At the premises with a handling and storage capacity of 5,600 sqm, Kuehne + Nagel’s services will cover the inbound receipt of goods by sea and air, label scanning, quality and quantity checks, pick-and-pack operations, sales-ready preparation as well as reverse logistics for the entire range of Louis Vuitton leather goods and accessories. In addition, Kuehne + Nagel will provide value added services, such as pre-wrapping and care label tagging. A dedicated competence team of around 20 experts will support Louis Vuitton on a 24/7-basis with the most stringent standards in security and operations.

Dave Goualier, Manager of Logistics, Supply Chain & Quality for Louis Vuitton Japan, comments, “The sophisticated nature of our supply chain requires a logistics provider to be capable of maintaining a reliable balance between efficiency, flexibility and quality. The showcase operations deployed in our new state-of-the-art distribution centre underlines the competence of Kuehne + Nagel as a logistics service provider.”

“We are pleased to have been able to deliver significant improvements to Louis Vuitton’s supply chain. With our innovative portfolio of IT-based integrated services, our goal is to support the retail giant in meeting its existing and future logistics requirements,” said Holger Beyer, National Manager of Kuehne + Nagel Japan.

Kuehne + Nagel Group

CHF million

2007*

2008

2009

Turnover

20,975

21,599

17,406

Gross profit

6,014

6,253

5,863

Operational result (EBITDA)

1,019

1,020

885

Net earnings

536

585

467

Kuhne + Nagel International AG

CHF

Dividend per share

1.90

2.30

2.30**

* Restated for comparison purposes.

** Proposal to the Annual General Meeting.

Datasheets

Consolidated Financial Statements 2009

Karl Gernandt, Executive Vice Chairman of the Board of Directors, said “The good performance of the Kuehne + Nagel Group in the crisis year of 2009 was due to its operational strengths and the timely and consistent execution of its strict cost management and commitment to market share expansion. Thus, we were able to considerably strengthen our global market position. In addition, we took advantage of the crisis to further improve organisational and operational efficiencies in line with our profitability objectives.”

Economic environment
As a result of the economic crisis, in the first half-year 2009 the logistics industry suffered unprecedented declines in turnover and volumes, both in international and national freight forwarding and in contract logistics. This development led to a reduction of transport and logistics capacities. In the second half of the year, the economic contraction began to ease and logistics demand started to recover.

Market share gains and strong operational performance
Kuehne + Nagel’s anti-cyclical investments in sales and the accelerated development of industry-specific solutions led to market share gains in all business fields. The increase of EBITDA margin from 4.7 to 5.1 per cent was due to the early and consistent alignment of cost structures to the reduced transportation volumes, significantly increased productivity and continued process optimisation.

Extraordinary provision
As already communicated in October 2007, international freight forwarders including Kuehne + Nagel have been subject to investigations by various competition authorities. Based on the negotiations with the US Department of Justice (DoJ), Kuehne + Nagel expects that it will be possible to reach a settlement. The company has accordingly set aside a provision of CHF 35 million to cover all possible costs connected with the case. The provision affects the business field seafreight with CHF 10 million and airfreight with CHF 25 million respectively.

Seafreight
In 2009 the seafreight business was caught in the down-current of world recession. Worldwide volumes fell for the first time in global containerisa­tion history. Kuehne + Nagel, however, managed to win market share against the trend in many trade lanes and strengthened its position as global market leader. Important factors were its sophisticated, value-creating product portfolio, customer focussed IT solutions and increased group-wide sales activities. Kuehne + Nagel’s 4.6 per cent volume decline was remarkably moderate compared with the approx. 12 per cent overall market decline in seafreight volumes. In comparison with the previous year, EBITDA margin increased from 4.6 to 5.0 per cent, while the operational result decreased by 17.9 per cent.

Airfreight
The global airfreight market experienced an unprecedented slump in demand beginning in the fourth quarter 2008, a situation that did not stabilise until July 2009. For the whole year, the airfreight market declined by 12 per cent. To counteract the effects of the recession, Kuehne + Nagel also increased its sales activities in this business field and con­centrated on marketing its highly specialised services for niche segments. Due to these efforts, the 9.2 per cent volume decline was less than the overall market average. Thanks to continued market share gains, Kuehne + Nagel advanced to the third place in the ranking of global airfreight forwarders. At 5.6 per cent (previous year: 5.7 per cent) EBITDA margin remained stable, the operational result decreased by 28.1 per cent.

