Kuhne Nagel

Annual Report
2017
Kuehne + Nagel Group Key Data
CHF million 2017 2016 2015 2014 2013 2012 2011
Turnover 22,220 19,985 20,283 21,291 20,929 20,753 19,596

Net turnover 18,594 16,525 16,731 17,501 17,178 17,120 16,218
Gross profit 7,023 6,550 6,251 6,288 6,257 6,094 5,898
In per cent of net turnover 37.8 39.6 37.4 35.9 36.4 35.6 36.4
EBITDA 1,150 1,110 1,041 1,005 962 855 977
EBIT 937 918 850 819 761 633 749
In per cent of gross profit (conversion rate) 13.3 14.0 13.6 13.0 12.2 10.4 12.7
EBT 955 935 878 824 767 644 765
Earnings for the year 740 720 679 644 607 492 605
Earnings for the year (Kuehne + Nagel share) 737 718 676 633 597 484 600
Depreciation, amortisation and impairment
of intangible assets and goodwill 213 192 191 186 201 222 228
Operational cash flow 1,148 1,062 1,045 1,000 966 849 978
Capital expenditures for fixed assets 225 239 241 186 181 163 207
In per cent of operational cash flow 19.6 22.5 23.1 18.6 18.7 19.2 21.2
Total assets 7,457 6,331 6,099 6,603 6,374 6,279 6,141
Non-current assets 2,445 2,209 2,231 2,175 2,133 2,203 2,239
Equity 2,327 2,165 2,126 2,453 2,558 2,425 2,405
In per cent of total assets 31.2 34.2 34.9 37.1 40.1 38.6 39.2
Total employees at year end 75,876 70,038 67,236 63,448 62,744 63,248 63,110
Total full-time equivalents at year end 92,372 85,887 80,056 74,497 72,036 72,399 71,884
Personnel expenses 4,243 3,957 3,741 3,764 3,735 3,606 3,387
Gross profit in CHF 1,000 per FTE 76 76 78 84 87 84 82
Personnel expenses in CHF 1,000 per FTE 46 46 47 51 52 50 47
Basic earnings per share (nominal CHF 1) in CHF

Consolidated earnings for the year
(Kuehne + Nagel share) 1 6.16 5.99 5.64 5.28 4.98 4.05 5.03
2 2
Distribution in the following year 5.75 5.50 5.00 4.00 3.85 3.50 3.85
In per cent of the consolidated
net income for the year 93.3 91.8 88.6 75.8 77.4 86.6 76.7
Development of share price

SIX Swiss Exchange (high/low in CHF) 181/133 144/124 148/118 136/115 122/99 125/95 139/92
Average trading volume per day 206,266 190,820 204,420 149,896 164,482 160,403 170,427
1 Excluding treasury shares.

2 Excluding extraordinary dividend.
CONTENTS
1 STATUS REPORT 37 CONSOLIDATED FINANCIAL

1 Economic Environment STATEMENTS 2017 OF THE
2 Key Financial Figures KUEHNE + NAGEL GROUP
3 Income Statement 37 Income Statement
5 Financial Position 38 Statement of Comprehensive Income
7 Investments, Depreciation and Amortisation 39 Balance Sheet
8 Shareholder Return 41 Statement of Changes in Equity
9 Risk Management 43 Cash Flow Statement
10 Business Units 45 Notes to the Consolidated
Financial Statements
13 CORPORATE GOVERNANCE 58 Other Notes
13 Principles 103 Significant Consolidated
13 Group Structure and Shareholders Subsidiaries and Joint Ventures
14 Capital Structure 111 Report of the Statutory Auditor
15 Board of Directors
24 Management Board 117 FINANCIAL STATEMENTS
26 Shareholders‘ Participation 2017 OF KUEHNE + NAGEL
27 Changes of Control and INTERNATIONAL AG
Defence Measures 117 Income Statement
27 Statutory Auditors 118 Balance Sheet
28 Information Policy 119 Notes to the Financial
Statements 2017
29 REMUNERATION REPORT 120 Notes to the Income Statement
30 Remuneration Components 120 Notes to the Balance Sheet
33 Board of Directors Remuneration 125 Other Notes
35 Management Board Remuneration 127 Report of the Statutory Auditor
35 Other Remuneration
36 Report of the Statutory Auditor 129 CORPORATE TIMETABLE 2018
1 STATUS REPORT
ECONOMIC ENVIRONMENT
In 2017, Kuehne + Nagel expanded its global to a large extent based on improving conditions
leading position in Seafreight with 4.4 million for large commodity shippers and improved
TEUs managed in container traffic. The Group domestic consumption. (Based on: World Bank,
confirmed with 1.6 million tons in Airfreight its Global Economic Prospects, January 2018).
global number 2 position, reported on significant
growth and profitability improvement in Overland In 2017, the international logistics industry expe-
and gained substantial business from high-profile rienced world trade volume growth rebounding
customers in Contract Logistics. from low levels in 2016. The estimated world trade
volume growth increased to 4.7 per cent in 2017
Kuehne + Nagel has specialised in complex end-to- versus 2.5 per cent in 2016.
end supply chain solutions, which are managed in
the global network of Logistics Control Towers and Advanced economies’ world trade volume grew from
performed in cooperation with all Kuehne + Nagel 2.6 per cent in 2016 to estimated 4.1 per cent in
business units. These integrated logistics solutions 2017, whereas in emerging markets and developing
not only increase transparency and efficiency in the economies from 2.3 per cent in 2016 to 5.9 per cent
supply chain but also optimise information flows in 2017. (Based on: IMF, World Economic Outlook
between the participating partners and customers. Update, January, 2018).
This allows Kuehne + Nagel to support its cus-
tomers’ value chain, a decisive factor in a highly On the carrier side, the market in 2017 was
competitive and fast growing market. characterised by highly volatile freight rates as
a result of the continued imbalance of capacity
In 2017, the world economy grew by estimated and demand of carriers and a wave of consoli-
3.0 per cent (2016: 2.4 per cent) due to a recovery dation in the shipping industry.
in industrial activity and a pickup in global trade.
The United States, Japan, China, and especially the Kuehne + Nagel‘s volume growth was signi-
European Union significantly contributed to the ficantly above the market, supported by the
improved global growth, with projections for 2018 improved market dynamics in 2017, resulting in
confirming a solid growth. strong turnover growth of 11.2 per cent. In spite
of margin pressure due to consolidation in the
Mature economies have shown clear indications supplier market and a more competitive market
for stronger momentum in domestic demand environment, the Group was able to increase
and export. Growth for these countries in 2017 gross profit by 7.2 per cent and grew its EBIT by
increased by an estimated 2.3 per cent versus 3.2 per cent in 2017 (excluding negative impacts
1.6 per cent in 2016. of currency translation of 0.4 per cent and
acquisitions of 0.7 per cent). The Group achieved
Emerging markets are estimated to have grown its target of 5.0 per cent EBIT in relation to net
by 3.7 per cent in 2016 and 4.3 per cent in 2017, turnover.
Status Report 2
KEY FINANCIAL FIGURES
CHF million 2017 2016 Variance in

per cent
Turnover 22,220 19,985 11.2

Net turnover 18,594 16,525 12.5
Gross profit 7,023 6,550 7.2
Gross profit in per cent of net turnover 37.8 39.6
EBITDA 1,150 1,110 3.6
EBIT 937 918 2.1
EBIT in per cent of net turnover 5.0 5.6
EBIT in per cent of gross profit 13.3 14.0
Earnings for the year 740 720 2.8
Earnings for the year (Kuehne + Nagel share) 737 718 2.6
Earnings per share (in CHF) 6.16 5.99 2.8
Operational cash flow 1,148 1,062 8.1
Capital expenditures for fixed assets 225 239 –5.9
Total employees at year-end 75,876 70,038 8.3
Total full-time equivalents at year-end 92,372 85,887 7.6
Kuehne + Nagel’s net turnover increased in 2017 in constant currencies and excluding acquisitions by
by CHF 2,069 million or 12.5 per cent and gross CHF 28 million or 3.9 per cent. Capital expenditure in
profit increased by CHF 473 million or 7.2 per cent fixed assets decreased by CHF 14 million or 5.9 per cent
compared to the previous year. to CHF 225 million compared to the previous year.
In 2017, EBIT increased by CHF 19 million or In 2017, the Kuehne + Nagel Group increased
2.1 per cent. At constant exchange rates and ex- the number of employees year-on-year by 5,838 or
cluding acquisitions the increase would have 8.3 per cent from 70,038 to 75,876 employees.
been CHF 29 million or 3.2 per cent. The Group The number of full time equivalents reached 92,372
increased earnings for the year 2017 by CHF versus 85,887, which is an increase of 6,485 or
20 million or 2.8 per cent compared to 2016, 7.6 per cent.
3 Status Report
INCOME STATEMENT
Turnover
In 2017, Kuehne + Nagel’s turnover amounted to increased valuation of the Euro of 2.1 per cent,
CHF 22,220 million representing an increase of a decreased valuation of the US Dollar as well
11.2 per cent or CHF 2,235 million compared to the as dependent currencies and the British Pound
previous year. Organic business growth resulted in an by 0.6 and 5.4 per cent respectively, against
increase in turnover of CHF 2,087 million (10.4 per the Swiss Franc, resulting in a positive impact of
cent) and acquisitions contributed CHF 72 million CHF 76 million (0.4 per cent) of turnover.
(0.4 per cent). The turnover increase was driven by
the significant volume growth in all business units Net turnover
and regions. In 2017, Kuehne + Nagel’s net turnover amounted
to CHF 18,594 million representing an increase of
Volumes in Seafreight increased by 7.5 per cent 12.5 per cent or CHF 2,069 million compared to the
(+ 302,000 TEUs) and turnover per TEU increased previous year. Organic business growth resulted
by 2.7 per cent to CHF 2,022 per TEU (2016: in an increase in net turnover of CHF 1,982 million
CHF 1,969). In Airfreight, the volume increase was (12.0 per cent) and acquisitions contributed CHF
20.4 per cent (+ 266,000 Tons), and the freight 72 million (0.4 per cent). The exchange rate fluc-
rate increase was at 0.4 per cent per 100 kg to tuation had a positive impact of CHF 15 million
CHF 303 (2016: CHF 302). These were the main (0.1 per cent).
contributors to the turnover growth, followed by
volume increases in Overland and Contract Logistics. At a regional level, EMEA (11.8 per cent), the Ame-
ricas (14.2 per cent) and Asia-Pacific (12.9 per cent)
At a regional level, Europe, Middle East, Central reported an increased net turnover in 2017.
Asia and Africa “EMEA” (11.2 per cent), the Americas
(12.8 per cent) and Asia-Pacific (7.8 per cent) repor- Gross profit
ted an increased turnover in 2017. Gross profit reached CHF 7,023 million in 2017,
which represents an increase of 7.2 per cent or CHF
Exchange rate fluctuations between 2016 and 2017, 473 million compared to the previous year. Organic
based on average yearly exchange rates, led to an business growth resulted in an increase in gross profit
Regional turnover Regional gross profit
CHF million 2017 2016 2015 2014 CHF million 2017 2016 2015 2014
22,220 19,985 20,283 21,291 7,023 6,550 6,251 6,288
7,000
Asia-Pacific 711
Asia-Pacific 2,417
2,239 666
2,254 20,000 Americas 1,357 629 567 6,000
Americas 5,454 2,243
4,714 1,244
1,151 1,010
5,027
4,834 5,000
15,000 EMEA 4,955
4,640 4,711
EMEA 14,349 14,338 4,471 4,000
12,908 13,002
10,000 3,000
2,000
5,000
1,000
0 0
Status Report 4
Operational expenses Operational cash flow
5,886 5,482 5,211 5,306 1,148 1,062 1,045 1,000
Communication,
travel and selling
expenses 167
Admin. expenses 231 160 1,000
151 150
Vehicle and 485 215
204 218 5,000
operational expenses 444
448 485
Facility expenses 760 750
706 4,000
Personnel expenses 4,243 667 689
3,957
3,741 3,764
3,000
500
2,000
250
1,000
0 0
of CHF 453 million (6.9 per cent), mainly in the busi- EMEA generated the largest EBITDA contribution
ness unit Contract Logistics (+ CHF 340 million), with CHF 675 million (58.7 per cent), followed by the
and exchange rate fluctuation had a negative Americas with CHF 246 million (21.4 per cent), and
impact of CHF 9 million (0.1 per cent). Acquisitions Asia-Pacific with CHF 229 million (19.9 per cent).
contributed CHF 29 million (0.4 per cent). The
positive effect from volume growth in Sea and EBIT ⁄ Earnings for the year
Airfreight was partially offset by lower yields in a In 2017, earnings before interest and tax (EBIT)
competitive market environment with increasing increased by CHF 19 million to CHF 937 million
supplier rates. (2016: CHF 918 million). The increase was mainly
due to higher contribution from the organic business
At a regional level, EMEA (6.8 per cent), the Ame- by CHF 29 million, whereas the business from
ricas (9.1 per cent) and Asia-Pacific (6.8 per cent) acquisitions had a negative impact of CHF 6 million,
reported an increased gross profit in 2017. mainly due to the amortisation of other intangibles
of CHF 8 million; the exchange rate development
Operational cash flow had a negative impact of CHF 4 million. The EBIT
The operational cash flow, the sum of the net income margin to net turnover for the Group has decreased
for the year plus/minus non-cash-related trans- to 5.0 per cent compared to 5.6 per cent in 2016.
actions, increased by CHF 86 million to CHF 1,148 EBIT in per cent of gross profit (conversion rate),
million in 2017 (for further information, please refer an important KPI for the Group, decreased from
to the cash flow statement in the Consolidated 14.0 per cent in 2016 to 13.3 per cent in 2017.
Financial Statements 2017 on page 43).
In 2017, the region EMEA contributed CHF 523 million
EBITDA (55.8 per cent) to the Group’s EBIT, followed by Asia-
In 2017, earnings before interest, tax, depreciation, Pacific with CHF 210 million (22.4 per cent), and the
amortisation and impairment of property, plant and Americas with CHF 204 million (21.8 per cent).
equipment, goodwill and other intangible assets,
increased by CHF 40 million or 3.6 per cent compa- Earnings for the year 2017 increased by CHF
red to the previous year; EBITDA of organic business 20 million to CHF 740 million compared to the
increased by CHF 42 million, acquisitions contributed previous year’s CHF 720 million, whereby the margin
CHF 2 million, and negative exchange rate develop- decreased to 4.0 per cent (in per cent of net turn-
ment accounted for EBITDA of CHF –4 million. over) compared to the previous year’s 4.4 per cent.
5 Status Report
EBITDA EBIT
1,150 1,110 1,041 1,005 937 918 850 819
1,000 1,000
750 750
500 500
250 250
0 0
Earnings for the year were positively impacted by FINANCIAL POSITION

