Geodis (Acquired by SNCF 2008)

French rail and logistics group SNCF has significantly ramped up its apparent push to try and become as important a player on the global logistics stage as German counterpart and rival Deutsche Bahn.

The group's Transport and Logistics Division business Geodis, which it bought earlier this year after previously being its main shareholder for many years (Ti Logistics Briefing, Briefing, April 7, and News, April 29), this week announced it had acquired IBM's internal global logistics operations in an all-cash deal for an undisclosed amount and signed a multi-year outsourcing contract.

Through that contract, stated Geodis, it would be the sole lead logistics provider for IBM, managing approximately €1bn per year of IBM's logistics costs supporting asset recovery services, service parts logistics and flow management of all hardware and software products worldwide.

"This agreement is strategic to reinforce Geodis' position among the world's leading logistics providers capable of delivering end to end solutions to its global clients," claimed Jean-Louis Demeulenaere, Geodis Deputy CEO.

"With this partnership, we will strengthen the skills and expertise required to service both IBM's and our existing and future clients' core logistics needs in more than 120 countries. IBM's global logistics operations will significantly upgrade our services portfolio."

Geodis said it was increasing its investments outside Europe and the new acquisition complemented the company's existing teams. "By leveraging IBM's employees in more than 50 countries across the US, Canada, Latin America, Europe and Asia Pacific, Geodis' service offering will be enhanced with multinational supply chain experts and an established worldwide platform to enable rapid growth and expansion," it claimed.

Geodis said the IBM transaction, which was expected to close in the first quarter of 2009, was subject to the expiration or the early termination of the waiting period under the HSR Act and the issuance by the EC (European Commission) of a decision declaring the transaction compatible with the EC Common Market as well as to applicable regulatory clearance, local agreements and appropriate and required employee information and consultation processes.

2006

In November 2006 TNT N.V. announced that it had signed a deal to sell its freight management business unit to Geodis. The transaction had a value of €460m, cash and debt free.

The acquisition of TNT Freight Management (TFM), can be considered a strategic move for Geodis for a number of different reasons: 

1. It enables Geodis to double the size of its freight forwarding business (air and sea freight), which has become increasingly important in customers' demand for international logistics services. This is a high potential sector with extremely good prospects for growth.
2. Geodis and TFM complement each other, both in terms of geographical coverage and customer portfolio, which offers the new Group a whole host of opportunities for development.
3. The acquisition allows Geodis to redistribute its core business portfolio as follows: freight forwarding (35.6%), distribution - groupage & express - (35.5%) and logistics & transport (28.9%). 

The acquisition also gives Geodis the means to step up its international development and benefit from opportunities to grow.

It is the first major purchase by GEODIS for many years after a period when management focused on the turnaround of its business. Previously much of GEODIS' forwarding business had been undertaken in partnership with German operator Rohde & Liesenfeld. It is unclear how this relationship will be affected.

2005

Moving into Eastern Europe and Asia

In a bid to ensure the success of its customers' international strategies, Geodis Group has set up sites in Slovakia, Hungary, Romania, Poland, Czech Republic and the CIS. In Asia, they work in ten countries while a further ten are covered by exclusive partnerships.

Geodis Shenzhen a subsidiary since 2004 was one of the first non-Chinese logistics companies to obtain a "Permit A", which is essential for enterprises wanting to operate in the country and invoice independently for all services provided.

They also boosted their sales and marketing abroad with the creation of Geodis Solutions Asia, a cross-divisional entity that co-ordinates business development and logistics solutions design in the region.  These efforts have already begun to pay dividends as the company has signed contracts with Daimler Chrysler Malaysia, Morgan and Metro Levistone.

Reverse Logistics, a strategic platform for growth

The Group has been developing its expertise in this field particularly through its specialised subsidiaries such as Geodis Valenda (Automobile), Geodis Euromatic G2R (Hi-Tech), BM Pack Service (Chemicals) and its dedicated European sites, in Mainz (Germany) and Busnago (Italy).

The joint-venture created last in December 2004 with SITA strengthened Geodis' position, ranking it as one of the top European operators in Reverse Logistics today.

This strategy has begun to bear its first fruit: ERP (European Recycling Platform), a joint-venture founded by Braun, Electrolux, HP and Sony, entrusted Geodis with the design, implementation and coordination of its recycling operations for current and end-of-life products in France, the United Kingdom, Ireland, Spain and Portugal.

2005

Historic Freight Forwarding Strategy as TNT

TNT acquired major Scandinavian forwarding company, Wilson Logistics Group in 2004. The company paid in the region of SEK 2.35bn (€257m) and the deal was financed from cash reserves.

Wilson has a strong global freight forwarding network in 28 countries. With revenues of approximately €714m in 2003 and more than 2000 employees, the acquisition of Wilson will provide TNT with forwarding capabilities which it previously lacked.

It had been known for some time that TNT was looking to buy a forwarding company in order to provide clients with a comprehensive portfolio of logistics services. By doing so the company is following in the footsteps of DPWN which acquired Danzas, AEI and ASG as well as UPS which purchased Fritz in 2001. TNT is active in several vertical sectors which increasingly require global forwarding capabilities such as automotive and high tech.

