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1. Company Snapshot

1.a. Company Description

Kuehne + Nagel International AG, together with its subsidiaries, provides integrated logistics services worldwide.The company operates through Sea Logistics, Air Logistics, Road Logistics, and Contract Logistics segments.It provides less-than-container load, reefer and project logistics, cargo insurance, full container shipping solutions, and customs clearance services.


In addition, the company offers time-critical solutions, sea-air and time-defined products, airside and charter services, and time-critical solutions.Further, it provides aftermarket, production, and E commerce logistics, and distribution, packaging, process solutions.In addition, the company offers supply chain consulting and order management services.


It serves aerospace, automotive, mobility, consumer, healthcare, high-tech, industrial, and perishables industries.The company was founded in 1890 and is based in Schindellegi, Switzerland.Kuehne + Nagel International AG is a subsidiary of Kuehne Holding AG.

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1.b. Last Insights on KNIN

Kuehne + Nagel International AG's recent performance was positively driven by increasing interest in global trade and logistics, fueled by the ongoing Iran war and advancements in AI, which are expected to double profits for freight leaders. The company's potential for growth is being assessed by investors, with a focus on its cash flow. Although the recent earnings report showed a 17% drop in recurring earnings before interest and tax, analysts see opportunities for the company to benefit from emerging trends.

1.c. Company Highlights

2. Kuehne + Nagel's FY2025 Results: Navigating Yield Pressure and Strategic Investments

Kuehne + Nagel reported a decline in underlying group EBIT by 14% and group EPS by 25% year-over-year, primarily due to yield pressure in Sea Logistics. The company's combined sea and air conversion rate was 28%, excluding non-recurring items. The actual EPS came out at 1.3, lower than estimates of 1.7. Free cash conversion on a full-year basis was 86%, with a strong Q4 performance of 147%. The financial performance was impacted by yield pressure, but the company maintained a strong cash conversion.

Publication Date: Mar -04

📋 Highlights
  • EBIT & EPS Decline:: Underlying group EBIT fell by 14% and EPS by 25% YoY due to Sea Logistics yield pressure, with Q4 free cash conversion at 147%.
  • Sea Logistics Stabilization:: Volumes flat YoY, EBIT reached CHF 106 million excluding non-recurring items, with stable gross profit per TEU in Q4.
  • Cost Savings & Guidance:: Cost reduction program targets CHF 200M annual savings, contributing to 2026 recurring EBIT guidance of CHF 1.2-1.4B.
  • Air & Contract Logistics Growth:: Air Logistics EBIT at CHF 132M (excluding non-recurring), Contract Logistics achieved record Q4 EBIT of CHF 78M (20% YoY growth).
  • AI & Strategic Focus:: Proprietary IT platform supports AI-driven productivity gains, while SMEs comprise 50% of Sea Logistics volumes (1.6x more profitable average).

Segment Performance

In Sea Logistics, volume was flat year-over-year, while yields stabilized after a period of pressure. Air Logistics saw a 7% volume growth in Q4, with average air yields increasing by 8% quarter-over-quarter. Road Logistics showed signs of demand recovery in Europe, with net turnover growth of 6% in Q4, excluding currency effects. Contract Logistics produced a record EBIT of CHF 78 million in Q4, reflecting 20% year-over-year EBIT growth. The company's diversified business segments helped mitigate the impact of yield pressure.

Cost Savings and AI Investments

The company has completed the implementation of its cost reduction program, targeting annual gross savings of at least CHF 200 million. The CEO, Stefan Paul, views AI as an opportunity, not a threat, citing their proprietary IT platform, clean data, and workflow ownership as key advantages. The company expects to see material productivity gains from AI in 2027 and beyond, with current live use cases showing a significant impact. As Stefan Paul noted, "AI will bring productivity gains, and we plan to invest in our people to ensure successful AI deployment."

Outlook and Valuation

For 2026, Kuehne + Nagel expects recurring group EBIT in the range of CHF 1.2 billion to CHF 1.4 billion, with a proposed dividend distribution of CHF 6 per share. Analysts estimate next year's revenue growth at 2.9%. The company's valuation metrics, such as a P/E Ratio of 20.9 and an EV/EBITDA of 10.34, indicate a reasonable valuation. The Dividend Yield of 4.51% and Free Cash Flow Yield of 6.69% are also attractive. The Net Debt / EBITDA ratio is 1.12, indicating a manageable debt level.