the tax reform in the USA and the Group expects a In 2017, total assets and liabilities of the Group
positive impact on the effective tax rate based on increased by CHF 1,126 million to CHF 7,457 million
the above for 2018. compared to 2016. The amount of cash and cash
equivalents decreased by CHF 127 million, mainly
due to changes in working capital through volume
Earnings for the year growth and rate increases in Sea and Airfreight.
For details of changes in the balance sheet and cash
CHF million 2017 2016 2015 2014 flow statement, please refer to the Consolidated
740 720 679 644 Financial Statements.
800 Trade receivables amounting to CHF 3,537 million

represent the most significant asset of the Kuehne +
Nagel Group. The days of trade receivables out-
600
standing increased by December 2017 to 53.9 days
compared to 46.6 of December 31, 2016, reflecting
an increasingly higher pressure from customers for
400
longer credit terms.
200
As of December 31, 2017, the equity of the Group
increased by CHF 162 million to CHF 2,327 million,
which represents an equity ratio of 31.2 per cent
0 (2016: 34.2 per cent).
Status Report 6
Developments of other key financial indicators on

capital structure are shown in the following table:
Kuehne + Nagel Group key figures on capital structure
Key figures on capital structure 2017 2016 2015 2014 2013
1
Equity ratio (in per cent) 31.2 34.2 34.9 37.1 40.1
2
Return on equity (in per cent) 32.1 32.8 28.7 24.9 23.9
3
Debt ratio (in per cent) 68.8 65.8 65.1 62.9 59.9
4
Short-term ratio of indebtedness (in per cent) 60.5 55.7 55.3 52.7 51.0
5
Intensity of long-term indebtedness (in per cent) 8.3 10.1 9.9 10.2 8.8
6
Fixed assets coverage ratio (in per cent) 120.5 126.9 122.2 143.6 146.3
7
Working capital (in CHF million) 502 595 496 949 988
8
Receivables terms (in days) 53.9 46.6 44.4 44.4 43.2
9
Vendor terms (in days) 69.0 60.2 55.1 54.9 52.6
10
Intensity of capital expenditure (in per cent) 32.8 34.9 36.6 32.9 33.5
1 Total equity in relation to total assets at the end of the year.

2 Net earnings for the year in relation to share capital + reserves + retained earnings as of January 1 of the current year less dividend
paid during the current year as of the date of distribution + capital increase (incl. share premium) as of the date of payment.
3 Total liabilities – equity in relation to total assets.
4 Short-term liabilities in relation to total assets.
5 Long-term liabilities in relation to total assets.
6 Total equity (including non-controlling interests) + long-term liabilities in relation to non-current assets.
7 Total current assets less current liabilities.
8 Turnover in relation to receivables outstanding at the end of the current year.
9 Expenses for services from third parties in relation to trade liabilities/accrued trade expenses at the end of the current year.
10 Non-current assets in relation to total assets.
Assets Liabilities
7,457 6,331 6,099 6,603 7,457 6,331 6,099 6,603
Equity (incl. non-

Non-current assets 2,445 7,000 controlling interests) 2,327 7,000
2,175 Provisions for pension 2,453

2,209 6,000 plans and severance 2,165 6,000
2,231 2,126
payments
5,000 Deferred and 5,000

Receivables and other 430
current income
current assets 4,292
tax liabilities 261
3,258 4,000 4,000
Bank and other 18 407 448
3,281 387
3,027 interest-bearing 273 232
liabilities 248
3,000 15 18 30 3,000
2,000 2,000
1,170 1,000 1,000

Cash and cash
841 841 Trade and other
equivalents 720
liabilities 4,421 3,471 3,320 3,440
0 0
7 Status Report
INVESTMENTS, DEPRECIATION Investments in fixed assets/depreciation

AND AMORTISATION
In 2017, the Kuehne + Nagel Group invested a CHF million 2017 2016 2015 2014
total of CHF 225 million (2016: CHF 239 million)

in fixed assets. Investments in properties and
buildings amounted to CHF 48 million (2016: 161
400
Depreciation 172
CHF 42 million), of which the most substantial 137
amount into a new large-scale pharma logistics faci-

136 300
lity in Moehlin, Switzerland, and CHF 177 million
(2016: CHF 197 million) were invested in other 241
239
Investments 225
fixed assets, operating and office equipment. 200
186
All capital expenditure in 2017 was financed

100
through operational cash flow.
In 2017, the following major investments were 0
made in properties and buildings:
Location CHF million Centres
Moehlin, Switzerland 15 Construction of a large-scale pharma logistics facility

Geel, Belgium 7 Expansion of a logistics facility
Mississauga, Canada 7 Construction of a built-to-suit warehouse
Bremen, Germany 6 Construction of a new office building
Various locations 13
Total 48
The allocation of investments in other fixed assets, opera-

ting and office equipment by category is as follows:
CHF million 2017 2016
Operating equipment 74 93
Vehicles 13 16
Leasehold improvements 46 43
IT hardware 34 34
Office furniture and equipment 10 11
Total Group 177 197
Status Report 8
The allocation by region is as follows:
EMEA 116 151

Americas 40 26
Asia-Pacific 21 20
Total Group 177 197
The allocation by business unit is as follows:
Seafreight 19 19
Airfreight 18 22
Overland 23 31
Contract Logistics 117 125
Total Group 177 197
Depreciation and amortisation in 2017 amounted The Group continued to operate an asset-light
to CHF 213 million and was allocated in the income business model and invests only into strategically
statement as indicated in notes 26 and 27 to the important locations with high demand for state
Consolidated Financial Statements. of the art logistic space.
SHAREHOLDER RETURN
Dividend earnings for the year attributable to the equity

For 2017 the Board of Directors is proposing a divi- holders of the Company. Based on the share price at
dend amounting to CHF 5.75 per share for approval year-end 2017 the dividend yield on the Kuehne +
at the Annual General Meeting. If the dividend pro- Nagel share is 3.2 per cent (2016: 3.7 per cent).
posal is approved by the shareholders, the dividend
payment on the shares will amount to CHF 688 Total Shareholder Return for the year 2017 has
million (2016: CHF 658 million) resulting in a payout been the highest in the last 5 years with CHF 43.40
ratio of 93.3 per cent (2016: 91.8 per cent) of the per share.
Share price and market capitalisation (December 31)
Share price and market capitalisation 2017 2016 2015 2014 2013
Share price (in CHF) 172.50 134.60 137.80 135.30 117.10

Market capitalisation (in CHF million) 20,700 16,152 16,536 16,236 14,052
9 Status Report
Total shareholder return development
in CHF 2017 2016 2015 2014 2013
Increase/(decrease) of share price year over year 37.90 –3.20 2.50 18.20 7.10
Dividend per share 5.50 5.00 7.00 5.85 3.50
Total return 43.40 1.80 9.50 24.05 10.60
in CHF 2017 2016 2015 2014 2013
45.00
40.00 Dividend per share 5.50
35.00 Increase/(decrease) of the share price 37.90

year over year
30.00
25.00
5.85
20.00
15.00 18.20
10.00
3.50
7.00
5.00 7.10
5.00
0.00 2.50
–3.20
–5.00
RISK MANAGEMENT,
OBJECTIVES AND POLICIES
Group risk management A risk is defined as the possibility of an adverse