Road & Rail Logistics
Kuehne + Nagel was able to partly compensate for the substantial recession-induced fall in European road transport volumes through market share gains in fields of full truckload (FTL) and less than truckload (LTL), along with solid business performances in Germany and France. The French Alloin Group, acquired by Kuehne + Nagel in 2009 and whose integration progressed well during the year, made an important contribution to the result development and the better utilisation of the European overland network. Compared with the previous year, EBITDA margin increased from 0.8 to 2.1 per cent and the operational result improved by 126.1 per cent.

Growth impulses and synergies are expected from the consolidation of the Road & Rail Logistics and Contract Logistics business units under one management responsibility, a measure in effect since January 1, 2010.

Contract Logistics
Thanks to well-filled order books for industry-specific solutions and strict cost management Kuehne + Nagel achieved stable contract logistics results despite significant demand fluctuations, regional variations in warehouse capacity utilisation and increased price pressure. The Lead Logistics Solutions business segment proved a growth driver as, especially in a difficult economic environment, the efficient management of complex supply chains gained in importance. EBITDA margin remained at the previous year’s level of 4.6 per cent, while the operational result decreased by 6.9 per cent.

Real Estate
Kuehne + Nagel optimised its portfolio consisting of properties and leasehold premises. At the end of 2009, after commissioning new logistics properties in Germany, France, Canada and the United Arab Emirates, Kuehne + Nagel’s freehold portfolio comprised 123 logistics facilities and office buildings in 21 countries.

Insurance Broker
The Nacora Group, operating in the global insurance broker business, delivered satisfactory results in 2009 despite reduced business volumes. Its specialised cargo insurance expertise, customer orientation and service quality contributed to the favourable business development.

Turnover
The Kuehne + Nagel Group posted an invoiced turnover of CHF 17,406 million, a 19.4 per cent decrease compared with the previous year (includ­­ing negative currency effects of 5.5 per cent). Acquisitions had a positive effect of CHF 650 million.

The largest turnover decreases were recorded in the Americas (25.0 per cent), the Asia-Pacific region (22.6 per cent) and in Europe (18.5 per cent). Kuehne + Nagel’s organisations in the Middle East, Central Asia and Africa experienced the least impact, turnover decreased only by 6.1 per cent.

Gross profit
Gross profit – in the logistics and forwarding industry a better perfor­mance indicator than turnover – declined by just 6.2 per cent despite a negative currency effect of 7.5 per cent. Acquisitions had a positive effect of CHF 382 million.

In the Middle East, Central Asia and Africa gross profit decreased by 3.8 per cent, in Europe by 4.2 per cent and in Asia-Pacific by 11.5 per cent. In the Americas, gross profit decreased by 14.6 per cent.

Operational result (EBITDA)
Earnings before interest, tax, depreciation and amortisation of goodwill and other intangible assets (EBITDA) decreased by CHF 135 million (13.2 per cent) compared with the previous year. This includes negative effects of CHF 53 million from currency exchange rates and CHF 35 million related to the competition investigations. Acquisitions positively contributed CHF 40 million. Regionally, the biggest contribution came from Europe (CHF 579 million resp. 65.4 per cent), followed by the Asia-Pacific region (CHF 140 million resp. 15.8 per cent), the Americas (CHF 128 million resp. 14.5 per cent) and Middle East, Central Asia and Africa (CHF 38 million resp. 4.3 per cent).

Dividend
Despite the difficult global economic environment, the Kuehne + Nagel Group again has achieved a respectable result. Therefore, the Board of Directors will propose to the Annual General Meeting of May 18, 2010 the distribution of a dividend at the same level as 2008 of CHF 2.30 per share.

Outlook
The Kuehne + Nagel Group is emerging from the crisis year 2009 stronger than before and is well positioned for the expected economic upswing. As there is some uncertainty regarding a lasting global economic recovery, the Group will adhere to its strategy of market share expansion combined with strict cost management.

Chief Executive Officer Reinhard Lange said: “Our aim for 2010 is profit­able growth above market average in all business units. In addition, we will further enhance our product offering, develop new areas of value creation and increase our service quality to make Kuehne + Nagel an even more attractive logistics partner for companies in trade and industry.”

On behalf of Fujifilm Kuehne + Nagel is also responsible for warehouse management, customs brokerage and value-added services such as sticking, labelling and plate cutting. A specific focus lies on high-value goods and hazardous substances, for which a dedicated cold room area of 300 sqm has been built for Fujifilm. In order to communicate with the customer’s IT systems, Kuehne + Nagel has implemented special interfaces to its global warehouse management system.

