Basel, October 15, 2012 - As one of the world's leading providers of supply chain solutions, Panalpina has assumed responsibility for BMW's spare parts logistics operations in Brazil with immediate effect. Panalpina will run a new distribution center for the automotive manufacturer in the country.

The new warehouse, which has been set up exclusively for BMW's operations in the Brazilian market, opened on October 1st 2012. Located at Cajamar near São Paulo, the 10,000 m2 logistics center is a state-of-the-art facility that meets all international safety standards. Apart from services such as goods receipt, storage, order picking and return goods handling, Panalpina will be responsible for order management and spare parts deliveries within Brazil, using its own just-in-time concept. To give BMW full transparency in respect of its automotive component transport chain, Panalpina will also supervise customs clearance for incoming consignments.

The site offers the necessary infrastructure for implementing a successful after-market services strategy. From its Cajamar base, Panalpina is able to serve the entire market and supply BMW spare parts to all Brazilian dealers. "Logistics operations in Brazil are subject to increasingly stringent demands," explains Frank Hofmann, Global Key Account Manager at Panalpina. "We are happy that our supply chain solutions offer BMW an ultramodern platform from which it can readily cater for Brazil's constantly growing automotive market." The new mandate represents a further extension of Panalpina's long-standing partnership with the BMW Group and it is in line with the company’s strategy to increasingly offer Value-Added Logistics Services to its customers.

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Further weakening of Air Freight volumes impacts Panalpina’s profitability

Basel, October 12, 2012 - Preliminary financial figures for the third quarter of 2012 indicate that the EBITDA of the Panalpina Group will come in at between CHF 15 and 20 million, which already incorporates a one-off extraordinary charge of CHF 12 million. Profitability was negatively impacted by disappointingly weak Air Freight volumes (-8% year-on-year) and a higher cost base. In September, the Group recorded particularly low Air Freight volumes.

“After a weak July and an improvement in August, we expected our Air Freight volumes to grow sequentially in September. However, compared to August they came in much weaker than seasonally normal, especially on Europe-related trade lanes,” says Panalpina’s CEO Monika Ribar.

Panalpina’s substantial exposure to air freight and its most important market Europe left its mark on the company’s latest financial results. Panalpina saw significant volume decreases on most European trade lanes, both in import and export. Panalpina’s Air Freight division accounts for almost 50% of the company’s net forwarding revenue and around two thirds of the Air Freight volumes come from trade lanes involving Europe.

Compared to the previous year, particularly Air Freight volumes of major customers in key industries such as high-tech, telecom and chemicals decreased substantially in the third quarter. These three industries alone account for roughly 40% of Panalpina’s Air Freight volumes. On the upside, Panalpina shipped significantly more air freight for its customers in healthcare, oil and gas as well as manufacturing in Q3. The trend towards smaller shipments was accentuated. While the number of handled Air Freight files during the third quarter remained practically unchanged year-on-year, tonnage dropped by 8%.

“During the course of the third quarter it became evident that the expected volume recovery in Air Freight in the second half of 2012 would not materialize,” says Ribar.

While Panalpina began to adapt its workforce to the lower volume environment during the third quarter, the associated cost savings have not yet had a positive effect in that period. Operating expenses increased from the last quarter, partly because of provisions of around CHF 12 million in September for accrued salaries of staff leaving the company. The cost savings are expected to kick in as of the fourth quarter.

The continued increase in Ocean Freight volumes in the third quarter of 2012 could not make up for the weak Air Freight volumes. Based on the preliminary financial figures the Group expects a third quarter EBITDA of CHF 15-20 million.

Detailed financial results and an outlook will be published on November 2, 2012.

The Panalpina Group

The Panalpina Group is one of the world's leading providers of supply chain solutions, combining intercontinental Air and Ocean Freight with comprehensive Value-Added Logistics Services and Supply Chain Services. Thanks to its in-depth industry know-how and customized IT systems, Panalpina provides globally integrated end-to-end solutions tailored to its customers' supply chain management needs. The Panalpina Group operates a global network with some 500 branches in more than 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs approximately 15,500 people worldwide.

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