Risk management is a fundamental element of the event which has a negative impact on the achieve-
Group’s business practice on all levels and is em- ment of the Group’s objectives.
bedded into the business planning and controlling
processes of the Group. Material risks are monitored The Group carries out an annual risk assessment and
and regularly discussed within the Risk and Com- in conformity with the Swiss Code of Best Practice for
pliance Committee and the Audit Committee of the Corporate Governance, the Group’s risk management
Board of Directors. system covers both financial and operational risks.
The Risk and Compliance Committee headed by Risk management as an integral part of the Inter-
the CEO and having the CFO, the Chief Compliance nal Control System (ICS) for financial reporting
Officer, the Head of Internal Audit, and the Group Risk management is incorporated within the ICS.
General Counsel as members, monitors the risk pro- Preventive, risk-mitigating measures to control risks
file of the Group and the development of essential are proactively taken at different levels and are an
internal controls to mitigate these risks. integral part of management responsibility.
Status Report 10
Risk assessment in 2017 the Risk Assessment Guideline defining risk groups
An independent risk assessment procedure was and sub-groups, the structure and the process of
adopted for operational risks. The Regional Manage- risk assessments. The risk catalogue is reviewed
ment was interviewed in order to assess the risks for regularly and critical analysis ensures a continuous
each country in their respective region. In addition, development of the risk management system.
Management Board members assessed the overall
strategic risk exposure of the Group. Within the Summarised assessment of the risk situation
framework of the Corporate Governance process, the In 2017 no significant risks were identified that
updated risk assessment was then presented to the would have the potential to substantially negatively
Audit Committee of the Board of Directors. impact the Group and its future development.
The most material risks remain the uncertainty of
Financial risks analysis and assessment were carried the global economic development, the geopolitical
out by the finance and accounting department. instability, volatile currency fluctuations and the
financial markets, thus being in the constant focus
The following risk areas have been identified amongst of the management.
others for which mitigating actions have been
implemented:
BUSINESS UNITS
— Financial
risks such as development of interest
rates, credit and financial markets and currency The main contributor to the Group’s result remains
risks are constantly monitored and controlled by the business unit Seafreight, whereby in 2017 major
the corporate finance and accounting department. profitability improvements were generated in the
— The continuing challenges of the global and Airfreight, Overland, and Contract Logistics business
macroeconomic developments as well as the units.
uncertainties in the financial markets. These are
managed by appropriate risk diversification and Seafreight
avoidance of regional and industry clustering. Seafreight volumes increased by 7.5 per cent to
— Risks related to IT network availability, IT data 4,355,000 TEUs exceeding market growth estimated
and security are managed by the permanent moni- at 4 to 5 per cent and further solidified the Group’s
toring of systems, redundant infrastructure as well global leadership in Seafreight. Services for tempe-
as interlinked data centers with back-up structures rature controlled cargo in reefer containers and the
and business continuity plans. Less-than-Container Load (LCL) business have signi-
— The increase of regulations, growing complexity ficantly contributed to the growth. Customers from
and customer expectations have led to rising the pharma and healthcare industry use Kuehne +
security requirements and risks; such risks and Nagel to handle temperature-sensitive products.
requirements are considered in the planning of The US import from and export to Europe trades
supply chain solutions and worldwide operation. contributed to the strong volume growth. However,
— Organised crime, terrorism, legal and non-comp- the effects of the continuing consolidation in the
liance risks such as fraud, intentional and unin- shipping industry and margin pressure from compe-
tentional violations of the law and internal regu- tition impacted Kuehne + Nagel negatively. Despite
lations are counteracted by comprehensive and further productivity increases, EBIT in 2017 declined
worldwide staff training and a network of com- by 7.0 per cent compared to the previous year, while
pliance officers at regional and national levels. the ratio of EBIT to gross profit (conversion rate) dec-
lined slightly to 29.2 per cent (2016: 31.4 per cent)
Organisation of risk management due to difficult market conditions, but is still amongst
A continuous dialogue between the Management the leading levels in the industry.
Board, Risk and Compliance Committee and Audit
Committee ensures the Group’s effective risk manage- It remains the Group’s target to achieve growth
ment. The risk management system is governed by rates that are substantially above market growth.
11 Status Report
Simultaneously the Group’s focus is on the ments. The Group has a long-standing track record
Sea and Airfreight profitability and continuous in achieving year-over-year cost per unit improve-
efficiency gains through productivity improvements.
Seafreight volumes: Market growth ~ 4–5% Performance Seafreight
TEUs ’000 Kuehne + DHL* Panalpina DSV CHF million 2017 2016 2015
Nagel
Turnover 8,805 7,981 8,739

3,500
+7.7% Net turnover 6,583 5,814 6,406
9M 2017 3,000
Gross profit 1,416 1,416 1,381
9M 2016 +7.2% 2,500
EBITDA 437 465 485
2,000
EBIT 414 445 459
1,500
EBIT in per cent of gross profit
+3.9% +7.2%
1,000 (conversion rate) 29.2 31.4 33.2
500 Number of operating staff 9,543 9,154 8,792
0 TEUs '000 4,355 4,053 3,820

* S eafreight export TEUs not separately reported.
Source: quarterly publications
Airfreight services for temperature-sensitive goods, pharmaceu-

Airfreight increased volumes by 20.4 per cent to tical and perishables products. Profitability in 2017
1,570,000 tons, thus strengthening the Group’s posi- remained at an industry leading 30.2 per cent (2016:
tion as the number two global airfreight provider. 30.9 per cent) EBIT-to-gross profit margin as volume
Acquisitions, including Commodity Forwarders Inc. growth more than compensated margin dilutions.
(CFI), a company based in Los Angeles (USA), which EBIT improved by 5.0 per cent compared to the
was consolidated as of October 2, 2017, contributed previous year.
2.3 per cent to the year-to-date volume growth.
The focus on industry-specific Airfreight services like The Group has developed in various strategic pro-
KN EngineChain, a specialised service for production, grammes world class expertise in industry and product-
spare parts, and maintenance of aircraft engines for specific supply chain services. Organic growth in areas
the Aerospace industry has significantly contributed such as perishables, pharma and aerospace logistics,
to this success. Substantial new business has been together with selected bolt-on acquisitions continue
gained through Kuehne + Nagel‘s state of the art to ascertain the Group’s leading position.
Airfreight volumes: Market growth ~10% Performance Airfreight
Tons ’000 Kuehne + DHL Panalpina DSV CHF million 2017 2016 2015
Nagel
Turnover 4,759 3,935 4,014

1,800
+9.6%
1,600
Net turnover 4,080 3,347 3,424
1,400 Gross profit 1,036 964 904
+19.1% 1,200 EBITDA 333 315 286
9M 2017 1,000
EBIT 313 298 265
9M 2016 +7.9% 800
EBIT in per cent of gross profit
600
+10.9% (conversion rate) 30.2 30.9 29.3
400
200
Number of operating staff 6,693 5,734 5,563
0 Tons '000 1,570 1,304 1,250
Source: quarterly publications
Status Report 12
Overland
Overland increased its net turnover in 2017 by 2.4 per cent. EBIT increased to CHF 49 million
7.6 per cent with strong performance of its land (2016: CHF 28 million). With the expansion of
transport activities within Europe. The key perfor- services in Overland to industry-specific solutions,
mance indicator EBITDA to net turnover margin Overland has significantly contributed to the success
was with 3.0 per cent above the previous year’s of the Group’s integrated logistics offering.
Performance Overland
CHF million 2017 2016 2015
Turnover 3,356 3,130 2,825

Net turnover 3,117 2,898 2,589
Gross profit 952 895 834
EBITDA 92 70 50
EBIT 49 28 7
EBIT in per cent of gross profit (conversion rate) 5.1 3.1 0.8
Contract Logistics
The focus on specialised end-to-end solutions for Kuehne + Nagel further strengthened its global lea-
industries such as automotive, high-tech, consumer ding position in the field of integrated logistics with
goods, aerospace, pharmaceuticals, healthcare, and increased contract volumes and improved profitabi-
e-commerce fulfilment led to numerous new customer lity. The Group offers specialised end-to-end supply
contracts. This resulted for 2017 in a (net of currency chain management solutions, which are managed
impact) net turnover growth of 8.0 per cent. More from the Logistics Control Towers and performed
than 100 new logistics projects were implemented for with other business units, supporting customers
customers in 2017, enabling the company to manage to improve their value chain. Integrated Logistics
10.6 million square meters of warehouse and logistics experts develop, implement and manage solutions
space worldwide. Continuous process improvements that streamline the supply chain to make it lean,
in 2017 led to an increase of the EBITDA to net agile and demand-driven.
turnover margin to 6.0 per cent versus 5.8 per cent
in 2016 and an increase of EBIT by 9.5 per cent.
Performance Contract Logistics
CHF million 2017 2016 2015
Turnover 5,300 4,939 4,705

Net turnover 4,814 4,466 4,312
Gross profit 3,619 3,275 3,132
EBITDA 288 260 220
EBIT 161 147 119
EBIT in per cent of gross profit (conversion rate) 4.4 4.5 3.8
Warehousing and logistics space in sqm 10,631,779 10,021,688 9,556,477
Idle space in sqm 283,690 364,035 335,453
Idle space in per cent 2.7 3.6 3.5
13 CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Kuehne + Nagel is committed to good corporate governance which is an integral
part of the management culture of the Kuehne + Nagel Group (the Group).
Corporate Governance guides the structure and operational practices within the
Group. It aims at creating sustainable value for all stakeholders and safeguards the
management’s decision-making capability and efficiency. Accountability through
clearly assigned duties to the Boards and Committees and transparency in financial
reporting ensure that the Group acts responsibly.
PRINCIPLES Additionally, operating performance is presented in

The principles of corporate governance, as defined the following geographical regions:
in the Directive on Information Relating to Corporate
— Europe, Middle East, Central Asia and Africa (EMEA)
Governance (RLCG) of the SIX Swiss Exchange, are
— Americas
the basis for the Articles of Association, the Organi-
— Asia-Pacific
sational Rules, and the Committee Regulations of
the holding company of the Group, Kuehne + Nagel Business performance is reported according to this
International AG, Schindellegi (Feusisberg), Switzer- operational structure. For further information on the
land (the Company). The Group follows best practice business units, please refer to the “Status Report”
recommendations and standards established in the and the “Consolidated Financial Statements” respec-
“Swiss Code of Best Practice for Corporate Gover- tively.
nance”.
Listed companies of the Group
The Articles of Association (AoA) and the Code of Kuehne + Nagel International AG, the ultimate
Conduct are available on Kuehne + Nagel’s website holding company, is the only company listed on the
under the following link: http://www.kn-portal.com/ Stock Exchange within the scope of the Group’s
about_us/investor_relations/corporate_govern- consolidation. Kuehne + Nagel International AG
ance/ has its registered office in Schindellegi (Feusisberg),
Switzerland, and its shares are listed on the SIX
Swiss Exchange, Zurich. The Company’s market
GROUP STRUCTURE AND SHAREHOLDERS capitalisation amounted to CHF 20,700 million
Under Swiss company law the Group is organised (120 million registered shares of nominal value
as a limited company that has issued shares of CHF 1 at CHF 172.50 market value per share) on
common stock to shareholders. Kuehne + Nagel the closing date December 31, 2017.
International AG is the ultimate holding company
of the Group. Of the total Kuehne + Nagel International AG share
capital on the closing date:
Operational group structure
— the free float consisted of 55,769,036 shares
Kuehne + Nagel’s operating businesses are organised
= 46.5 per cent, and
into the following four business units:
— treasury shares consisted of 330,964 shares
= 0.2 per cent
— Seafreight
— Airfreight Kuehne + Nagel International AG shares are traded
— Overland under the symbol “KNIN”, the security number is
— Contract Logistics 2,523,886 and ISIN is CH0025238863.
Corporate Governance 14
Non-listed companies in the Group‘s consolidation is divided into 120 million registered shares of a
The main subsidiaries and associated companies of nominal value of CHF 1 each.
the Group are disclosed in appendix “Significant
consolidated subsidiaries and joint ventures” to the Authorised and conditional share capital
Consolidated Financial Statements (pages 103 to The Annual General Meeting held on May 3, 2016,
110), including particulars as to the country, name extended its approval of authorised share capital up
of the company, location, share capital, and the to a maximum of CHF 20 million by a further two
Group’s stake in per cent. years until May 3, 2018.
Major shareholders The Annual General Meeting held on May 2, 2005,

