"We are experiencing significant momentum"
With a leaner corporate structure, significantly improved earnings from the first nine months and a clear vote of confidence from the majority shareholder, Logwin has clearly picked up speed in the current financial year. Logwin Magazine talked with CEO Berndt-Michael Winter and CFO Dr. Antonius Wagner about the present and future of the logistics service provider.
- Logwin CEO Berndt-Michael Winter
Logwin Magazine: The state of the global economy, and with it economic activity in the logistics sector, is experiencing a significant recovery after the crisis year of 2009. How is the Logwin Group developing in this dynamic environment?
Winter: Just like most other companies, Logwin was also severely affected by the consequences of the global economic crisis in the last year. We responded to this systematically. The final major step was the abandonment of our business segment Road + Rail and the integration of selected land transportation activities with the business segment Solutions at the beginning of 2010. Change has always been an integral part of our company’s history – of course not as an end in itself but as the key to the Group’s success. We were well advised to take the path of renewal even if it was not always easy.
Our nine-month financial report has also confirmed us in our efforts to emerge from the crisis in better shape than when we entered it in 2008. Compared with last year we increased sales by more than 22 % to one billion euros. Earnings rose from 10.2 million euros to 19.2 million euros. But it is not just the figures that are giving us cause for optimism. Our concentration on Solutions and Air + Ocean is bearing fruit and will continue to support long-term business growth. Today we are a leaner, more efficient and more successful company than one year ago.
Logwin Magazine: More successful and, in terms of sales, significantly smaller. How is Logwin positioning itself in the market?
Winter: The aim of our strategy is organic growth and profitability. What counts is not having an abundance of services, but quality and the exact alignment with the requirements of our customers. We can differentiate ourselves in the market as a “minnow among the big fish” and do not need to fear comparison. On the contrary, we work in a focused and economic manner, always on the same level with our customers. That’s what especially small and medium-sized companies appreciate about Logwin as their logistics partner. Solutions and Air + Ocean provide us with a solid bass. Quality, partnership and flexibility are the cornerstones of our services. And we will continue to grow intelligently in future with our innovative and reliable customer solutions.
- Logwin CFO Dr. Antonius Wagner
Logwin Magazine: “Logwin AG decides to increase capital” was the title of a press release that appeared recently. It stated that new shares will be issued with subscription rights excluded. The new capital is to be used to pay off part of the bond. Could you “interpret” this financial announcement for us?
Wagner: Logwin AG’s articles and memorandum of association explicitly allow for the possibility of increasing capital, also with the exclusion of subscription rights. Put simply, this means that the newly issued shares do not have to be offered to all shareholders provided the issue price of the new shares reflects the price quoted on the stock exchange. This process is fast and saves costs.
In this case, all the new shares have been purchased by the majority shareholder DELTON. With almost 35 million new shares and an issue price of 1.15 euros per share, 40 million euros has thus accrued to our company. We will use the 40 million euros together with 25 million euros of available cash to repay half of our bond prematurely in the course of December.
Logwin Magazine: Will the removal of 25 million euros from available cash in order to make the repayment not weaken the own liquidity and financial situation?
Wagner: Looking at our nine-month financial report it shows that we have a pleasing 74 million euros in liquid assets. This resulted from the successful disposal of our Road + Rail activities, as well as our very strict management of receivables and our prudent investment policy. We have worked hard to create this opportunity to repay the bond prematurely especially as repayment will bring considerable benefits. Repayment of part of the loan will relieve earnings significantly. The 8 percent interest rate on the total bond amount of 130 million euros means we are having to pay interest of over 10 million euros each year. We will be able to halve this interest burden from 2011.
This capital measure will not only lead to a pleasing development in operations, it will also allow us to improve the Logwin Group’s balance sheet structure.
Logwin Magazine: It is no secret that you both are CEO and CFO of Logwin AG and at the same time of DELTON AG. Was that a difficult situation for you from a legal point of view?
Winter: Also DELTON AG’s interests are very much aligned with the Logwin AG’s success. DELTON is showing us tremendous support by providing the 40 million euros. In the concrete case of the capital increase there was formally a so-called conflict of interest, as lawyers say. This was resolved by Dr. Wagner and myself not participating in the discussions and decisions relating to this matter in Logwin AG’s Board of Directors in accordance with the articles and memorandum of association. The Board of Directors was fully able to make a decision since it is made up of five members.
As CEO of the Logwin Group I can safely say that this step by DELTON is a clear vote of confidence in Logwin’s continued development. And we are sure that we will meet the expectations of our majority shareholder. We are benefiting from the continued recovery in the global economy and the associated demand for efficient logistics services. With the new corporate structure we are also increasing our performance capabilities at the same time. In short, we are experiencing significant momentum.
Logwin Magazine: Enhanced earnings, a more positive balance sheet, and two instead of three business segments... Are customers also benefiting from the changes being made?
Wagner: It is not just customers, but all business partners and above all employees who are benefiting from Logwin’s financial stability. Ultimately, nobody wishes to cooperate with or work for a company that is always making a loss. This is especially true of a logistics service provider to whom customers often entrust important business processes together with their logistics on a long term basis. In this respect all the measures taken in recent years, i.e. reorganization, continuous internal and external process improvements, the sometimes strict working capital management were also aimed at not just ensuring the Group’s stability but at enhancing it. This process of constant improvement will never be completed.
And at the end of the day, we also wish to pay out a dividend to our shareholders from the profits earned just like any normal company.
- The current press releases as well
as the nine-month financial report of
Logwin AG are availabe in the News
section of the Logwin Website
Logwin Magazine: What are the operational priorities that Logwin is setting strategically?
Winter: Solutions sees a clear focus in retail logistics. In the coming years we will expand the Fashion and Media special networks to form a retail network. What is exciting here are the branch logistics in city centers and in shopping malls. This is where we see great potential for providing relief to the retail trade with intelligent logistics solutions. Besides fashion and media, the focus here will also be on lifestyle products such as cosmetics, leather goods and gifts as well as sports goods, toys and similar products. We will be pursuing this initiative in Germany and Austria as well as in major Eastern European countries. There are similar development paths in Media as well as in our logistics activities in industries such automotive, engineering and consumer goods, to name just three of many examples.
Air + Ocean will continue with its strategy of international expansion in a measured and systematic way. The Indian sub-continent is very much in focus following expansion in Europe and Latin America. Sri Lanka, Pakistan and Bangladesh are all interesting markets. And the importance of the North African states could grow as more emphasis is placed on the costs of transport again. And there is still considerable synergy potential between the business segments, too. In particular, greater integration in the area of Fashion will be in our customers’ interest.
These are all good prerequisites for a final push in 2010 and our prospects for 2011.
