9.6)

Operating result (EBIT) 34.4 6.3 (12.7) 19.0 446.0% 81.1% 93.2 (7.2) (71.9) 64.7 44.0%

in % of gross profit 8.5% 1.7% 5.0% 8.0% -0.7% 5.8%

FX result (2.6) (0.1) (0.1) (8.3) (4.5) (4.5)

Financial result (0.1) (0.2) (0.2) (2.0) 5.0 5.0

Earnings before taxes (EBT) 31.7 6.0 (12.7) 18.7 428.3% 69.5% 82.9 (6.7) (71.9) 65.2 27.1%

Income tax expenses (7.9) (2.4) (7.6) (20.6) (13.9) (19.1)

% of EBT 24.9% 40.4% 40.4% 24.8% -207.5% 29.2%

Consolidated profit 23.8 3.6 (7.5) 11.1 561.1% 113.5% 62.3 (20.6) (66.7) 46.1 35.0%

Earnings per share (CHF) 0.99 0.14 0.46 607.1% 2.63 -0.88 1.95 34.9%

Q3 2012

before NRI

Δ in %Q3 2013 Q3 2012 Δ in % YTD 2013

actual

YTD 2012

actual

YTD 2012

before NRI


October 25, 2013 22 22

Balance sheet Figures in CHF million

Note: The items „Other long-term liabilities‟ and „Reserves, treasury shares‟ in 2012 have been restated due to the application of IAS 19 revised.

CHF %

Cash and cash equivalents, other current financial assets 337.3 393.1 -55.8 -14.2%

Trade receivables, unbilled forwarding services 1'168.4 1'118.2 50.2 4.5%

Other current assets 134.4 84.0 50.4 60.0%

Property, plant and equipment 123.1 130.2 -7.1 -5.5%

Intangible assets 137.5 134.1 3.4 2.5%

Other non-current assets 99.8 97.4 2.4 2.5%

Total assets 2'000.5 1'957.0 43.5 2.2%

Short-term borrowings 3.9 1.6 2.3 143.8%

Trade payables, accrued cost of services 782.3 773.1 9.2 1.2%

Other current liabilities 314.2 293.3 20.9 7.1%

Long-term borrowings 0.3 0.3 0.0 0.0%

Other long-term liabilities 156.0 144.9 11.1 7.7%

Total liabilities 1'256.7 1'213.2 43.5 3.6%

Share capital 2.4 2.4 0.0 0.0%

Reserves, treasury shares 729.4 732.2 -2.8 -0.4%

Non-controlling interests 12.0 9.2 2.8 30.4%

Total equity 743.8 743.8 0.0 0.0%

Total equity and liabilities 2'000.5 1'957.0 43.5 2.2%

Net cash 333.1 391.2 -58.1 -14.9%

30-Sep-13 31-Dec-12Change


October 25, 2013 23 23

Cash flow Figures in CHF million

*

* Excluding income taxes paid and short-term provisions

Cash flow before changes in working capital 102.8 (10.4) 163.5 27.0

Changes in working capital (72.3) (8.5) (104.6) (48.2)

Cash from operations 30.5 (18.9) 58.9 (21.2)

Interest and income taxes paid (11.5) (13.3) (28.2) (29.3)

Net cash from operating activities 19.0 (32.2) 30.7 (50.5)

Net cash from investing activities (11.1) (25.4) (38.2) 26.9

Free cash flow (FCF) 7.9 (57.6) (7.5) (23.6)

FCF adj. for repayments of loans and other financial assets 6.0 (58.7) (11.4) (107.4)

Net cash used in financing activities 5.4 (45.7) (40.6) (96.6)

Effect of exchange rate changes (8.8) 2.3 (7.7) 3.5

Cash and cash equivalents at beginning of period 332.7 557.9 393.1 573.6

Net increase (decrease) in cash and cash equivalents 4.5 (101.0) (55.8) (116.7)

Cash and cash equivalents at end of period 337.2 456.9 337.3 456.9

Q3 2013 Q3 2012 YTD 2013 YTD 2012

2013 third quarter review - panalpina · 2013 third quarter review october 25, 2013 8 air freight...

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