According to the share register as of December 31, approved a conditional share capital increase up
2017, the following registered shareholders held to a maximum of CHF 12 million and to add the
more than three per cent of the total share capital respective section in the Articles of Association.
of Kuehne + Nagel International AG:
The Annual General Meeting held on May 8, 2012,
—K uehne Holding AG, Schindellegi (Feusisberg), approved a conditional share capital up to a maxi-
Switzerland, held 53.3 per cent; all voting rights mum of CHF 20 million for the provision of the em-
of Kuehne Holding AG are held by Klaus-Michael ployee share-based compensation plans of the Com-
Kuehne. pany. The Annual General Meeting held on May 5,
— Kuehne Foundation, Schindellegi (Feusisberg), 2015, approved a reduction of this conditional share
Switzerland, held 4.7 per cent. capital from CHF 20 million to CHF 2 million.
In addition, disclosure notifications pertaining So far no use has been made of these rights. There
to shareholdings in excess of three per cent in is no resolution of the Board of Directors outstand-
Kuehne + Nagel International AG that were filed ing for further issuance of either authorised or
with the Company and the SIX Swiss Exchange conditional capital.
were:
A description of the group of beneficiaries and of
— BlackRock Inc. the terms and conditions of the authorised and
conditional share capital can be found in the
Notifications are published on the SIX Swiss Articles of Association, Art. 3.3, 3.4 and 3.5, which
Exchange electronic publication platform, are available on the Company website (http://
and can be accessed via the following link: www.kn-portal.com/about_us/investor_relations/
https://www.six-exchange-regulation.com/en/ corporate_governance).
home/publications/significant-shareholders.html
Change in capital over the past three years
On December 31, 2017, shares of unregistered owners During the years 2015 through 2017 no changes in
amounted to 19 per cent of the issued shares. capital occurred other than related to authorised
and conditional share capital as outlined above.
Cross-shareholdings
On the closing date there were no cross-sharehold- Shares and participating certificates
ings in place. On the closing date, 120 million registered shares
of a nominal value of CHF 1 each were outstanding.
At the same date, no participating certificates were
C APITAL STRUCTURE outstanding.
Ordinary share capital on the closing date Profit sharing certificates

The ordinary share capital of Kuehne + Nagel There were no profit sharing certificates outstanding
International AG amounts to CHF 120 million and at the closing date.
15 Corporate Governance
Limitations on transferability 1966–1975 Chief Executive Officer of the Group

and nominee registrations 1975–1992 Delegate and member of the
Each share has one vote. All shares have equal Board of Directors
voting rights, and no preferential rights or similar 1992–2009 Executive Chairman of the Board
entitlements exist. The Articles of Association do not of Directors
provide for any limitations on the transfer of shares. Chairman of the Nomination
Nominees are entered in the share register only and Compensation Committee
upon their written agreement to declare the names, 2009–2011 Chairman of the Board of Directors
addresses, and shareholdings of the respective per- Chairman of the Nomination
sons, on whose account they are holding shares. and Compensation Committee
2010–2011 Chairman of the Chairman’s
Convertible bonds and warrants/options Committee
No convertible bonds, warrants or options were out- 2011–today Honorary Chairman of Kuehne +
standing as at the closing date other than related Nagel International AG
to the Group’s Employee Share Purchase and Option Member of the Board of
Plan (SPOP). For details of the Group’s Employee Directors elected until the Annual
SPOP, please refer to note 36 of the Consolidated General Meeting 2018
Financial Statements on pages 85 to 87. Member of the Chairman’s
Committee
Member of the Nomination and
BOARD OF DIRECTORS Compensation Committee elected
At the Annual General Meeting of May 9, 2017, until the Annual General
Klaus-Michael Kuehne, Dr. Joerg Wolle, Karl Meeting 2018
Gernandt, Dr. Renato Fassbind, Juergen Fitschen,
Hans Lerch, Dr. Thomas Staehelin, Hauke Stars, and Dr. Joerg Wolle, Chairman,
Dr. Martin Wittig were re-elected to the Board of German/Swiss, 1957
Directors for a one-year term. Dr. Joerg Wolle was Holds a PhD in engineering sciences. Since March
re-elected Chairman of the Board of Directors for a 2017 he is Chairman of the Board of Directors of
one-year term. DKSH Holding Ltd, Zurich, Switzerland, where he
served as President and CEO since 2000. Since June 6,
On the closing date the Board of Directors comprised 2013, Dr. Joerg Wolle is member of the Board of
nine members. Their biographical particulars are as Directors of the Kuehne Holding AG, Schindellegi
follows: (Feusisberg), Switzerland.
Other significant activities: Member of the Board of
Klaus-Michael Kuehne, Honorary Chairman, Directors of Diethelm Keller Holding Ltd., Switzerland.
German, 1937
Commercial apprenticeship in banking industry. 2010–2012 Member of the Board of
Other significant activities: Chairman of the Board Directors
of Trustees of the Kuehne Foundation, Schindellegi 2011–May 2016 Chairman of the Nomination
(Feusisberg), and the Klaus-Michael Kuehne Founda- and Compensation Committee
tion, Hamburg; Member of the Supervisory Board of 2013–May 2016 V ice Chairman of the Board of
Kuehne Logistics University GmbH (KLU), Hamburg. Directors
May 2016–today Chairman of the Board of Direc-
Positions within the Kuehne + Nagel Group: tors elected until the Annual
1958 Entrance into the family General Meeting 2018
business followed by various Chairman of the Chairman’s
management positions Committee
Karl Gernandt, Vice Chairman, German, 1960 Chairman of the Nomination

After graduating as Master in business administra- and Compensation Committee
tion at the University of St. Gallen, Switzerland, Karl elected until the Annual General
Gernandt worked for Deutsche Bank AG from 1988 Meeting 2018
to 1996. There he held positions in corporate and/ Member of the Chairman’s
or retail banking in Germany, Asia and the USA. Committee
From 1997 to 1999 he set his mark on the Financial
Institution Group of A.T. Kearney GmbH. In 1999, Dr. Renato Fassbind, Swiss, 1955
Karl Gernandt moved to Holcim (Deutschland) AG After graduating from his studies in economics at
as CFO, in 2000, he was appointed CEO and at the the University of Zurich, Dr. Renato Fassbind worked
same time member of the European Board of Holcim as an assistant in the “Institut für Schweizerisches
Ltd, Switzerland. In 2007, he became CEO of Holcim Bankwesen” at the University of Zurich between
Western Europe, Brussels. On October 1, 2008, Karl 1979 and 1982. In 1984 he joined Hoffmann-
Gernandt has been nominated as Delegate and as La Roche AG in Basel and advanced to the Head
of May 2016 as Executive Chairman of the Board of of Internal Audit. In 1990 he joined ABB AG being
Directors of Kuehne Holding AG, Schindellegi (Feusis- the Chief Financial Officer from 1997 until 2002;
berg). He is also member of the Board of Trustees of from 2002 until 2004 he was the Chief Executive
the Kuehne Foundation, Chairman of the Supervisory Officer of Diethelm Keller Group, Zurich. In 2004
Board of Kuehne Logistics University GmbH (KLU), Dr. Renato Fassbind joined the Credit Suisse Group
Hamburg, and member of the Board of Trustees of as the Chief Financial Officer of Credit Suisse Group
the Klaus-Michael Kuehne Foundation in Hamburg. AG and Credit Suisse AG until October 2010. In this
Other significant activities: Member of the Board of function he was a member of the Executive Boards
Directors of Hapag-Lloyd AG, Hamburg; Member of of Credit Suisse Group AG and of Credit Suisse AG
the Board of Directors of HSV Fussball AG, Ham- since 2004.
burg; Member of the Board of Directors of VTG AG, Other significant activities: Vice Chairman of the
Hamburg. Board of Directors of Swiss Re Ltd., Zurich; Member
of the Board of Directors of Nestlé S.A., Vevey.
Positions within the Kuehne + Nagel Group:
2008–2011 Member of the Board of Directors Positions within the Kuehne + Nagel Group:
2009–2011 Executive Vice Chairman 2011–today Member of the Board of
and Delegate of the Board of Directors elected until the Annual
Directors General Meeting 2018
2009–today Member of the Audit Committee 2011–today Member of the Audit Committee
May–Aug 2013 Chief Executive Officer (CEO)
of the Group Juergen Fitschen, German, 1948
2011–May 2016 Executive Chairman of the Board Trained as a wholesale and export trader, then
of Directors graduated in business administration from Hamburg
Chairman of the Chairman’s University. Juergen Fitschen started his career in 1975
Committee at Citibank in Hamburg. In 1983 he was appointed
Member of the Nomination and member of the Executive Committee of Citibank
Compensation Committee Germany. In 1987 he joined Deutsche Bank and after
May 2016–today Vice Chairman of the Board of various management positions in Thailand, Japan,
Directors elected until the Annual Singapore and UK he was appointed member of
General Meeting 2018 the Management Board in 2001 responsible for
“Corporate and Investment Bank”. Juergen Fitschen Dr. Thomas Staehelin, Swiss, 1947
left the Management Board in 2002 and became Holds a Ph.D. in law from the University of Basel;
a member of the newly created Group Executive Lawyer. Dr. Thomas Staehelin is a Swiss Corporate
Committee of Deutsche Bank until its resolution in and Tax Attorney and Partner in the Basel-based law
2015. In 2004 he took over the responsibilities as firm Fromer Advokatur und Notariat.
Global Head of Regional Management and CEO of Other significant activities (among others):
Deutsche Bank Germany. In 2009 he rejoined the Vice Chairman of the Board of Directors of Kuehne
Management Board of Deutsche Bank AG retaining Holding AG, Schindellegi (Feusisberg) and of Kuehne
both responsibilities. Juergen Fitschen was Co-Chair- Foundation; Member of the Board of Directors and
man of the Management Board of Deutsche Bank AG Chairman of the Audit Committee of Inficon Holding
from June 1, 2012 until his departure on May 19, AG, Bad Ragaz; Member of the Board of Directors of
2016. Since June 1, 2016 he has served as a Senior Swissport International Ltd, Opfikon and of Rezidor
Advisor of Deutsche Bank AG. Hotel Group AB, Stockholm; Chairman of the Board
Other significant activities: Chairman of the Super- of Directors of Scobag Privatbank AG, Basel; Chair-
visory Board of Ceconomy, Duesseldorf; Member of man of the Board of Directors of Lantal Textiles AG,
the Board of Directors of Cura Vermoegensverwaltung Langenthal and of Stamm Bau AG, Arlesheim.
GmbH & Co. KG, Hamburg.
Positions within the Kuehne + Nagel Group: 1978–today Member of the Board of
2008–2009 Member of the Economic Council Directors elected until the Annual
2008–today Member of the Board of General Meeting 2018
Directors elected until the Annual 2006–today Chairman of the Audit
General Meeting 2018 Committee