Aad Goedendorp, Manager Corporate Logistics of Fujifilm Europe, states: “Kuehne + Nagel has been selected above others, because of their strong presence in Eastern Europe, their cost-effective operations and their IT strength.”

Tobias Jerschke, Managing Director of Kuehne + Nagel Poland, said: “Both the high-tech industry and the Eastern European markets are among the strategic focus sectors of Kuehne + Nagel. Being one of the world’s leading providers of integrated contract logistics services, we are convinced that the Fujifilm project will lead to a promising joint development potential for both partners.”

About Fujifilm
Fujifilm Corporation operates the imaging and information businesses previously operated by Fuji Photo Film. Co. Ltd. (founded 1934), which became Fujifilm Holdings Corporation in 2006.

For futher information, please visit www.fujifilm.com

KN Drinks Logistics’ Hams Hall facility in the Midlands will offer storage for approximately one million cases of wine which will be delivered annually to both on- and off-trade customers via the KN Drinks Logistics primary and secondary distribution networks.

German Lledo, Finance & Logistics Director at Concha Y Toro UK, explains, “We chose to develop our supply chain operations in the UK with KN Drinks Logistics because it is crucial to us to be able to offer a flexible, highly reliable and seamless service to our customers in a very competitive market.”

Phil Newton, Business Development Director for KN Drinks Logistics, is optimistic about the potential for growth in this sector. He comments, “As the largest seafreight forwarder in the world, Kuehne + Nagel has been a significant player in the wines and spirits market for a number of years. We are therefore ideally positioned to offer our contract logistics expertise to this sector, which continues to be a strategic target for our organisation.”

About Concha y Toro SA
Founded in 1883, Concha y Toro SA is Latin America’s leading producer of premium branded wine, currently exporting to 131 countries worldwide. Uniquely, it owns around 8,800 hectares of prime vineyards, located all over Chile and Argentina, from where its wholly-owned winery Bodegas Trivento operates. This vineyard ownership allows the company to secure the highest quality grapes for its wine production. Concha y Toro’s portfolio includes a wide range of successful brands at every price point, from the top of the range Don Melchor and Almaviva to the flagship brand Casillero del Diablo and innovative stand-alone brands such as Palo Alto and Maycas del Limarí.

About Concha y Toro UK
Established in 2001, Concha y Toro UK is the company’s wholly-owned distributor dedicated to the UK market. Based in Oxford, with 38 employees across sales, marketing and logistics, Concha y Toro UK distributes a wide portfolio of products to every sector of the UK retail network, from multiple grocery, cash and carry to specialists, independents and the on-trade.

Under the agreement, KN Hotel Logistics, the special services division of Kuehne + Nagel providing integrated supply chain management solutions to the world’s luxury hospitality industry, will be responsible for on-time delivery and installation of all furniture (FF&E) for the hotel. The project team is gradually handing over the guest rooms to the operator, working its way up from the ground floor based on a tight time line. Kuehne + Nagel’s tailor-made IT solution which supports the FF&E installation results in better planning accuracy and reduced administra­tional effort.

“We brought together some of our best FF&E experts from our teams in America, Europe and Asia taking over the warehousing and critical last-mile delivery for this historic hotel opening project,” commented Achim Glass, Kuehne + Nagel’s Vice President Global Hotel Logistics. “To meet the ambitious deadline, we have implemented a three-shift operations, working six days a week, 24 hours a day. Winning this huge contract is proof of the trust placed in us by a globally leading resort developer and demonstrates our strong capacity to mange the material flow on busy project sites and deliver a turn-key solution to our customer.”

The Statement of Objections follows the investigations initiated by the European Commission at Kuehne + Nagel premises in October 2007 and subsequent questionnaires. A Statement of Objections is a procedural document whereby the European Commission communicates its preliminary view of a possible infringement of EU competition law. Addressees are allowed to present arguments in response.

Kuehne + Nagel will examine the Statement of Objections, will respond in due course and reserves its right to exhaust legal remedies.

Kuehne + Nagel has been active in Belarus since 1996 with repre­sen­ta­tive offices in Minsk and in Brest and is providing services to an increasing number of customers, particularly from the automotive, pharmaceutical, chemical, retail, wood production and power engineering industries. Apart from FTL, LTL and weekly groupage services between Belarus, Europe, Russia and Kazakhstan, Kuehne + Nagel also offers global airfreight transportation through Minsk airport as well as LCL and FCL services via the ports of Klaipeda and Riga.