2004

The strategy of Geodis throughout the late 1990s was to expand its capabilities and geographic scope though an extensive acquisition programme. These included Cavewood, United Carriers, Borghi, Vitesse, Extand and Zust Ambrosetti.

However the acquisitions were not as successful as the company had first hoped and the group started to make losses. This was in part due to the poor performance of individual operating units (such as United Carriers) and partly due to the lack of integration, which could have unlocked network value. This led to a number of disposals as the company sought to re-build its capital and focus around profitable units.

In 2002 Geodis launched the 'Horizon' project as a master plan for the whole group. Its goal was to redefine the company's offering, streamline related processes and re-engineer core business information systems accordingly by 2005. In effect this was an integration plan to bring together all the companies which it had acquired into what Geodis referred to as a 'federation'.

The first stage of the project brought about the development of standard products for the different core businesses, available in all markets in which the company was present, as well as keeping a number of country specific products. Processes and information systems were also mapped.

Whilst integrating the various companies it had bought there was little opportunity for further acquisitions, especially when management was focused on turning round the financial performance of the company.

Therefore instead of expanding its freight forwarding capabilities through acquisition like many of its competitors, Geodis decided to entered into a strategic alliance with German freight forwarder, Rohde & Liesenfeld.

One area in which it has continued to expand however has been Central & Eastern Europe in order to take advantage of the accession of the new states to European Union. The company now has operations in Poland, Slovakia, Hungary and the Czech Republic as well as in non-EU countries: Russia, Belarus, Ukraine, Romania.

Geodis" development strategy has not ignored Asia Pacific where it established Geodis Solutions Asia, a cross-divisional entity that coordinates business development and logistics solutions design in the region. It is also present in China.

Functionally Geodis has been developing its expertise in the reverse logistics sector, particularly through its specialised subsidiaries such as Geodis Valenda (Automobile), Geodis Euromatic G2R (Hi-Tech), BM Pack Service (Chemicals) and its dedicated European sites, in Mainz (Germany) and Busnago (Italy). It created in 2004 a joint venture with SITA, a leader in the management and treatment of current and end-of-life products.

On a corporate level perhaps one of the most important developments has been the increase in free float as Salvepar has reduced its holding from over 27% to just under 9%. SNCF, the French Railways, remains the largest shareholder with 44.7% of the total stock.

2008

April - Directors of French international forwarder/logistics group Geodis have unanimously recommended that shareholders accept an offer for the company made by France's state railway company, SNCF, earlier this month, April 7, 2008.

In a statement, Geodis reported that its board of directors had met yesterday (April 28) to render a reasoned opinion regarding the tender offer initiated by SNCF Participations. It said the board had been provided with several reports. One, prepared by, financial advisors Lazard and BNP Paribas, concluded that the offer price was "in line with the results of the various methods used in order to determine the value of Geodis". A second, prepared by independent expert Ricol Lasteyrie & Associés, considered that the price offered was "fair for Geodis' minority shareholders".

Geodis said its board of directors believed the offer initiated by SNCF "would not adversely affect the interests of Geodis and those of its employees, and that such offer may provide the latter with better security and development perspectives than those which could arise from the status quo".

Regarding the situation of shareholders, Geodis said its board of directors had expressed an intention to tender their own shares to the offer, except the shares that must be held by each director, pursuant to the bylaws of the company, and "unanimously recommends that the shareholders of Geodis tender their shares to the public offer".

Geodis added that the contemplated timeframe of the offer (without taking into account any potential reopening of the offer) was:

• May 20, 2008: Decision of the AMF on the conformity of the offer.
• May 22, 2008: Opening of the offer.
• June 25, 2008: Closing of the offer.
• July 17, 2008: Settlement delivery.

April - France's state railway company, SNCF, looked set to become a major global logistics player following the announcement that it was to make an offer for the outstanding shares which it did not already own in French international forwarder/logistics group Geodis.

SNCF had for many years been Geodis' main shareholder and currently held 42.37% of its share capital and 45.79% of its voting rights. €135 per share was to be offered to the shareholders in cash, valuing the company at nearly €1.1bn. The offer represented a 79% premium based on the average price of Geodis' shares during March 2008.

As Geodis' management stated, the offer was part of a plan by SNCF to create an international multimodal operator in the field of logistics and transportation. Pierre Blayau, CEO of Geodis, would be in charge of implementing that plan.

SNCF's new chairman, Guillaume Pepy, also mentioned that his company was planning on buying another rail operator in the near future. The acquisition of Geodis by SNCF will bring about the company's renationalisation, undoubtedly bringing protests from the private sector.

However, French politicians see this as a necessary step to help SNCF rival its main European competitor, Deutsche Bahn, which had been highly acquisitive in recent years, for example buying up international forwarders/logistics providers Stinnes/Schenker and Bax Global.

A listed company the majority shareholder is the SNCF group with 42.37% of the shares, the free float totals 40.53%.

2007

In 2006, Salvepar's interest in the Group was further reduced from 8.59%to 5.85%. Taking these transactions into account, the free float stood at 35.44% at 31 December 2006.

2006

Listed company.  SNCF (French Railways) 43.73%, AGF Vie 9.36%, Groupe Salvepar 8.59%, Geodis Mutual Fund 5.85%. 

