Earnings increased again significantly, up a third from 2010. Ocean and air freight volume growth was substantially higher than market. These results demonstrate another year of strong, steady progress for Damco, the logistics arm of the A.P. Moller – Maersk Group.
COPENHAGEN. Global logistics and freight forwarding company Damco has released 2011 results which demonstrate continued strong growth towards becoming a major player in the global logistics industry.
Damco’s Earnings Before Interest and Tax (EBIT) improved by 29% in 2011, rising from USD 75 million in 2010 to USD 97 million.
Productivity improvements lowered the overhead expense ratio and drove the EBIT return on sales from 2.8% to 3.5%. Return on invested capital (ROIC) rose from 22% to 26% for the year. Total revenue grew to USD 2.8 bn from USD 2.7 bn in 2010, with reduced freight rates masking the strong increase in underlying business.
“We are pleased to have delivered such strong results, despite the softening market in the second half of the year. Taking our market leading expertise in Retail and Lifestyle to other industry sectors is clearly resonating with customers”, commented Rolf Habben-Jansen, CEO of Damco.
The traditional annual Q3 peaks in Europe and North America did not materialize due to weakened consumer confidence resulting from US budgetary concerns and the Eurozone crisis. Europe and North America posted lower results in 2011 compared to the prior year.
Growth markets come through
The ongoing focus on accelerating Damco’s expansion in growth markets led to improved results across key parts of South and Southeast Asia, Africa and Latin America.
“More than 60% of our employees are in growth markets and the strength of our business in places like China, India, Vietnam, Indonesia and Africa allows us to challenge and win against even our largest competitors, which puts us in a good position when growth in Europe and the US slows”, Damco CEO Rolf Habben-Jansen said.
“Our acquisition of NTS, the Chinese air freight forwarder, further demonstrates our commitment to growth markets and building a strong air freight platform to complement our supply chain management and ocean forwarding services”, he added.
Airfreight tonnage rose 47% in 2011 compared to the prior year, mainly driven by the acquisition of NTS in August. Like-for-like airfreight volume growth was about 5% above market. Damco’s ocean volume also grew strongly at 15%, some 9-10% ahead of the general market. Supply chain management (SCM) volumes however declined 3% from last year mainly due to reduced imports handled for Damco’s large US retail customers.
Global commercial initiatives implemented during the year resulted in Damco winning more large customers within targeted industry segments. New sales secured during 2011 had a total annualized gross profit of approx. USD 250 million. Customer satisfaction ratings improved for the fourth year in a row to the highest level yet.
Damco plans to again grow volumes significantly faster than market in 2012, while also further improve profitability.
“We will continue to focus on providing our customers with exceptional service, taking our supply chain management expertise to targeted industry verticals and further strengthening our products. We will also launch some new and differentiated services”, said Rolf Habben-Jansen, Damco CEO.