Elena Dushnjak, Managing Director of Kuehne + Nagel Belarus, says: “Belarus is an attractive region for large international companies from Europe and Asia doing business in Eastern Europe. Our integrated logistics services combined with our proven knowledge of the local market can support them in improving supply chain efficiency and reliability."

Contact details Kuehne + Nagel Belarus

Kuehne & Nagel FPTFUE
Nezavisimosty av., 169–612
Business Centre "XXI Century"
220114 Minsk, Belarus

Phone +375 17 218 11 61
Fax +375 17 218 11 62

Another important element of this integrated logistics offering is the entire distribution of stock via overnight shipments by Kuehne + Nagel’s auto­motive distribution network throughout Europe, covering regions such as Ireland, Scandinavia, Benelux and Portugal among others. The annual flow of nine million order lines, ranging from small components to entire engine blocks, totals to well over 60,000 tons of outgoing cargo.

Under the contract, Kuehne + Nagel will introduce a set of enhance­ments, such as RFID and pick-by-voice technologies. Restructuring measures will also be implemented in order to create an even more efficient and responsive supply chain for IVECO’s spare parts division on the basis of the continuous improvement culture of both companies.

“IVECO Customer Service confirms its partnership with Kuehne + Nagel as a key leverage to further improve customer satisfaction and parts business profitability,” says Enzo Gioachin, IVECO’s Senior Vice President in charge of Customer Service. “Kuehne + Nagel’s quality improvement three-year plan will support IVECO in strengthening our position in an increasingly competitive aftersales market.”

“Kuehne + Nagel and IVECO look back on nine years of successful cooperation, and we are honoured to be chosen again by IVECO as their preferred logistics partner in Europe, especially under the current circum­stances of a very competitive market environment,” says Ruggero Poli, National Manager of Kuehne + Nagel Italy.

About IVECO
IVECO designs, manufactures, and markets a broad range of light, medium and heavy commercial vehicles, off-road trucks, city and intercity buses and coaches as well as special vehicles for applications such as fire fighting, off road missions, defence and civil protection. IVECO employs over 27,000 people and runs 27 production units in 16 countries in the world using excellent technologies developed in six research centres. Besides Europe, the company operates in China, Russia, Australia and Latin America. More than 6,000 service outlets in over 100 countries guarantee technical support wherever in the world an IVECO vehicle is at work.

Further information can be found at www.iveco.com

Kuehne + Nagel will support Roche Chile in optimizing its distribution processes, improving the performance of the 2,000 sqm logistics ware­house in Macul, Santiago, and will be responsible for the distribution to hospitals, clinics and pharmacy distribution centres throughout the country.

“Taking over last-mile delivery services for Roche in Chile is proof of the trust placed in us by a globally leading healthcare company and demonstrates our strong capacity to optimize processes and add value enabling the customer to focus on its core business,” commented Ingo Goldhammer, Managing Director of Kuehne + Nagel Chile. “We are committed to further developing and investing in our integrated solutions for the pharmaceutical and healthcare industry.”

René Delsin, General Manager of Roche Chile, said, “Roche is an innovative healthcare company, and this deal is part of our strategy to improve our focus on core activities locally. It will allow us to dedicate more attention to demand generation, without losing the quality of our current distribution in Chile. Working with Kuehne + Nagel, a world-class logistics service provider, we will also have the possibility to incorporate new technologies, explore synergies and further integrate our logistics and distribution processes, improving our efficiency and reducing inventories.”

About Roche
Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world’s largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnostics and a pioneer in diabetes management. Roche’s personalized healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2008, Roche had over 80,000 employees worldwide and invested almost 9 billion Swiss francs in R&D.

The company has had operations in Chile for over 38 years. It employs around 250 people throughout the country.

Further information can be found at www.roche.com

During a three-month implementation phase, a dedicated team of auto­motive logistics experts from Kuehne + Nagel will support BMW in pro­cess planning, value creation flow analyses and improvement initiatives in close collaboration with the customer in order to ensure a smooth transition for January 1, 2010.

“We are currently working for BMW at ten locations in five countries,” says Jens Wollesen, member of the Management Board of Kuehne + Nagel Germany. “We are very pleased to have now also been entrusted with this challenging logistics project at the Leipzig site, one of the world’s most modern automobile production facilities. This is a further highlight in the successful development of our automotive-related contract logistics activities.”