2007

Performances were very uneven across the division in terms of both growth and profitability.

Whereas Groupage in Europe saw revenue decline in 2007, Groupage in France continued to enjoy sustained revenue growth of 7.3%, mainly due to:

• Further growth in volumes, particularly in the first half of the year
• The full-year impact of new contracts, especially the FedEx contract
• Price adjustments in France following the sharp increase in diesel prices and the cost impact of adapting the Express transport plan to new speed limits applicable to the types of vehicle used.

Owing to these effects, Groupage in France generated revenue of €1,426m, up €96.9m from the previous year. Profit from ordinary activities in France, corresponding to the Calberson network and France Express, stood at €61.0m, representing an operating margin of 4.3%. The 2007 figure was stable with respect to the €60.9m reported in 2006. Operating margin was down compared to 2006 due to new contracts start-up costs and the cost impact of adjusting the transport plan to new speed limits.

In a continuation of the previous year's trend, Groupage in Europe reported a profit from ordinary activities loss of €20.6m for revenue of €286.1m compared with a loss of €17.8m for revenue of €288.9m in 2006.

In Spain, the loss amounted to €9.7m for revenue of €78.6m. Local managers were replaced during the first half of the year and a restructuring plan was implemented in the second half. Most of the major operational difficulties concerned the Barcelona branch.

In Italy, revenue was down by 3.4% due to the impact of the Italian transport workers' nationwide strike in December. Despite the strike, a less pronounced loss of €4.6m was reported in 2007, versus €6.0m in 2006.

In Germany, the Groupage business was terminated on 31 December 2007 after generating a €2.6m loss in 2006 and a €2.9m loss in 2007 for revenue of €8.2m.

While the Euromatic specialised distribution network saw a bigger €5.7m loss in 2007 (€3.4m in 2006), the business seemed to be on the way to recovery, with a smaller loss reported in the second half than in the first.

Source: Geodis

2007

• Further growth in volumes, particularly in the first half of the year
• The full-year impact of new contracts, especially the FedEx contract
• Price adjustments in France following the sharp increase in diesel prices and the cost impact of adapting the Express transport plan to new speed limits applicable to the types of vehicle used.

Source: Geodis

2007

• The consolidation of Wilson over the eleven months from 5 February 2007 gave a material boost to Group operating profit.
• The initial impact of synergies arising on the new network’s creation added roughly €3m to operating profit.
• The 10% like-for-like increase in revenue and the elimination of loss-making facilities in Asia raised the operating profit level of Geodis’ Asian subsidiaries.

Source: Geodis

2007

Source: Geodis

2008

Group revenue amounted to €25,188m in 2008, for an increase of €1,628m compared to 2007. The 7% increase was attributable for €375m to the external growth of the Transport and Logistics division (primarily the 2008 acquisitions of Rohde & Liesenfeld, ITL, Oughtred & Harrison and the consolidation of Wilson over 12 months). 

The organic growth of the other divisions breaks down as follows:

• Infrastructure and Engineering: €282m, 6%
• Local Transport: €427m, 7%
• Passenger France Europe: €553m, 8%.

Current operating profit stood at €980m.

2007

Group revenue amounted to €23,691m for 2007, an increase of €1,733m compared to 2006. The 8% increase is attributable for €806m to the acquisition of Wilson and for the remainder (+ 4.3%) to increased activity in the various divisions:

• Passenger France and Europe: + €348m, + 6%;
• Local Transport: +€214m, + 4%;
• Transport and Logistics: + €1,049m, + 16% (+ €243m excluding Wilson revenue);
• Infrastructure and Engineering: + €87m, + 2%.

Note: 2007 was the first annual publication under IFRS and 2006 figures are restated from €21,874m and €1990m for revenue and Operating Profit.

Source: SNCF

2008

Acquisitions in 2008 (Rohde & Liesenfeld, ITL, Oughtred & Harrison) and 2007 (Wilson) highlighted the Transport and Logistics division results. These acquisitions contributed €375m in revenue.

Excluding the Group structure impact, revenue was stable (increase of €24m, or 0.3%):

• Global Offering: growth was driven by the acquisition of R&L.
• On a constant Group structure basis, activity increased by 2% due to growth over the first three quarters of the year, before posting a decline in the fourth quarter because of a net deterioration on the economic front. The decline involved all businesses and particularly Parcel Delivery, Freight Forwarding and the iron activity of STVA.
• Rail Transport: the €133m decline in SNCF Freight traffic revenue over the last quarter was partially offset by the consolidation of ITL (€35m) and the organic growth of Naviland Cargo (€16m).

2007

2007 was marked by sharp growth in activity and a major improvement in the results of the Transport & Logistics strategic division.

Geodis' contribution to Transport & Logistics revenue totalled €4,782m, up 26%, and breaks down as follows:

• the consolidation of Wilson as from February 2007 representing €806m,
• continued development of international flows,
• sustained French domestic flows in Parcel Delivery and Express activities,
• strong sales momentum in Eastern European countries.