Growth Prospects

The company sees strong demand in aerospace, healthcare, pharma, hi-tech, semicon, and hyperscalers. The hyperscaler business within Air Logistics division shows significant growth potential, with around 50% of major hyperscalers having a decent business with the company. The company plans to make investments to accelerate this business towards 2030. With a focus on growing in areas like hyperscalers and geographies where they don't currently have 100% coverage, Kuehne + Nagel is well-positioned for future growth.

3. NewsRoom

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Iran war and AI advances are creating winners and losers among transport stocks

Mar -25

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Assessing Kuehne + Nagel International’s Valuation After Mixed Short And Long Term Returns

Mar -04

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Kuehne + Nagel Reports Sharp Drop in Earnings Amid Deteriorating Environment

Mar -03

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Expeditors International (EXPD) Moves 4.2% Higher: Will This Strength Last?

Feb -16

Source: zacks.com

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Is Kuehne + Nagel International (SWX:KNIN) Pricing Reflecting Its Cash Flow Potential Today

Jan -31

Source:

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Are Transportation Stocks Lagging Deutsche Lufthansa (DLAKY) This Year?

Jan -23

Source:

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KHNGY or CHRW: Which Is the Better Value Stock Right Now?

Jan -12

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Maersk leans into logistics with new North American chief

Dec -30

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.30%)

6. Segments

Air Logistics

Expected Growth: None%

None

Sea Logistics

Expected Growth: None%

None

Road Logistics

Expected Growth: 2.3%

The rising importance of regional and domestic trade, as well as the increasing need for just-in-time delivery, will drive growth in road logistics services.

Contract Logistics

Expected Growth: 2.3%

The increasing need for supply chain optimization and the growing demand for customized logistics solutions will drive growth in contract logistics services.</li> <li><b>Eliminations</b>: Elimination of intersegment revenues and transactions between Kuehne + Nagel's business segments. — <i>Expected Growth: 2.3%</i> — <i>Rationale: The eliminations segment is expected to grow in line with the overall growth of the company's business segments.

Eliminations

Expected Growth: None%

None

7. Detailed Products

Sea Freight

Kuehne + Nagel's Sea Freight services provide customized ocean freight solutions for import and export cargo, including full container load (FCL), less than container load (LCL), and project cargo.

Air Freight

Kuehne + Nagel's Air Freight services offer fast and flexible air cargo solutions for time-critical shipments, including express, economy, and charter flights.

Overland

Kuehne + Nagel's Overland services provide customized road and rail transportation solutions for domestic and international shipments, including full truckload (FTL), less than truckload (LTL), and intermodal services.

Contract Logistics

Kuehne + Nagel's Contract Logistics services offer customized warehousing, distribution, and value-added services for businesses, including inventory management, order fulfillment, and supply chain optimization.

Integrated Logistics

Kuehne + Nagel's Integrated Logistics services provide end-to-end supply chain management solutions, including transportation, warehousing, and distribution, for businesses with complex logistics needs.

8. Kuehne + Nagel International AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Kuehne + Nagel International AG is moderate due to the presence of alternative logistics and transportation services.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major customers in the industry, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's large scale of operations and its ability to negotiate better prices with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the logistics and transportation industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several major players in the industry, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 17.95%
Debt Cost 3.95%
Equity Weight 82.05%
Equity Cost 8.26%
WACC 7.49%
Leverage 21.88%

11. Quality Control: Kuehne + Nagel International AG passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Vinci

A-Score: 6.7/10

Value: 6.3

Growth: 6.1

Quality: 4.7

Yield: 6.9

Momentum: 7.0

Volatility: 9.0

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Deutsche Post

A-Score: 6.3/10

Value: 6.6

Growth: 4.7

Quality: 4.5

Yield: 7.5

Momentum: 7.5

Volatility: 7.0

1-Year Total Return ->

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Volvo

A-Score: 5.6/10

Value: 3.7

Growth: 6.4

Quality: 4.3

Yield: 8.8

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Saint-Gobain

A-Score: 4.8/10

Value: 4.7

Growth: 5.8

Quality: 4.5

Yield: 4.4

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Kuehne Nagel

A-Score: 4.6/10

Value: 4.4

Growth: 3.2

Quality: 5.5

Yield: 6.2

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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DSV

A-Score: 3.6/10

Value: 2.1

Growth: 6.3

Quality: 4.1

Yield: 0.6

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

185.65$

Current Price

185.65$

Potential

-0.00%

Expected Cash-Flows