Hans Lerch, Swiss, 1950 Hauke Stars, German, 1967
Commercial apprenticeship in the travel and Engineering degree in applied computer science
tourism industry with a 35-year career at Kuoni from Otto-von-Guericke University in Magdeburg,
Travel Holding Ltd. Assignments in the Far East from MSc by research in Engineering from University of
1975–1985, President and CEO from 1999–2005. Warwick, Coventry. Since December 2012 Hauke
Chairman and CEO of SR Technics in Zurich from Stars is member of the Executive Board, Deutsche
2005-2008. Boerse AG. She started her professional career in
Other significant activities: Executive Vice Chair- 1992 at Bertelsmann mediaSystems GmbH, Gueters-
man of Abercrombie & Kent Group of companies, loh, Germany. From 1998 to 2004 she worked for
London; Member of the Board of Directors of Best of ThyssenKrupp Information Systems GmbH, Krefeld,
Switzerland Tours, Zurich; Chairman of the Board of renamed to Triaton GmbH in 2000. In 2004 Hauke
Trustees of the move>med Foundation, Zurich. Stars joined Hewlett Packard Netherlands B.V.,
Utrecht, as member of the Country Management
Positions within the Kuehne + Nagel Group: Board. From 2007 to 2012 she was Managing
2005–today Member of the Board of Director of Hewlett Packard Switzerland GmbH and
Directors elected until the Annual Country Manager Enterprise Business.
General Meeting 2018 Other significant activities: Member of the Super-
2006–today Member of the Nomination and visory Board of Eurex Frankfurt AG; Member of
Compensation Committee the Supervisory Board of Fresenius SE & Co. KGaA;
elected until the Annual General Member of the Supervisory Board of Clearstream
Meeting 2018 International S.A., Luxembourg; Member of the
Board of Directors of Eurex Zuerich AG; Member of The Articles of Association (AoA) of Kuehne + Nagel
the Regional Advisory Council of Deutsche Bank International AG limit the number of mandates that
AG; Member of the Senate of National Academy of members of the Board of Directors may hold outside
Science and Engineering (acatech); Member of the the Kuehne + Nagel Group. Article 21 of the AoA
Executive Committee of Deutsches Aktieninstitut limits the maximum number of permitted additional
e.V.; Member of the Executive Committee of Frank- mandates of members of the Board of Directors to
furt Main Finance e.V. 25 board memberships, whereof no more than four
may be held in stock-listed companies. Mandates in
Position within the Kuehne + Nagel Group: companies, which are controlled by Kuehne + Nagel
May 2016–today Member of the Board of or which control Kuehne + Nagel, are not subject to
Directors elected until the this limitation. In addition, members of the Board
Annual General Meeting of Directors may hold no more than 25 mandates
2018 at Kuehne + Nagel’s request, and no more than 25
mandates in associations, charitable organisations,
Dr. Martin C. Wittig, German, 1964 foundations, trusts, and employee welfare founda-
Studies in mining engineering and business admini- tions.
stration at RWTH Aachen followed by a Ph.D. in
engineering at the Technical University of Berlin. Election and duration of tenure
After his studies he worked as a lecturer at the The General Meeting elects the members of the
Technical University of Berlin and in project finance Board of Directors as well as the members of the
for the mining industry. In 1995 he joined Roland Compensation Committee individually. The General
Berger Strategy Consultants and was elected Partner Meeting elects one of the members of the Board of
in 1999. In 2001 he became Managing Partner and Directors as Chairman of the Board of Directors. The
Head of Roland Berger’s office in Zurich and was duration of tenure of the Chairman, the members
elected to the global Executive Committee in 2003, of the Board of Directors, and the members of the
where he held the position as CFO. From 2010 to Compensation Committee ends at the conclusion
2013 he was Global Managing Partner and CEO of of the next ordinary General Meeting. Re-election is
Roland Berger Strategy Consultants. Currently he possible.
advises CEOs of leading international companies.
Other significant activities: Adjunct lecturer at the Internal organisation, Board committees
University of St. Gallen and Member of the HSG and meetings in 2017
Honorary Advisory Board. Honorary Consul of The Chairman of the Board of Directors and the
Germany in Switzerland. Member of the Supervisory members of the Compensation Committee are elected
Board and Chairman of the Audit Committee of by the General Meeting. The Board of Directors
UBS SE, Frankfurt. constitutes itself and appoints the Vice Chairman,
the Chairman of the Nomination and Compensation
Positions within the Kuehne + Nagel Group: Committee, the members of the Nomination Com-
2014–today Member of the Board of mittee as well as the Chairman and the members of
Directors elected until the Annual the Audit and the Chairman’s Committee.
General Meeting 2018
May 2016–today Member of the Audit Committee The scope of responsibilities of the Board of
Directors, the Chairman and the Vice Chairman
All members of the Board of Directors are non-exe- are stipulated in the Articles of Association, the
cutive directors, none of them serves as a member Organisational Rules, and the Committee Rules, in
of the Management Board and with the exception particular, to the extent not already determined by
of the Honorary Chairman, Klaus-Michael Kuehne, applicable law. In accordance with the Articles
none of them has important business connections of Association and Swiss corporate law, the main
with Kuehne + Nagel. tasks and responsibilities of the Board of Directors,
as further defined in the Organisational Rules, com- — s upervision towards the Management Board and
prise the following: the internal audit;
— supervision of compliance with internal regula-
— the ultimate management of the Company tions and directives regarding general manage-
— issuance and review of business policies and ment, organisation and quality;
guidelines especially regarding the strategic direc- — nomination of external consultants, in case of
tion and management of the Company as well as significant fees;
any changes thereof; — definition of the corporate identity;
— establishment of the organisation, determination — approval of significant purchases, sales and lend-
of the main organisational topics and conduct of ings on securities or similar titles;
the business including the issuance of the Organi- — approval of significant transactions outside the
sational Rules for the Board of Directors and the normal course of business;
Management Board; — review of the yearly budgets as well as any supple-
— approval and regular monitoring of the main elements, consolidated or per country and business
ments of Corporate Governance considering the field;
applicable laws and provisions for listed compa- — approval of significant credit limits to customers
nies in Switzerland; and other debtors;
— monitoring, assessment and control of risks; — supervision of management and approval of
— nomination of the external auditors; settlement of significant litigations, legal cases,
— determination of accounting and financial control arbitrations and other administrative proceedings;
structure, as well as the financial planning and — approval of appointments and dismissals of
dividend policies; regional presidents;
— approval of budgets, capital commitments and — approval of significant senior management remu-
accounts; nerations.
— approval of interim financial statements and the
annual report; The Board of Directors usually convenes for a two-
— the ultimate supervision of the Management day meeting quarterly with the Management Board
Board, in particular in view of compliance with being represented by the CEO and the CFO. The
the law, Articles of Association, and internal regu- Board of Directors can invite other members of the
lations and directives; Management Board to attend these meetings at
— appointing and dismissing of Management Board its discretion. The Board of Directors has appointed
members and other senior executives; a Secretary, who is not (and does not need to be) a
— preparation of the Annual General Meeting member of the Board of Directors.
including submission of proposals and the imple-
mentation of its resolutions; The Board of Directors takes decisions during
— maintainance of the share register. the meetings or by written circular resolutions. All
Committees meet as often as required but usually
Dr. Joerg Wolle is the Chairman of the Board of quarterly.
Directors, and Klaus-Michael Kuehne is Honorary
Chairman of Kuehne + Nagel International AG. The Audit Committee
entire Board of Directors, however, is responsible The Audit Committee consists of three to five
for decisions on such above-mentioned aspects non-executive, predominantly independent members
that are of significant importance to the Group. of the Board of Directors elected for a period of one
Certain tasks of the Board of Directors have been year. Re-election as a member of the Audit Commit-
delegated to the Chairman and comprise the tee is possible. Members of the Management Board
following: cannot be members of the Audit Committee.
As part of the regular contacts between the Audit — t he evaluation of the recommendations made by
Committee and both the internal and external the external auditors and review of actions, if any;
auditors, the quality and effectiveness of the — t he proposal to the Board of Directors regarding
internal control mechanisms and the risk assessments the nomination of the independent external audi-
are reviewed and evaluated continously on the basis tors for approval by the Annual General Meeting;
of written reports of the internal audit department as — t he approval of the audit fees invoiced by the
well as of management letters of the external auditors external auditors.
based on their interim audits. Furthermore, a regular
contact with the external auditors throughout the year With regards to the internal audit function of the
enables the Audit Committee to obtain knowledge of Group, the Audit Committee has the following
problem areas at an early stage. This allows proposing responsibilities:
the timely introduction of any corrective actions to the
Management Board. — issuance of regulations and directives;
— review of the audit plan and findings, if any;
Dr. Thomas Staehelin was the Chairman of the Audit — e valuation of recommendations made by the
Committee on the closing date, and Karl Gernandt, internal auditors and discussion with the
Dr. Renato Fassbind, and Dr. Martin C. Wittig were Management Board;
members. — p roposal for the nomination of the Head of
Internal Audit;
The Audit Committee holds at a minimum four — a ssessment of the performance of the Group’s
meetings a year, usually quarterly before the internal audit function.
publication of the financial results. The Honorary
Chairman can take part in the meetings as an With regards to the tasks of the Management
advisor. Unless otherwise determined by the Audit Board the Audit Committee has the following
Committee, the CEO, the CFO and the auditor in responsibilities:
charge take part in all meetings, whilst the Head
of Internal Audit, and the Group General Counsel — r eview and evaluation of annual and interim
or the Chief Compliance Officer, each, are invited financial statements in respect to compliance with
as advisors whenever needed. In 2017 the auditor accounting policies and any changes thereof,
in charge attended three meetings of the Audit going concern assumption, adherence to listing
Committee. The Committee’s Chairman informs regulations, and material risks;
the other members of the Board of Directors about — r ecommendation to the Board of Directors for
the topics discussed in detail and decisions to be approval of the financial statements;
submitted to the entire Board of Directors for — a ssessment of existence and effectiveness of the
approval. Group’s internal control system;
— a ssessment of the fiscal situation of the Group
The main responsibilities of the Audit Committee and reporting to the Board of Directors.
with regards to the external auditors are:
Chairman’s Committee
— securing of a comprehensive and efficient audit The Chairman’s Committee consists of the Chairman,
concept for the Kuehne + Nagel Group; the Vice Chairmen and the Honorary Chairman of the
— commenting on the audit planning and findings, Board of Directors for the period of their tenure in the
if any; Board of Directors. The Chairman’s Committee advises
the Board of Directors on the financial performance consists of two to six members of the Board of
of the Group, its economic development and measures Directors elected at the Annual General Meeting
of optimisation as well as of any other significant (Compensation Committee) on the one hand and
developments within the Group. In its advisory role designated by the Board of Directors (Nomination
the Chairman’s Committee reports to the Board of Committee) on the other hand, each for a period
Directors for decisions. of one year and meeting regularly as one joint
Committee. On the closing date December 31, 2017,
The Chairman’s Committee has the following Karl Gernandt was the Chairman of the Nomina-
responsibilities: tion and Compensation Committee; Klaus-Michael
Kuehne and Hans Lerch were members.
— e valuate significant capital expenditures and
acquisitions of the Kuehne + Nagel Group which On invitation of the Chairman, the Nomination
are subject to approval of the Board of Directors; and Compensation Committee convenes as often
— any matters of significance that require the as business requires but at least three times a
approval of the Board of Directors can be year, usually quarterly. Members of the Manage-
discussed by the Chairman’s Committee and ment Board can take part in the Nomination
subsequently be submitted to the Board of and Compensation Committee meetings by
Directors for resolution. invitation.
On the closing date, Dr. Joerg Wolle was the Chair- The Nomination and Compensation Committee sup-
man of the Chairman’s Committee and Klaus-Michael ports the Board of Directors with the determination
Kuehne and Karl Gernandt were members. and validation of the remuneration policy, defines
the remuneration concepts, and the principles of
On invitation of the Chairman, the Chairman’s remuneration for the members of the Board of Direc-
Committee convenes as often as business requires tors and the Management Board. The principles
but typically four times a year, once each quarter. of remuneration, post-employment benefits and
The Committee invites Members of the Management share-based compensations are reviewed annually.
Board at its discretion, being usually represented The Nomination and Compensation Committee
by the CEO and the CFO, to attend these meetings. discusses the amounts of compensation for each
member of the Board of Directors individually,
The Board of Directors is informed by the Chairman evaluates the performance of each member of the
of the Chairman’s Committee about all issues dis- Management Board and recommends their remu-
cussed, in particular, about all topics that need neration. The General Meeting approves the maxi-
approval of the Board of Directors. mum total remuneration of the Boards.
Nomination and Compensation Committee The Nomination and Compensation Committee has
The Nomination and Compensation Committee the following responsibilities:
— d efinition and validation of the remuneration tion components of the Management Board;
policy and concepts; — a pproval of share-based compensation plans
— definition of the principles of remuneration for for the Management Board and other selected
the members of the Board of Directors and the employees;
Management Board; — preparation of the remuneration report.
— nomination of competent staff of the Manage-
ment Board; The Nomination and Compensation Committee
— yearly review of the individual performance of develops guidelines and criteria for the selection of
members of the Management Board; candidates and reviews new candidates to ensure
— approval of terms and conditions of employment competent staffing of the Management Board.
of the members of the Management Board;
— determination and approval of pension schemes; The Chairman of the Nomination and Compensation
— approval of mandates outside the Kuehne + Nagel Committee informs the Board of Directors about all
Group by members of the Management Board; issues discussed, in particular, about all topics that
— determination of the variable and fixed remunera- need approval by the Board of Directors.
Board and committees: Membership, attendance, number and duration of meetings
Board and committees Board of Audit Chairman’s Nomination and

