The first quarter of 2021 was mixed for Logwin AG

The macroeconomic framework conditions affect the development of the Logwin Group in different ways. In the Air + Ocean business segment, the recovery of global trade with still limited capacities has a positive effect. The measures to combat the pandemic significantly impact stationary retail and private consumption, which is an important market for Logwin.

(Grevenmacher/Luxembourg) – The development of the global economy in the first quarter of 2021 was characterized by a continued recovery of economic activity. Industrial production and global trade have almost fully recovered from the slump in the first quarter of 2020, despite the ongoing global spread of the COVID-19 pandemic. The recovery of industrial production was particularly strong in China and the Asian economies. In the Eurozone and the United States, the recovery is still modest. For the entire year, a strong recovery of the global economy and global trade is expected.

The development in the service sector remains significantly below the levels of previous years, which has been strongly negatively affected by the measures to combat the spread of the COVID-19 virus. In the consumer-related service sector, and especially in retail, economic performance shrank again in the first quarter, and a recovery to pre-crisis levels is not expected until the end of the year.

The macroeconomic framework conditions affect the development of the Logwin Group in different ways. In the Air + Ocean business segment, the recovery of global trade with still limited capacities has a positive effect. The measures to combat the pandemic significantly impact stationary retail and private consumption, which is an important market for Logwin. The further progress of vaccination campaigns and the expected lifting of public restrictions will determine the course of the expected economic recovery and the impact on customers in the Solutions business segment.

Assets, Financial and Earnings Situation

Revenue

The revenue of the Logwin Group increased by 34.4% to €363.9 million in the first three months of 2021 (2020: €270.8 million). The Air + Ocean business segment achieved revenue of €288.5 million, which is significantly above the previous year due to high freight rates in sea and air freight and recovering volumes compared to the first quarter of 2020 (2020: €180.5 million). In contrast, the Solutions business segment was significantly below the previous year’s figure of €90.4 million, with revenue of €75.5 million, mainly due to the effects of the COVID-19 pandemic on network activities in the retail sector and planned declines in contract logistics.

Operating Result (EBITA)

Overall, the Logwin Group achieved an operating result of €16.4 million in the first three months of 2021, exceeding the previous year’s result by €7.0 million. The Air + Ocean business segment was significantly above the previous year’s level due to recovering volumes in sea and air freight and was able to benefit from the current market conditions. The Solutions business segment was below the previous year’s operating result (EBITA) in the first quarter of 2021, which had been positively influenced by a special effect related to the sale of a location in Germany. The effects of the COVID-19 pandemic on network activities burdened the earnings development in the first quarter of 2021.

Net Income

The net income of the Logwin Group amounted to €12.5 million in the first three months of 2021 (2020: €6.1 million). In addition to the significantly increased operating result, an improved financial result contributed to the increase in earnings.

Free Cash Flow

The free cash flow of the Logwin Group was significantly above the comparative value of the first quarter of 2020, particularly due to the improved development of working capital and the operating result after the first three months of 2021. The overall financial situation and liquidity of the Logwin Group remain positive.

Risks and Forecast Change Report

Compared to the information in the 2020 annual financial report, the risk situation for the Logwin Group has not changed significantly. It continues to be characterized by very high uncertainty regarding the further development of measures to combat the global COVID-19 pandemic and the effects on different economic sectors, and thus the markets and customers of the Logwin Group. National as well as international transport activities and contract logistics are affected in various ways by the measures taken to combat the pandemic. Additionally, increased procurement and sales risks, as well as an increased financial risk assessment, have emerged. As part of its consistent risk management, Logwin identifies emerging risks early and actively pursues their minimization. However, an unexpectedly negative impact on the assets, financial, and earnings situation of the Logwin Group cannot be ruled out. Regarding other existing and potential risks, we refer to the 2020 annual financial report.

Better Results Expected in 2021

Due to the significantly positive revenue and earnings development compared to the forecast report in the 2020 annual financial report, the Logwin Group now expects revenue growth for the entire year 2021, particularly in the Air + Ocean business segment, the extent of which, however, depends on the further development of freight rates and volumes. The operating result in the Logwin Group as well as in the Air + Ocean business segment is also expected to increase compared to the previous year. The net income is also expected to rise based on the anticipated operating result development.

The central control variables (KPIs) presented are part of the key figure system used in the Logwin Group and are explained and defined in the section “Financial Corporate Management” in the Group Management Report in the 2020 annual financial report according to the guidelines for alternative performance measures of the European Securities and Markets Authority (ESMA) dated October 5, 2015. Details about the results can be found on Logwin’s websites.

Photo: © Logwin