•  Asian subsidiaries: growth in revenue at the same time as the removal of loss-making centers,
• Eastern European countries: new contracts in the automobile industry,
• closure of the loss-making site in Russia and improved use of logistics agreements in Hungary,
• Bourgey Montreuil: appropriate repercussion of cost increases (diesel).
• SNCF Freight and TLP subsidiaries

• the automobile sector where the group gained market shares, including STVA abroad,
• the rail-road combined transport sector, whose appeal is evident at SNCF Freight, Naviland Cargo and Rouch Intermodal,
• greater leasing of vehicles and rolling stock (early impact for SIBELIT),
• various European markets (development of France Wagons' customers).

Note: 2007 was the first annual publication under IFRS and 2006 figures are restated from €6,595m and €202m for revenue and Operating Profit.

Source: SNCF

2005

In early March 2006 Geodis released its final results for 2005. The group realised operating profit of €85.4m, amounting to 2.4% of revenue, increasing around 22% over the previous year on a like for like basis. International goods flows, its operations in Eastern Europe, and the increased business generated in France during the second half of 2005 enabled Geodis to post revenue growth of 6.7%.

Despite the strong performance overall, the company reported a 2005 operating loss of €20.8m in Italy. This was roughly in line with management's announcements in June with an improving sales outlook and lower operating losses posted in the second half of the year.

In France, operating profit continued to improve, largely as a result of increased business activity in the second half of 2005 as well as the company's ability to pass on various cost increases to clients. In France they experienced growth of 5.4% as a result of high volume in the Groupage and Express Parcels businesses as well as in air and sea freight forwarding. As in the third quarter, however, turnover for Full Truckload operations saw only modest growth.

The performance of operations in the Benelux, Germany, and Eastern Europe offset difficulties encountered in other European countries.

According to Geodis, business remained strong in the fourth quarter of 2005, as turnover increased by 8.6% year on year. On a like-for-like basis this corresponded to organic growth of 6.3%. For the full year, Geodis expanded revenues by 6.7% to €3,595.7m with like-for-like growth of 5.5%.

Throughout the rest of Europe, Geodis achieved growth of 5.6% in the fourth quarter. This was attributed to higher volumes in Eastern Europe and commercial developments in the United Kingdom, Ireland, and Spain. The slowing rate of decline of turnover in Italy (-2.7% in the fourth quarter versus -6.6% in the half year ending June 2005) also contributed.

Asia, with growth of 47.9% and 34.7% like-for-like growth for the full year, provided most of the increase in the company's turnover in the rest of the world.

2005

In France the Geodis group reported a 5.5% increase in revenue for 2005 with Groupage and Express business revenue increasing by 5.5% for the year. Growth was more pronounced during the last months of the second half driven both by passing on diesel fuel price increases and by gains in market share.  Revenue from Geodis Bourgey Montreuil increased by 2.0% in 2005, primarily as a result of the development of new contracts in the automotive sector.

The acquisitions of Audas and de Chenue enabled the Logistics business to stabilise its revenue during the first months of 2005 followed by a recovery in growth in the second half of the year.  

Air and Sea Freight Forwarding continued their strong growth throughout 2005 with all of the Group's traffic activities with the United States and Asia benefiting from increased volumes. The ExxonMobil contract for the delivery of logistical and transport services within Africa generated a high level of revenue. 

Operating profit for the Group in France decreased to € 98.6m from € 149.2m for 2004, (2004 included a € 63.2m capital gain net of provisions arising from the disposal of the Batignolles property site). Without this capital gain, operating profit rose 14.7% between the two years.   

Groupage and Express operating profit increased as a result of strong volume growth, primarily from the third quarter, as well as a rate policy that enabled the region to compensate for adverse effects of diesel fuel price increases. 

Air and Sea Freight Forwarding also enjoyed operating profit growth in 2005, driven by the ExxonMobil contract and air and sea volume growth.  Full Truckload activities, grouped together in the Geodis Bourgey Montreuil subsidiary, posted operating profit comparable to that of 2004. Revenue growth was primarily driven by the automotive sector, with other sectors providing stable revenue relative to 2004. 

Operating profit from logistics contracts decreased between 2004 and 2005, reflecting both a drop in major high-tech account volumes and the impact of the implementation in the second half of the year of a restructuring plan at the Group's Laval site. This site, which specialises in logistical operations on behalf of T&A (a joint venture of TCL and Alcatel), experienced a significant drop in volumes following a customer"s decision to transfer its production to Asia. These negative effects were partly offset by the integration of Audas company results in the first quarter of 2005, as well the progressive reduction of unused warehouse space.

2004

Source: Geodis

2006

Revenue for the Europe region (excluding France) continued to grow in 2006, rising €32.9m (3.2%) to €1,045.9m from €1,013.0m the previous year.  Like-for-like growth came to 1.8%.

The slower growth observed in the second half of the year was due to the limited effect of changes in Group structure and foreign exchange rates and to lower volumes for certain major customers in the high-tech industry.

Operations in Europe (excluding France) generated an operating loss of €0.5m versus a €17.4m loss in 2005. The second half of the year saw a return to breakeven compared to a loss of €6.3 bn in the second half of 2005. 

2005

In Europe (excluding France) the Geodis group saw its revenue progress throughout 2005, rising 7.1% for the year. 