Directors Committee Committee Compensation
Committee
Number of meetings in 2017 4 5 6 4

Approximate duration of each meeting 8 hours 4 hours 4 hours 3 hours
Klaus-Michael Kuehne 4 – 6 4
Dr. Joerg Wolle 4 – 6 –
Karl Gernandt 4 5 6 4
Dr. Renato Fassbind 4 5 – –
Juergen Fitschen 4 – – –
Hans Lerch 4 – – 4
Dr. Thomas Staehelin 4 5 – –
Hauke Stars 4 – – –
Dr. Martin C. Wittig 4 5 – –
Rules of competence between the Board of concerned, the Chairman of the Board of Directors
Directors and the Management Board overlooks the responsibilities of the assigned mem-
The Board of Directors executes the non-transferable bers of the Management Board of the Kuehne +
and inalienable duties of the ultimate management Nagel Group. As per the Organisational Rules the
of the Group. As far as the non-transferable and responsibilities and competences relating to the
inalienable duties of the Board of Directors are not operational management are transferred to the
Management Board. The Management Board is the latter of which is consisting of the CEO and the
responsible for the development, execution, and CFO, the Chief Compliance Officer, the Corporate
supervision of the day-to-day operations of the Head of Internal Audit and the Group General
Group and the Group companies to the extent they Counsel. The risk management system within the
are not incumbent on the Annual General Meeting, Group covers both financial and operational risks.
the Statutory Auditor, the Board of Directors, or the
Chairman of the Board of Directors by applicable Risk management is part of the Internal Control
law, by the Articles of Association, or by the Organi- System (ICS). Preventive and risk-reducing measures
sational Rules. The Organisational Rules define to control risks are proactively taken on different
which businesses can be approved by the Manage- levels and are a fundamental part of the manage-
ment Board and which ones require the approval ment responsibility. The finance and accounting
of the Chairman of the Board of Directors or the department conducts, in collaboration with regional
Board of Directors pursuant to approval requirements management and the Management Board, a risk
based on the extent and nature of the respective assessment at least once a year. Details on risk
business. management, including identified risks, are provi-
ded in the Status Report on pages 9 to 10.
Information and control system
of the Management Board Compliance
The Management Board informs the Board of Direc- Integrity as key element of business behaviour
tors on a regular and timely basis about the course creates trust amongst business partners. Therewith
of business primarily by means of a comprehensive the Group is able to carry the responsibility as a
financial Management Information System (MIS) reliable and successful business partner. The
report which provides monthly worldwide consoli- Chairman of the Board of Directors and the CEO
dated results by segment and country including issued an updated release of the KN Ethics &
comparative actual, budgeted and prior-year figures Compliance Programme in December 2017. This
as well as consolidated Balance Sheet and Cash KN Ethics & Compliance Programme includes clear
Flow analysis. and consistent guidance for policies and procedures,
providing guidance for legal, regulatory, and other
The CEO and the CFO are generally invited to meet- compliance requirements, as well as global communi-
ings of the Board of Directors, the Audit Commit- cation and training initiatives. Ongoing compliance
tee as well as to the meetings of the Chairman’s live and computer-based trainings resume to form
Committee. Members of the Management Board can key elements to ensure that members of all levels of
take part in Nomination and Compensation Commit- the Group are and remain adequately knowledgeable
tee meetings by invitation. and skilled to apply the KN Ethics & Compliance
Programme in their day-to-day work. This includes
Risk Management top-down KN Code of Conduct live trainings as well
Risk management is a fundamental element of the as comprehensive live anti-bribery, anti-corruption,
Group’s business practice at all levels and covers and anti-trust training initiatives. The Group
different types of risks. At Group level, risk manage- encourages employees to raise concerns of potential
ment is an integral part of the business planning violations of the KN Code of Conduct, amongst other
and controlling processes. Material risks are moni- channels, to a global 24/7 Confidential Reporting
tored and regularly discussed with the Audit Line enabling reports in a safe, confident and, if
Committee or the Risk and Compliance Committee, desired, anonymous manner.
The Kuehne + Nagel Group applies a risk-based Positions within the Kuehne + Nagel Group:
Integrity Due Diligence (“IDD”) process for evaluat- 2013–2015 Executive Vice President
ing business partners. Contract Logistics of the Group
12.05.2016-
Internal Audit 30.09.2016 Executive Vice President
The Internal Audit function reports directly to the Airfreight of the Group
Chairman of the Board of Directors about ongoing 2013–today Chief Executive Officer (CEO) of
activities and audit reports and acts under the the Group
supervision of the Audit Committee. Kuehne + Chief Executive and Chairman
Nagel’s Internal Audit is an independent, objective of the Management Board of
assurance and consulting activity that assists the Kuehne + Nagel International AG
Management to exercise their responsibilities
efficiently by assessing the adequacy and effective- Markus Blanka-Graff, Austrian, 1967
ness of internal controls. Graduated as Master in Economics from Vienna
University of Business and Economics.
MANAGEMENT BOARD Positions within the Kuehne + Nagel Group:

On the closing date, the biographical particulars of 1996–2006 Various Management positions
the Management Board members are as follows: in Finance
2006–2009 Regional CFO North West Europe
Dr. Detlef Trefzger, German, 1962 2009–2014 Director of Corporate Finance &
Dr. Detlef Trefzger studied at Muenster and Kingston Investor Relations
upon Hull and attained a degree in Business Manage- 2014–today Chief Financial Officer (CFO) of
ment by Vienna University of Business and Economics. the Group
In 1989 he started his career as a Project Manager,
Industrial & Building Systems Group at Siemens AG, Lothar Harings, German, 1960
Erlangen, Germany. In 1994 he joined Roland Berger Lawyer (assessor iur.). Various national and in-
& Partner, Munich, Germany, as a Principal in the ternational management positions with Siemens,
Competence Center Transportation & Logistics. From amongst others, Vice President Human Resources
1999 to 2003 he worked as a Member of the Board Siemens AG for Enterprise & International HR ICN
and CFO of the region South East Europe at Schenker from 1998 to 2002. Member of the Management
& Co AG, Vienna, Austria. From 2004 to October 2012 Board of T-Mobile International. Responsible for
Dr. Detlef Trefzger was a Member of the Executive Global Human Resources with T-Mobile AG and
Board of Schenker AG, Essen, Germany, and responsible Deutsche Telekom from 2002 until March 2009.
for Global Contract Logistics/Supply Chain Manage- Other significant activities: Member of the aca-
ment. In addition, he was Executive Vice President demic advisory board of Bonner Akademie, Bonn;
Global Air Freight and Global Ocean Freight in 2012. National Curator of Deutsches Komitee of AIESEC
Other significant activities: Board Member of the e. V., Bonn; Member of the Board of Directors of
Singapore Economic Development Board, Singapore. WHU Foundation, Vallendar.
Positions within the Kuehne + Nagel Group: 2011–2013 Regional Manager Kuehne +
2009–today Chief Human Resources Officer Nagel North West Europe
(CHRO) of the Group 2013–2016 Regional Manager Kuehne +
2010–today Corporate Secretary Nagel Western Europe
2016–today Executive Vice President
Martin Kolbe, German, 1961 Airfreight of the Group
Graduated computer scientist. Positions in IT man-
agement including CIO with Deutsche Post World Horst Joachim (Otto) Schacht, German, 1959
Net (DPWN) from 2002 to 2005, responsible for Graduated as a shipping agent. From 1978 to 1997
DHL Europe and DHL Germany as well as member of he held various positions globally with Hapag-Lloyd,
the Supervisory Board in several DPWN-associated including three years in the United States as Trade
companies. Manager Far East-Europe.
Position within the Kuehne + Nagel Group: Positions within the Kuehne + Nagel Group:
2005–today Chief Information Officer (CIO) 1997–1999 Member of the Management
of the Group Board of Kuehne + Nagel
Germany, responsible for
Stefan Paul, German, 1969 Seafreight
After completing an apprenticeship as a freight for- 1999–2011 Senior Vice President Global
warder he started his career with Kuehne + Nagel in Seafreight
1990 where he held various positions in Sales and 2011–today Executive Vice President
Operations. In 1997 he joined Deutsche Post DHL, Seafreight of the Group
Germany, as General Manager for Key Accounts and
Industry Sectors, and worked in various management Gianfranco Sgro, Italian, 1967
positions until he became CEO of DHL Freight, Germany, Graduated as Electronic Engineer from Turin
in February 2010. In February 2013 Stefan Paul joined Polytechnic University. Gianfranco Sgro started his
Kuehne + Nagel as a Member of the Management career in 1992 as a Project Manager at TNT Express.
Board, responsible for the Business Unit Overland. From 1995 to 2006 he held various national and
international positions with TNT Logistics (Opera-
Positions within the Kuehne + Nagel Group: tional Director in Brazil, President and Managing
1990–1997 Various management positions Director South America, President and Managing
in Sales and Operations Director Italy). From 2006 until 2012 he was nomi-
2013–today Executive Vice President Overland nated Regional President South Europe, Middle
of the Group East and Africa with CEVA. From 2012 to 2014 he
worked as South America Chief Operating Officer
Yngve Ruud, Norwegian, 1964 with Pirelli. In February 2015 Gianfranco Sgro joined
Graduated from the Norwegian School of Manage- Kuehne + Nagel as a Member of the Management
ment. Board, responsible for the Business Unit Contract
Logistics.
1990–1996 Operational and Finance Mana- Position within the Kuehne + Nagel Group:
ger Kuehne + Nagel Norway 2015–today E xecutive Vice President
1997–2011 Managing Director of Kuehne + Contract Logistics of the Group
Nagel Norway
The Articles of Association (AoA) of Kuehne + Nagel Registered shares may only be represented by
International AG limit the number of mandates persons who are entered in the share register as
that members of the Management Board may hold shareholders or beneficiaries who have a written
outside the Kuehne + Nagel Group. Article 21 of power of attorney. Individual companies, partner-
the AoA limits the maximum number of permitted ships or legal entities may arrange to be represented
mandates of members of the Management Board to by legal representatives or representatives pursuant
five board memberships, whereof no more than one to the Articles of Association or by other authorised
may be held in a stock-listed company. Each man- representatives, married persons by their spouse,
date requires the approval of the Board of Directors. minors and persons in guardianship by their legal
Mandates in companies, which are controlled by representative, even if their representatives are not
Kuehne + Nagel or which control Kuehne + Nagel, shareholders. Each shareholder may also arrange to
are not subject to this limitation. In addition, mem- be represented by the elected independent proxy.
bers of the Management Board may hold no more
than 25 mandates at Kuehne + Nagel’s request, and Statutory quorums
no more than 25 mandates in associations, charitable In general, the legal rules on quorums and terms
organisations, foundations, trusts, and employee apply. The following shall require a resolution to
welfare foundations. be passed by the General Meeting by at least two
thirds of the voting rights represented and by a
Compensation, shareholdings and loans majority of the nominal value of the shares repre-
All details regarding compensation, shareholdings sented:
and loans are set forth in the separate Remunera-
tion Report on pages 29 to 35 and in the Consoli- — The introduction of voting shares;
dated Financial Statements, note 49, on page 100 — the introduction or removal of actual restrictions
and listed furthermore in note 12 to the Financial on the transferability of registered shares;
Statements of Kuehne + Nagel International AG on — the restriction or cancellation of subscription rights;
pages 125 to 126. — the conversion of registered shares into bearer
shares or of bearer shares into registered shares;
— the dismissal of more than one quarter of the
SHAREHOLDERS’ PARTICIPATION members of the Board of Directors.
Restrictions and delegation of voting rights Calling of an Annual General Meeting

