Kuehne & Nagel International AG fell the most in 10 months after the world’s biggest sea-freight forwarder said Chief Executive Officer Reinhard Lange is resigning and reported profit that missed analysts’ estimates.
The shares fell as much as 5.7 percent, the steepest intraday decline since April 16, 2012. They traded 5.4 percent lower at 100.30 Swiss francs as of 9:28 a.m. in Zurich, valuing the company at 12.1 billion francs ($12.8 billion). The decline made them the worst performer on the 13-member Bloomberg Europe Transportation Index today.
Lange will step down for health reasons on May 7, with Chairman Karl Gernandt leading a group of executives assuming his responsibilities as the company seeks a successor, the logistics operator said. Kuehne & Nagel said full-year profit fell 19 percent to 485 million Swiss francs ($515 million). That missed the 523 million-franc average of 19 analysts’ estimated compiled by Bloomberg.
“The key concern for investors is the news that CEO Reinhard Lange will be stepping down early,” William Foggon, an analyst at Berenberg Bank in London said in a note to clients. “Kuehne’s succession plans were already under way but there is now a seven-month interim gap during which there will be no CEO.”
Kuehne & Nagel expects its sea freight volume to rise as much as 6 percent this year, compared with market growth of 2 percent to 3 percent, the company said in a presentation today. Airfreight flown will increase 1 percent to 3 percent, compared with a forecast of as much as 2 percent growth for the market.
The Schindellegi, Switzerland-based company failed to meet its growth targets for road and rail shipments last year as well as for contract logistics. The units’ volumes rose 7 percent and 4 percent respectively, with targets calling for as much as 10 percent in rail and road, and 5 percent in contract logistics.
“Volume development in the industry suffered from the slowdown of growth in China and restrained consumer and investment spending in large parts of Europe,” CEO Lange said in a statement today. “With the worsening of the sovereign-debt crisis, the economic climate deteriorated rapidly.”
Kuehne & Nagel on March 1 said it will realign its regional structure to cut costs and be able to react faster to changing markets. Chairman Gernandt today said the company didn’t adjust costs in a timely manner last year.
The company proposed cutting its dividend 9.1 percent to 3.50 francs a share, compared with a Bloomberg forecast of 3.80 francs.