Source: Geodis

2006

2005 

Source: Geodis

2007

2006

2006 saw a return to growth in Italy, with revenues gaining €5.9m (1.4%) over the year to €415.9m from €410.0m in 2005. Activities related to international trade flows and major projects offset the continued decline in European groupage revenue.

Italy ended the year with an operating loss of €3.6m - after restructuring costs of €4.2m - versus €20.8m in 2005. 

2005

Geodis Italy revenue decreased 5% for the year, after suffering a 6.6% drop in the first half. The subsidiary's activities were significantly affected by the country's economic slowdown and in particular by the drop in exports at the beginning of the year.  They also were affected by the negative effects of restructuring measures that were reflected in closures and the implementation of new transport plans. Contract acquisitions and growth experienced at year end, however, will enable the progressive reversal of these negative effects. 

They posted a 2005 operating loss of € 20.8m, compared to € 21.1m for 2004, with a significant drop in second-half-year operating loss to € 5.4m from € 16.9m for the same period last year.  

Source: Geodis

2007 

2006

In Spain, revenue climbed to €127.2m in 2006 from €117.1m in 2005, representing an increase of €10.1m (8.6%) that was attributable to the end-2005 acquisition of Ibercondor. 

The operating loss deepened to €13.6m from €3.6m in 2005, partly as a result of the €4.8m impairment loss recorded on intangible assets recognized on the business combination with Ibercondor in 2005. In addition, the national network experienced problems in 2006 in its new branch in Barcelona, which is the largest in the network in Spain.

2005

Geodis Spain revenue rose by 12.3% between 2004 and 2005, with two thirds of this growth arising from the integration of Ibercondor, with the balance resulting from the positive impact of local commercial developments.  

Source: Geodis

2007

In 2007, the Group changed its internal organisation, which had been based on geographical regions (France, Europe excluding France and Rest of the World) since 2001. 

2006

Benelux

With no noteworthy changes in the contract portfolio, revenue in Benelux contracted by €8.2m (4.4%) over the year to €178.0m from €186.2m in 2005. The decline was largely due to a few major clients that shipped smaller volumes compared to the previous year.

In the Netherlands, operating profit was boosted by the €8.4m capital gain realized on the sale of the Rotterdam site, raising Benelux operating profit to €11.6m in 2006 versus €4.5m in 2005.

Germany

In Germany, revenue was €106.8m in 2006 compared to €84.4m in 2005. The year-on-year increase of €22.4m (26.5%) was attributable to the contribution of newly-consolidated Boos Groupage and the development of new contracts.

In Germany, operating profit amounted to €0.6m in 2006 versus €4.9m in 2005.

United Kingdom

In the United Kingdom, revenue declined by €11.3m (8.5%) to €122.4m from €133.7m in 2005. The 2005 restructuring led to a fall in revenue from trucking activities in 2006. In addition, after a period of rapid growth in European PC distribution services on behalf of IBM/Lenovo, volumes declined over the second half of the year.

Operations in the United Kingdom generated an operating profit of €1.0m in 2006 versus a €6.1m loss in 2005.

Ireland

In Ireland, revenue increased 15.4% to €47.9m from €41.5m in 2006.

Ireland contributed operating profit of €2.8m in 2006 compared to €0.6m in 2005. 

Eastern Europe

In Eastern Europe revenue continued to grow, rising by €10.5 m (21.6%) to €59.1m from €48.6m in 2005. The second half of the year saw the termination of a loss-making contract in Russia and the halting of services for Philips in Hungary.

In Eastern Europe, operating profit stood at €0.2m in 2006 versus €1.9m in 2005.

Greece

In Greece, revenue rose 8.2% to €10.5m from €9.7m in 2005.  Operating profit amounted to €0.4m versus €1.2m in 2005.

2005

Germany

Geodis Germany posted a 5.5% drop in revenue, following the end of a spare parts agreement with IBM, which had no impact on its profitability. They realised a 2005 operating profit of € 4.9m, which was unaffected by a drop in revenue arising from the end of a spare parts distribution contract with IBM.

Benelux

Geodis Benelux saw its revenue decrease by 1.8% in 2005 without any notable movement in contracts. They posted a € 1.5m drop in operating profit relative to 2004, due to lower major high-tech account volumes in the second half.

Ireland

Geodis Ireland saw its revenue increase by 25% during this time primarily due to volume growth from its IBM contract.  Geodis Ireland posted a € 0.6m operating profit, due to its renegotiation in 2004 of its contract with its main customer, IBM.

Eastern Europe

The Group posted 102% revenue growth in Eastern Europe, driven by both the integration of the Czech company CES, which was fully consolidated following the purchase of all of its share capital, and the strong growth in activities in Hungary.  The Geodis group's operating profit nearly doubled in Eastern Europe to € 2.1m from € 1.1m, due to the integration of CES and revenue growth in Hungary.

UK

2006

In France, the Groupage and Express businesses turned in robust performances along with Air and Sea Freight Forwarding. The Trucking business experienced more moderate growth while Contract Logistics revenues contracted by 2% due to continued volume declines in the high-tech industry.

Geodis Bourgey Montreuil (including foreign subsidiaries) operating profit increased in 2006 compared to 2005.

