Status Report

Investments and depreciation

 

Property, plant and equipment

The Group continues to operate an asset-light business model and invests only into strategically important locations with high demand for state of the art or industry-specific logistics space.

In 2020, the Kuehne+Nagel Group invested a total of CHF 177 million (2019: CHF 320 million) in fixed assets. Investments in properties and buildings amounted to CHF 16 million (2019: CHF 59 million). CHF 161 million (2019: CHF 261 million) were invested in other fixed assets, operating and office equipment.

Depreciation of property, plant and equipment for the year 2020 amounted to CHF 185 million (2019: CHF 206 million). Refer to note 26 of the Consolidated Financial Statements for further details.

All capital expenditure in 2020 was financed through operational cash flow.

In 2020, the following major investments were made in properties and buildings:

Location CHF million Centres
Villefranche, France 8 Reconstruction of a logistics facility
Bremen, Germany 4 Construction of a new office building
Others 4  
Total Group16  

The allocation of investments in other fixed assets, operating and office equipment by category is as follows:

CHF million 2020 2019
Operating equipment 69 107
Vehicles 10 26
Leasehold improvements 40 70
IT hardware 33 43
Office furniture and equipment 9 15
Total Group161 261

The allocation by region is as follows:

CHF million 2020 2019
EMEA 118 165
Americas 27 57
Asia-Pacific 16 39
Total Group161 261

The allocation by business unit is as follows:

CHF million 2020 2019
Sea Logistics 13 20
Air Logistics 16 22
Road Logistics 19 31
Contract Logistics 113 188
Total Group161 261

Right-of-use assets

A total of CHF 512 million (2019: CHF 688 million) was invested in right-of-use assets. The allocation of investments in right-of-use assets is as follows:

CHF million 2020 2019
Buildings 418 598
Operating equipment 46 37
Vehicles 48 53
Total Group512 688

The allocation by region is as follows:

CHF million 2020 2019
EMEA 394 422
Americas 68 195
Asia-Pacific 50 71
Total Group512 688

The allocation by business unit is as follows:

CHF million 2020 2019
Sea Logistics 31 19
Air Logistics 24 21
Road Logistics 30 35
Contract Logistics 427 613
Total Group512 688

Depreciation of right-of-use assets amounted to CHF 506 million (2019: CHF 497 million). Refer to note 27 of the Consolidated Financial Statements for further details.


Acquisitions

Effective January 7, 2020 the Group acquired 100 per cent of the shares of the road logistics activities of Rotrexma 2 Holding BV (Rotra), a company headquartered in the Netherlands, together with its subsidiaries. With approximately 800 employees and a yearly net revenue of above CHF 110 million the Group of companies operates a fleet of over 200 trucks, providing Europe-wide overland transportation as well as contract logistics services for Dutch, Belgian and international customers. It manages cross-dock facilities in the Netherlands and in Belgium.


Agreed upon divestment

On March 8, 2020, Kuehne+Nagel entered into a binding agreement to sell a major part of its contract logistics portfolio in the United Kingdom to XPO Logistics, Inc. (NYSE: XPO). The scope of the transaction includes the drinks logistics, food services and retail & technology businesses, whereas the pharma & healthcare businesses are retained. On December 31, 2020, the assets and liabilities related to this divestment are classified as assets held for sale (CHF 434 million) and liabilities directly associated with the assets held for sale (CHF 419 million) and are presented separately in the Balance Sheet. Impairments of goodwill allocated to the disposal group of CHF 18 million as well as CHF 49 million of the other assets were recognised to reduce the net carrying amount of the assets held for sale to their fair value less costs to sell. In addition, the Group recorded transaction costs of CHF 4 million (included in the line item “selling, general and administrative expenses” in the Income Statement). The transaction closed on January 1, 2021.


Agreed upon acquisition

On February 22, 2021, the Group entered into an agreement to acquire 87.3% of the shares of Apex International Corporation (Apex), one of the leading Asian freight forwarders, especially in the transpacific and intra-Asia. The Group of companies is a renowned specialist for air logistics services, founded in China in 2001 and headquartered in Shanghai and Hong Kong. With approximately 1,600 employees, Apex generates a yearly turnover in excess between CHF 2.1 billion. In 2020, it handled a total air freight volume of approximately 750,000 tons and sea freight volume of 190,000 TEU. The acquisition of Apex follows the Group’s strategic growth ambition in Asia. The purchase price in the range of CHF 1.1 and 1.2 billion will be financed by the Company’s own funds and, if needed, by available credit lines. The acquisition is subject to customary closing conditions, including merger clearance by the competent competition authorities. The transaction is expected to close in the third quarter of 2021.