Each share has one vote. All shares have equal The calling of an Annual General Meeting is defined
voting rights, and no preferential rights or similar by law. The agenda contains any item submitted by
entitlements exist. the Board of Directors. In particular, this includes
information for the appointment of new members to
For resolutions concerning the discharge of the the Board of Directors or the Nomination and Com-
members of the Board of Directors, persons who pensation Committee and, in the event of changes
currently take part in the company’s management to an Article of Association, the announcement of
in any manner do not have a voting right. the new wording.
Agenda of the Annual General Meeting STATUTORY AUDITORS

Shareholders owning shares with a total nominal
value of at least CHF 1 million can request that Duration of the mandate and
items be added to the agenda up to 45 days prior term of office of the lead auditor
to the date fixed for the Annual General Meeting Ernst & Young Ltd (EY), Zurich, as Kuehne + Nagel’s
by submitting details of their proposals in writing. auditor started in 2013. The auditor in charge is
Christian Krämer. The re-election for the financial
Registration of shareholders year 2017 was confirmed at the Annual General
into the share registers Meeting held on May 9, 2017, and with the letter
Registered shares can only be represented at the of acceptance signed on November 22, 2017.
Annual General Meetings by either shareholders or
beneficiary owners whose personal particulars and The rotation sequence of the auditor in charge is
size of shareholdings have been entered in the seven years and thus corresponds with the legal
KNI share register. Such shareholders and/or bene- rule.
ficiary owners who are not in a position to attend
the Annual General Meeting are entitled to nomi- Audit fees
nate a representative by written proxy. According to the Group’s financial records the
fees charged for auditing services for the year
The share register remains closed for any movements 2017 amounted to CHF 3.7 million (2016:
during six calendar days preceding and including CHF 3.6 million).
the date of the Annual General Meeting.
Additional fees
In addition to the fees mentioned above, the statu-
CHANGES OF CONTROL AND tory auditors are asked on a very restrictive basis
DEFENCE MEASURES to provide certain consulting services beyond the
annual audit mandate. In 2017 an amount of CHF
Duty to make an offer 0.3 million (2016: CHF 0.3 million) was incurred
There are no opting-out or opting-in rules provided mainly related to tax consultancy mandates.
for in the Articles of Association.
Supervisory and controlling instruments
Clauses on changes of control towards the statutory auditors
No member of either the Board of Directors or the The work performed by the external statutory audi-
Management Board or other senior management tors is supervised, controlled, and duly monitored
staff has clauses on change of control in their by the Board of Directors’ Audit Committee. The
employment contracts. statutory auditors report to the Audit Committee
regularly, and in 2017 the auditor in charge at- Interested parties can subscribe to the Group’s free
tended three Audit Committee meetings in person. email news service under http://www.kn-portal.
In 2017 the auditor in charge also attended one com/about_us/media_relations/news/subscribe_
meeting of the Board of Directors. The main criteria to_news/
for the selection of the external audit company are
its worldwide network, its reputation, and pricing. The Annual Report covering the past financial
year is available for download under http://
www.kn-portal.com/about_us/investor_relations/
INFORMATION POLICY annual_reports
The Kuehne + Nagel Group strives for ensuring a Kuehne + Nagel publishes its quarterly financial
comprehensive and consistent information policy. data on the website (http://www.kn-portal.com/
The ambition is to provide analysts, investors and about_us/investor_relations/financial_results_
other stakeholders with high levels of transpar- presentations). Prior to the first quarterly results
ency that meet best practice standards accepted being released the financial calendar is published
worldwide. announcing the dates of the upcoming quarterly
reports as well as of the Annual General Meeting
To this end, Kuehne + Nagel uses print media and, (http://www.kn-portal.com/about_us/investor_
in particular, its website where up-to-date infor- relations/financial_calendar).
mation is available. This information contains an
overall presentation of the Group, detailed financial The contact address for Investor Relations is:
data as well as information on environmental and
safety matters, which are the main elements of the Kuehne + Nagel Management AG
corporate sustainability efforts. The Group aims Investor Relations
for an integral approach to economic, ecologic and Dorfstrasse 50
social responsibility. Furthermore, Kuehne + Nagel P.O. Box 67
provides up-to-date information on significant, CH-8834 Schindellegi
business-related occurrences and organisational Switzerland
changes, and updates all general information Phone: +41 (0)44 786 95 61
regarding the Company on a continuous basis.
All press releases are posted on the website when In addition, the most updated and detailed infor-
released and can be viewed and downloaded under mation on the Group, its service offering and contact
the following link: http://www.kn-portal.com/ details are available under http://www.kuehne-
about_us/media_relations/news/ nagel.com.
29 REMUNERATION REPORT
REMUNERATION REPORT
Kuehne + Nagel’s performance-oriented remuneration system aims to create
long-term incentives for its employees in order to ensure sustainable success of the
Company and add value for its shareholders.
This remuneration report describes the principles and components of the

remuneration of Kuehne + Nagel’s Board of Directors and Management Board and
contains information about the amount of remuneration paid to and accrued for.
Introduction
This remuneration report complies with the Ordinance The Articles of Association of Kuehne + Nagel Inter-
against Excessive Compensation in Listed Stock Com- national AG are available under the following link:
panies (Ordinance), the Swiss Code of Best Practice http://www.kn-portal.com/about_us/investor_
for Corporate Governance and the Swiss Code of relations/corporate_governance/.
Obligations, as well as with the relevant rules in the
SIX Swiss Exchange Ltd.’s Directive on Information Remuneration principles
Relating to Corporate Governance. To maintain Kuehne + Nagel’s position as one of the
world’s leading logistics providers and to ensure the
At the Annual General Meeting 2017, as in the pre- Group’s sustained success, it is critical to attract and
vious year, the shareholders of Kuehne + Nagel Inter- retain best-in-class executives. The Group is committed
national AG individually elected the members of the to a remuneration model that reflects changes in
Board of Directors, the Chairman, the members of the the level of management compensation to be in line
Compensation Committee as well as the independent with corresponding changes in compensation of the
proxy. The Annual General Meeting (AGM) on May 9, Group.
2017, furthermore approved each of the total aggre-
gate remuneration amounts for the members of the The remuneration policy of the Group aims to
Board of Directors for the period until the next ordi- ensure the generation of sustainable earnings and
nary AGM, and for the members of the Management shareholder value for the Group and consists of the
Board regarding the fiscal year 2018. following key principles:
As per the Articles of Association the AGM votes — Balance between short-term and long-term
annually and with prospectively binding effect on incentive components
the approval of the remuneration of the Board of — Pay for performance
Directors and the Management Board, respectively. In — Align management’s interests with those of
addition, the Remuneration Report is being presented the shareholders
to shareholders at the AGM for a consultative vote.
Remuneration Report 30
Determination of remuneration The Nomination and Compensation Committee

The Nomination and Compensation Committee sup- develops guidelines and criteria for the selection of
ports the Board of Directors with the determination candidates and reviews new candidates according
and validation of the remuneration policy, defines to these guidelines to ensure competent staffing of
the remuneration concepts, and the principles of the Management Board.
remuneration for the members of the Board of
Directors and the Management Board. The princip- The Chairman of the Nomination and Compensation
les of remuneration, post-employment benefits and Committee informs the Board of Directors about
share-based compensations are reviewed annually. all issues discussed, in particular, about all topics
The Nomination and Compensation Committee that need approval by the Board of Directors.
discusses the amounts of compensation for each
member of the Board of Directors individually,
evaluates the performance of each member of the REMUNERATION COMPONENTS
Management Board and recommends their remu-
neration. The General Meeting approves the maxi- Board of Directors
mum total remuneration of the Boards. The Chairman and the members of the Board of
Directors receive a fixed compensation as well as a
The Nomination and Compensation Committee has compensation for their participation in committees
the following responsibilities: in cash. These fixed amounts of compensation are
defined in a discretionary way, in line with market
— d efinition and validation of the remuneration conditions.
policy and concepts;
— definition of the principles of remuneration for Until May 3, 2016, the Executive Chairman of the
the members of the Board of Directors and the Board of Directors received a cash compensation
Management Board; with a fixed and a variable component. The variable
— nominating competent staffing of the Manage- part of remuneration was calculated based on an
ment Board; individually defined percentage of the adjusted
— yearly review of the individual performance of Group’s net earnings (adjusted for additional good-
members of the Management Board; will amortisation and digressive bonus eligibility).
— approval of terms and conditions of employment He was eligible to participate in the Group’s share-
of the members of the Management Board; based compensation plans (see below comment for
— determination and approval of pension Management Board).
schemes;
— approval of mandates outside the Kuehne + The Executive Chairman of the Board participated
Nagel Group by members of the Management in an employee pension fund that covered the fixed
Board; cash compensation with age-related contribution
— determination of the variable remuneration of rates, of which 25 per cent were borne by the em-
the Management Board; ployee and 75 per cent by the employer.
— approval of share-based compensation plans
for the Management Board and other selected Management Board
employees; The members of the Management Board receive a
— preparation of the remuneration report fixed salary, a variable remuneration component,
31 Remuneration Report
and are eligible to participate in the Company’s of the remuneration components are disclosed in
share-based compensation plan. The actual ratios the Management Board remuneration table.
Component type Fixed component Variable remuneration component Share-based compensation plans
(short-term incentive) (mid to long-term incentive)
Description
Fixed salary (cash) based on Individually defined percentage of Share Matching Plan (described)
scope, complexity and market the Group’s adjusted net earnings with a three-year vesting period.
value of the role as well as skills (adjusted for additional Goodwill The Group matches the shares
and performance of the individual amortisation and digressive invested by the employee at
Board Member bonus eligibility) based on scope, market rate. The share match ratio
complexity and market value of (between 0.2 and 1.0) depends
the role as well as skills and per- on the Group’s average three-year
formance of the individual Board financial performance.
Member
Component Instrument Purpose Drivers
Fixed salary Monthly (cash) payments Payment for the functional role Range and complexity of tasks,
market value, skills and profile of
the individual
Variable remuneration component Annual bonus payment (cash) Payment for year-over-year — F inancial performance
performance of the Group
— individually defined percentage
is defined based on the indivi-
dual performance and market
value of the role
Share-based compensation plans Share matching plan, with a Participation in the Mid/long-term financial
three-year vesting period and mid/long-term performance performance of the Group
variable matching ratio of the Group
Other benefits Pension and insurances, other Risk protection and coverage of Legislation and market practice
benefits business related expenses
Fixed salary Effective August 8, 2016, a new Share Matching