In the rest of Europe revenue grew €32.9m (3.2%) and by 1.8% on a like for like basis. Growth of the increase is attributable to the development of new contracts in Eastern Europe and Germany and to the return to revenue growth in Italy.

Source: Geodis

2005

TNT Freight Management's (TFM) 2005 net revenues were €782m, evenly balanced between air freight (49.8%) and sea freight (37.2%). It was among the top 10 sea freight forwarders and amid the top 20 air freight forwarders.

95% of TFM's net revenues were generated through its own network of offices, covering the Americas (15.6%), Asia/Pacific (20.2%), Scandinavia (44.7%), and Europe and the Middle East (19.5%).

With the acquisition of TFM, GEODIS estimates that it will double its revenue from freight forwarding to about €1.6bn - more than one third of the total revenue of the GEODIS group.

GEODIS will thus position itself among the top 5 freight forwarders in Europe and among the top 10 globally, adding to its existing network significant and complementary positions in Scandinavia, the Americas, (Canada, USA, Argentina, Brazil, and Chile), Australia and New Zealand, and Germany. (See maps in Operations)

Transport Intelligence estimates that the combined new entity will have revenue in excess of €4.4bn, based on 2005 figures, and 26,000 employees around the world and as a result they are considerably expanding their global network and enhancing their range of service offerings.

The acquisition will also balance the portfolio of the Group's activities (Groupage/Express (LTL): 35.5%; freight forwarding: 35.6%; logistics and associated transport: 28.9%).

Integration costs are estimated at €25-30m, and will be primarily incurred in 2007. Expected synergies represent approximately €35m per year, of which a significant portion is expected to impact the results of 2008.

This transaction will be subject to the approval of European competition authorities.

Source: Geodis & TNT Freight Management

• Nordics

• CEMEA

• Americas

• Asia-Pacific

The "Nordics" region, representing TFM's historical business base, generates almost half of its revenue; it covers Sweden, Denmark, Finland, and Norway through 20 directly-owned offices. The two leading countries in the region are Sweden (57%) and Denmark (27%).

The "CEMEA" region represents about 20% of TFM's revenues, with 24 offices covering the Netherlands, the UK, the United Arab Emirates, France, Germany, and Belgium. 

The "Americas" region contributes about 16% of revenues, through 21 offices serving the United States, Brazil, Canada, Chile, and Argentina. The main US offices are in New York, Chicago, Atlanta, and Los Angeles. 

Source: Geodis

2008

The freight forwarding division, including Wilson from February 2007, represents approximately 35% of consolidated revenue with a doubled freight forwarding capacity. During 2007 Geodis Wilson replaced it's network of agents, establishing it's own presence in the United States, South America, India, Australia and New Zealand. The Geodis Wilson network operates directly in 41 countries and has 5,000 employees. The group is split into six geographical regions- Scandinavia, Central Europe & the Middle East, the Americas, Southern Europe & Africa, Northern Asia and Southern Asia and the Pacific (Including the industrial projects businesses). The groups Headquaters is located in Amsterdam, it's strongest geographical regions are those of Asia and Scandinavia.

2008

2008

Up to 2008 the contract logistics division achieved strong growth in France, the Benelux, the Eastern Europe countries and the automotive and reverse logistics sectors. The division reported revenue of €832.7m, an increase of 4.4% on the 2006 result.

2008

The Full Truckload division includes the road transport activities of Geodis Bourgey Montreuil in France and the subsidiaries in Italy, the Netherlands, Germany and Eastern Europe. Growth of the division was accelerated in the latter part of 2007 after the launch of a contract with Nestle Waters.

2009

June - Following investment at locations in Amiens, Chalons en Champagne, Milan and Paris Bonneuil, Geodis Calberson announced that it had made a further investment in property by opening a new facility for the France Express network in Lyon Corbas.

The secure platform, dedicated to national and European express, was located south-east of Lyon, next to the A46 motorway. The site covered an area of 12,000 sqm with 168 gates and could process and sort 2,400 parcels per hour.

The platform would provide daily lines to many destinations throughout Europe as well as enabling next-day delivery before midday to 36,000 cities in France, with 90 daily departures.

The Geodis Group

Groupage

The Groupage division offers three different services: domestic groupage, letters and parcels (in cooperation with La Poste) and international groupage (consolidate shipments of 3 tonnes or less). Within this division the main brands include: Calberson, Bernis, United Carriers, Cavewood, Dusolier, France Express, MG Transport, Teisa, Walbaum, Züst Ambrosetti. Geodis has improved its relative position on the market and strengthened its status as the market leader for this business in France.

Full truckloads

This division deals with the transportation of miscellaneous full loads (Automotive, Press & Airfreight, Bulk Distribution, Chemicals and General Cargo) with operating units in France, Italy, Germany, Belgium and the Netherlands. Its main brands include: Bourgey Montreiul, Sceta Transport and Van der Laan. The pursuit of net sales gains, in particular in its General Cargo and Automotive activities, contributed significantly to a net sales growth of 3%.

Logistics        

The division, which includes Dutch-based Vitesse and Italian Borghi, works for clients from a wide range of industry sectors. It offers services in the inbound, outbound and after sales logistics sectors.

