Kuehne + Nagel Remain Resilient in Challenging Market

Kuehne + Nagel is the second-largest third-party logistics provider globally, with an estimated 5% share of a highly fragmented market. As a freight forwarder, KN contracts with airlines and ocean carriers for cargo space and then fills that capacity with customers' freight. KN’s strong suit lies in sea freight, where it is the largest operator globally and where its margins are the highest across the four divisions in the group. The company has indicated its willingness to reduce its reliance on the sea freight division by expanding the other businesses in the group, which we believe will strengthen the client offering and ultimately KN's network. Restructuring of the overland and contract logistics businesses has resulted in improved margins and increasing EBIT contributions. We believe there is further room for improvement in these businesses.