Overseas

The Overseas division is the freight-forwarding unit of Geodis. It recently entered into a global alliance with Rohde & Liesenfeld, a German freight forwarder of a similar size. Geodis during 2003 set up a subsidiary in Indonesia, following agreement with its local partner. The Group's unprofitable and non-strategic logistics operations in Argentina and International Freight Forwarding operations in Mexico were discontinued in 2003. In March 2003, Geodis sold in full its stockholdings in Züst Ambrosetti Far East to the Dachser Group. 

Geodis is mainly a French focused business with over 69% of its revenues generated in France. The Geodis Group is split into six seperate operations which deliver its products and services:

• Geodis BM
• Geodis Calberson
• Geodis Logistics
• Geodis Vitesse
• Geodis Wilson
• Geodis Zust Ambrosetti

Geodis BM

Activites

Full and part truck loads, transport on request, dedicated transport, rentals, direct flows or flows via platforms, distribution and inter-site/Europe rounds.

Key Figures

• 4,000 employees
• Network of 77 operational sites in France and Europe
• Five divisions
• 350,000 sq m of warehousing capacity
• 1,700 tractors
• 400 rigids
• 3,100 semi-trailers (including 800 tankers)
• Activity in the following sectors Chemicals, General Cargo, Mass Distribution, Press and air market, Automobile.

Subsidiaries

• In France : Begey, Beugniet, Foissin, Schuhler & Nestra, Sotrago, Telf, Transeurochem, Transnord.
• Abroad : Belgitrans , Road Flight Systems, Van Der Laan Transport B.V, Bm Deutschland, Bm Espana, Bm Italia.

Geodis Calberson

Activities

Groupage and Express, national and international focused in France.

Key Figures

• 204 branches
• 9,750 Employees
• 4,500 Vehicles
• 28m shipments annually
• Activity in the following sectors: Automotive, publishing, equipment, cosmetics, FMCG, printing, IT, multimedia, healthcare,sport and leisure, wines and spirits, mail order.

Calberson's Main Subsidiaries

Geodis m.g.transports, Geodis Walbaum, Geodis Dusolier Calberson, Geodis MPL

Geodis Logistics

Activities

Global logistics, coordination of procurement flows for distribution: inventory management, order picking, JIT production line deliveries, kitting, customisation, assembly, cross-docking, after-sales management / Europe.

Key Figures

• 6,000 employees
• 150 European platforms
• 3m sq m of wareshousing capacity

Main Subsidiary

Geodis Logistics Euromatic

Geodis Vitesse

Activities

European and national groupage, global logistics, supply chain management, air and sea freight activities focused in the Benelux countries.

Key Figures

• 1,000 employees
• 13 sites
• 90 vehicles
• 11,000 sq m for cross docking
• 284,000 sq m of warehousing capacity
• 6,400 customers

Geodis Wilson

Formerly Geodis and TFM's network coverage is predominantly based in Europe, with an historical focus on Scandinavia through TFM's roots as Wilson Logistics. Geodis had a much more Southern European focus, which leads to a more balanced coverage. 

Both companies had a presence in Asia Pacific across the region. TFM gave Geodis a much greater presence in Australasia and both companies had operations in China. Although it has operations in this growth market, it lacks the scale which many of its competitors possess.

TFM gave Geodis much needed presence in the US and the Latin American region. TFM had offices across the US including the West Coast.  It has also added presence in Brazil, which has a large potential market.

Geodis Zust Ambrosetti

Activties

National and European groupage, air and sea freight activities, logistics, multimodal services focused in Italy.

Key Figures

• 57  national distribution sites
• 11 warehousing sites totalling approximately 1m sq m
• 1,200 employees.

TNT Freight Management Business Overview 2006

TNT established their global freight management capabilities in 2004 with the acquisition of Wilson a freight management business comprising primarily of air and sea freight transportation.   

Prophetically freight management was described as an "attractive standalone business which had economic resilience.”   

In general, freight management operators do not own assets to provide transportation services because they acquire cargo space from airline and shipping firms. The asset-light profile of freight management provides flexibility to adjust to changes in volumes.  

They expected that the addition of freight management capabilities and expertise would enable them to offer knowledge, skills and value added activities to a larger potential customer base while at the same time providing existing customers with a broader service offering. 

At the time the acquisition of Wilson was seen as a major step in TNT becoming a global freight management company and Wilson was re-branded into TNT Freight Management as of July 2005.  

The global network operated from 130 offices in 28 countries with a significant presence in the Nordic region.  They had planned to continue to grow their freight management capabilities organically and increase the density of their operations in the Americas and Asia.  

TNT Freight Management Nordics 2005

In this region (Sweden, Denmark, Finland and Norway) they offered, in addition to air and sea freight services, services tailored to the demands of the marine industry.  They provided freight management services to sailing fleets, shipping companies and ship management companies.  The global fleet of merchant and cruise ships is expanding, which combined with limited shipyard capacity, provides opportunities for freight management operators with marine industry experience.  

They had a broad client base including customers in the automotive, airline, consumer goods, electronics and marine industries.  TNT Freight Management had a significant presence in Sweden and Denmark, which they believed are markets dominated by a few global freight management companies.  The majority of their business is in exports, however, air and ocean import volumes from Asia, particularly China, were strong in 2005. 

TNT Freight Management Europe 2005

In this region (Europe excluding Nordics) they offered sea-air combined services in addition to air and sea freight services.  The sea-air combined service was a time saving and cost saving transport mode for import shipments from 14 countries in the Far East and South-east Asia.  This mode of transportation was faster than sea freight and less costly than airfreight.  They had a broad client base including customers in the automotive, pharmaceuticals, consumer goods, electronics and marine industries. 

Airfreight from Asia continues to increase, which had also resulted in growth in the sea-air service.  Business with several large new customers was started in 2005. This new business had complex traffic flows involving suppliers in multiple European countries. Competition in this region came primarily from freight management companies with large global networks.  

TNT Freight Management Asia/Pacific 2005

The operations in this region were primarily related to air export. Volume growth from China was a significant factor in 2005, and this trend was expected to continue.  New business was obtained from customers in the pharmaceutical and consumer goods industries. They received a trading licence for their Shanghai office that allowed it to arrange shipments directly with air and sea carriers rather than through agents.  They were continuing to pursue trading licences for other areas within China. 

TNT Freight Management Americas 2005

2008

December - SNCF had significantly ramped up its apparent push to try and become as important a player on the global logistics stage as German counterpart and rival Deutsche Bahn.

The group's Transport and Logistics Division business Geodis, which it bought earlier this year after previously being its main shareholder for many years announced it had acquired IBM's internal global logistics operations in an all-cash deal for an undisclosed amount and signed a multi-year outsourcing contract.

Through that contract, stated Geodis, it would be the sole lead logistics provider for IBM, managing approximately €1bn per year of IBM's logistics costs supporting asset recovery services, service parts logistics and flow management of all hardware and software products worldwide.

"This agreement is strategic to reinforce Geodis' position among the world's leading logistics providers capable of delivering end to end solutions to its global clients," claimed Geodis Deputy CEO.

"With this partnership, we will strengthen the skills and expertise required to service both IBM's and our existing and future clients' core logistics needs in more than 120 countries. IBM's global logistics operations will significantly upgrade our services portfolio."

Geodis said it was increasing its investments outside Europe and the new acquisition complemented the company's existing teams. "By leveraging IBM's employees in more than 50 countries across the US, Canada, Latin America, Europe and Asia Pacific, Geodis' service offering will be enhanced with multinational supply chain experts and an established worldwide platform to enable rapid growth and expansion," it claimed.

Geodis said the IBM transaction, which was expected to close in the first quarter of 2009, was subject to the expiration or the early termination of the waiting period under the HSR Act and the issuance by the EC (European Commission) of a decision declaring the transaction compatible with the EC Common Market as well as to applicable regulatory clearance, local agreements and appropriate and required employee information and consultation processes.

SNCF claims that its Transport and Logistics Division is currently the fourth-largest transport and logistics operator in Europe, with annual revenue of €8.5bn.

June - Geodis Wilson, the forwarding division of French European logistics group Geodis, strengthened its growing business in the UK with the acquisition of Oughtred & Harrison Shipping. Geodis Wilson said that the move would boost its ocean export business and extend its global network coverage in China and Benelux.

O&H Shipping was an air and sea freight forwarder with almost 100 employees, mainly based in northern England, but also in Belgium and China. Serving more than 1,900 customers, O&H would deliver about £35m (€44m) to the Geodis group's net sales.

"The O&H acquisition is an important step in our long term growth ambition and strengthens our presence in the market," commented Geodis Wilson. "The eventual merger of our two companies brings us closer to achieving our objective of being a top five freight management company in the UK. Both from a geographical and from a functional point of view, there are no essential overlaps, which will lead into a straight integration process that will be completed within the next 12 months."

According to Geodis Wilson, the combined businesses at current trading will generate over £90m (€112m) in net sales. Together, it added, they had 290 employees based in 14 locations across the UK. 

2007

October - Geodis expanded its freight forwarding capabilities through the purchase of its German partner Rohde & Liesenfeld (finalised in January 2008).  Rohde & Liesenfeld had both a sea freight and air freight business with sales of €270m. Its largest business was in Germany, but it had significant exposure to South America, South Africa and Australia.

Geodis bought a stake in Rohde & Liesenfeld worth €13m in 2002 and paid a further €77m to purchase the rest of the company.

With the purchase of Wilson from TNT, Geodis indicated its intention not only to increase its exposure to freight forwarding but also to expand business outside of France through acquisition. Clearly the acquisition of Rohde & Liesenfeld is part of that strategy. It would also contribute to Geodis' CEO, Pierre Blayau's target of increasing revenue to over €5.5bn by 2008.

This new purchase pushed the 'Freight Management' proportion of Geodis business to over 40%. However its freight management business was still smaller than that of Ceva/EGL or Expeditors, let alone the sector leaders such as DHL or Kuehne + Nagel. However, it re-emphasised that Geodis' ambitions lay in competing with the big diversified Logistics Service Providers.

The German freight forwarder does have a slightly different profile to Geodis. It was heavily engaged in project cargo business for the oil, gas and mining sectors, which were areas that had provided lucrative opportunities to other freight forwarders, notably Panalpina.