The fixed salary is paid in cash on a monthly basis Plan (SMP) was introduced, in which plan partici-
and determined based on the function, qualification, pants invest at a specified date previously acquired
responsibilities and performance of the individual ‘own shares’ of the Company into the plan. These
member of the Management Board as well as the shares are blocked for three years whereby voting
external market value of the role. rights and rights to receive dividends remain intact
with the holder of the shares. For each invested
Variable remuneration component share, the Company will match additional shares
The variable part of remuneration is calculated upon completion of a three-year vesting period
based on an individually defined percentage of the and service condition during the same period.
adjusted Group’s net earnings (adjusted for addi- The level of the share match (share match ratio) is
tional goodwill amortisation and digressive bonus defined based on the average growth rate of the
eligibility). Group’s net profit after tax achieved over the three
financial years in the vesting period. The maximum
The variable part of remuneration is paid in cash matching ratio of one share for each share invested
in the month of May of the following year after the by the employee (minimum investment is 50 shares)
approval of the Consolidated Financial Statements can be obtained by achieving an average growth
by the Annual General Meeting. rate of net profit after tax over three years of at
least 15 per cent. A guaranteed minimum matching
Share-based compensation plans Management of 0.2 shares per invested share is granted after
Board members are eligible to participate in the the vesting period. Should the number of allocated
Group’s share-based compensation plans. shares be a fraction of shares, then the number
of shares is rounded up to the next whole number.
The goal of these plans is to focus on long-term The Group’s previous SMP was discontinued as
value creation for the Company, alignment of of June 30, 2015. It allowed participants to acquire
Management Board’s interests to those of share- shares of the Company with a discount compared
holders as well as retention of members of the to the actual share price at a specified date; such
Management Board. shares are blocked for three years, give its holder
immediate voting rights and rights to receive three-years vesting period and service condition
dividends. For each share purchased, the Company during the same period. This plan has outstanding
will match additional shares upon completion of options to be exercised until June 30, 2018.
a three-year vesting period and service condition
during the same period. The level of the share Other benefits
match (share match ratio) is defined based on the The members of the Management Board participate
performance of the Group achieved over the three in an employee pension fund that covers the fixed
financial years in the vesting period against defined salary with age-related contribution rates equally
targets. The maximum matching ratio of one share shared by the employee and the employer.
for each share purchased (minimum investment
is 75 shares), can be obtained by exceeding the Each member of the Management Board is entitled
defined target by more than 15 per cent. A guaran- to car allowance. Out-of-pocket expenses are reim-
teed minimum matching of 0.2 shares per share bursed at actual costs incurred.
purchased is granted after the vesting period.
Should the number of allocated shares be a The members of the Management Board have
fraction of shares, then the number of shares is employment contracts with notice periods of a
rounded up to the next whole number. This plan maximum of one year.
has shares eligible until June 30, 2018, for a
matching on July 1, 2018.
BOARD OF DIRECTORS REMUNERATION
The Group’s “Share Purchase and Option Plan”
(SPOP) was discontinued as of July 1, 2012. It The total maximum amount of remuneration for the
allowed selected employees of the Group to acquire members of the Board of Directors approved by the
shares of the Company at a reduced price at a spe- Annual General Meeting on May 9, 2017, for the
cified date; such shares are blocked for three years, period ending at the 2018 Annual General Meeting,
give its holder immediate voting rights and rights to amounted to CHF 6.0 million.
receive dividends. For each share purchased under
this plan the Company granted two options to the The total actual remuneration accrued for and paid
participants. Each option entitled the participant to to the members of the Board of Directors for their
purchase one share of Kuehne + Nagel International tenure 2017 amounted to CHF 4.1 million (2016: CHF
AG at a pre-defined price upon completion of the 5.2 million).
The following tables show details of the remunera-

tion of the members of the Board of Directors for
2017 and 2016:
2017
Remuneration to the members Compensation for Compensation Social Share Total

of the Board of Directors Board of Directors for Committees insurance Plan
in CHF thousand
Klaus-Michael Kuehne
(Honorary Chairman) 750 10 38 – 798
Dr. Joerg Wolle (Chairman) 1,100 – 63 – 1,163
Karl Gernandt (Vice Chairman) 550 25 50 290 915
Dr. Renato Fassbind 180 15 12 – 207
Juergen Fitschen 180 – 8 – 188
Hans Lerch 180 10 9 – 199
Dr. Thomas Staehelin 180 15 9 – 204
Hauke Stars 180 – 11 – 191
Dr. Martin C. Wittig 180 15 12 – 207
Total 3,480 90 212 290 4,072
2016
Remuneration to the members Compen- Compen- Social Salary Variable Pension 5 Share Total
of the Board of Directors sation sation insurance part of Plan
in CHF thousand for for remune-
Board of Commit- ration
Directors tees
Klaus-Michael Kuehne
(Honorary Chairman) 750 10 38 – – – – 798
1
Dr. Joerg Wolle (Chairman) 809 17 47 – – – – 873
Karl Gernandt (Vice Chairman) 2 362 20 120 308 911 62 509 2,292
Bernd Wrede (Vice Chairman) 3 85 9 – – – – – 94
Dr. Renato Fassbind 180 15 12 – – – – 207
Juergen Fitschen 180 – 8 – – – – 188
Hans Lerch 180 10 9 – – – – 199
Dr. Thomas Staehelin 180 15 9 – – – – 204
4
Hauke Stars 118 – 8 – – – – 126
Dr. Martin C. Wittig 180 15 12 – – – – 207
Total 3,024 111 263 308 911 62 509 5,188
1 Chairman as of May 4, 2016.

2 Executive Chairman until May 3, 2016, with a compensation included in the salary.
3 Retired from the Board of Directors as of May 3, 2016.
4 Member of the Board of Directors as of May 4, 2016.
5 Including risk premium and savings contributions.
MANAGEMENT BOARD REMUNERATION
The total maximum amount of remuneration for the the Management Board in the financial year
members of the Management Board approved by 2017 amounted to CHF 15.2 million (2016: CHF
the Annual General Meeting on May 3, 2016, for the 15.0 million).
fiscal year 2017, amounted to CHF 22.4 million.
The following tables show details of the remuneration
The total actual remuneration accrued for and paid for the Chief Executive Officer and the other members
to the Chief Executive Officer and to the members of of the Management Board for 2017 and 2016:
2017
In CHF thousand Salary In Variable In Social Pension 1 Share In Others 2 Total

per cent part of per cent Insu- Plan per cent
of total remune- of total rance of total
remuneration remune- remune-
ration ration ration
Dr. Detlef Trefzger,

Chief Executive Officer 1,040 28.9 1,952 54.2 186 118 274 7.6 32 3,602
Members of the
Management Board 4,309 37.1 5,124 44.2 428 632 950 8.2 162 11,605
Total 5,349 35.2 7,076 46.5 614 750 1,224 8.0 194 15,207
2016
In CHF thousand Salary In Variable In Social Pension 1 Share In Others 2 Total

per cent part of per cent Insu- Plan per cent
of total remune- of total rance of total
remuneration remune- remune-
ration ration ration
Dr. Detlef Trefzger,

Chief Executive Officer 1,040 27.9 1,866 50.0 193 116 484 13.0 32 3,731
Members of the
Management Board 3,921 34.8 4,666 41.5 396 528 1,588 14.1 153 11,252
Total 4,961 33.1 6,532 43.6 589 644 2,072 13.8 185 14,983
1 Including risk premium and savings contributions.

2 Others include a car allowance.
OTHER REMUNERATION of the Board of Directors, Management Board and

to individuals who are closely related to them.
Remuneration for former members of the Board of
Directors or Management Board and related parties Loans and credits granted
During the reporting year 2017 no remuneration In the reporting years 2017 and 2016, neither
(2016: CHF 1.1 million) was paid to or accrued Kuehne + Nagel International AG nor one of its sub-
for former members of the Board of Directors and sidiaries provided any guarantees, loans, advances,
the Management Board in connection with their credit facilities or similar either to former or current
previous activities in the Company. Furthermore, members of the Board of Directors or Management
no payments which are not at arm’s length were Board or to related parties nor are there any receiva-
made during 2017 and 2016 to former members bles of any kind outstanding.
REPORT OF THE STATUTORY AUDITOR ON THE REMUNERATION REPORT

OF KUEHNE + NAGEL INTERNATIONAL AG, SCHINDELLEGI (FEUSISBERG),
SWITZERL AND
We have audited the remuneration report of Kuehne + Nagel International AG on the pages 29 to 35 for
the year ended December 31, 2017.
Board of Directors’ responsibility

The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration
report in accordance with Swiss law and the Ordinance. The Board of Directors is also responsible for
designing the remuneration system and defining individual remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the remuneration report. We conducted our audit in accord-
ance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the remuneration report
complies with Swiss law and articles 14 – 16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the remu-
neration report with regard to compensation, loans and credits in accordance with articles 14 – 16 of the
Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also
includes evaluating the reasonableness of the methods applied to value components of remuneration,
as well as assessing the overall presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion, the remuneration report for the year ended December 31, 2017 of Kuehne + Nagel
International AG complies with Swiss law and articles 14 – 16 of the Ordinance.
Ernst & Young Ltd
Christian Krämer Philipp Baumann

Licensed Audit Expert Licensed Audit Expert
(Auditor in Charge)
Zurich, February 27, 2018

37 CONSOLIDATED FINANCIAL STATEMENTS 2017
OF THE KUEHNE + NAGEL GROUP
Income Statement
CHF million Note 2017 2016 Variance

per cent
Net turnover 19 18,594 16,525 12.5

Net expenses for services from third parties –11,571 –9,975
Gross profit 19 7,023 6,550 7.2
Personnel expenses 20 –4,243 –3,957
Selling, general and administrative expenses 21 –1,643 –1,525
Other operating income/expenses, net 22 13 42
EBITDA 1,150 1,110 3.6
Depreciation of property, plant and equipment 26 –172 –161
Amortisation of other intangibles 27 –41 –31
EBIT 937 918 2.1
Financial income 23 16 12
Financial expenses 23 –4 –3
Result from joint ventures and associates 6 8
Earnings before tax (EBT) 955 935 2.1
Income tax 24 –215 –215
Attributable to:
Equity holders of the parent company 737 718 2.6
Non-controlling interests 3 2
Basic earnings per share in CHF 25 6.16 5.99 2.9

Diluted earnings per share in CHF 25 6.15 5.98 2.9
Consolidated Financial Statements 2017 STATEMENT OF COMPREHENSIVE INCOME 38
Statement of Comprehensive Income
CHF million Note 2017 2016
Earnings for the year 740 720
Other comprehensive income

Items that may be reclassified subsequently to profit or loss:
Foreign exchange differences 69 –7
Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit plans 35/24 2 –38
Income tax on actuarial gains/(losses) on defined benefit plans – 12
Total other comprehensive income, net of tax 71 –33
Total comprehensive income for the year 811 687
Attributable to:
Equity holders of the parent company 808 685
39 Consolidated Financial Statements 2017 BAL ANCE SHEET
Balance Sheet
CHF million Note Dec. 31, 2017 Dec. 31, 2016
Assets
Property, plant and equipment 26 1,249 1,127
Goodwill 27 849 758
Other intangibles 27 96 82
Investments in joint ventures 28 31 27
Deferred tax assets 24 220 215
Non-current assets 2,445 2,209
Assets held for sale 26 – 66
Prepayments 128 106
Work in progress 29 418 300
Trade receivables 30 3,537 2,605
Other receivables 31 132 140
Income tax receivables 31 77 64
Cash and cash equivalents 32/33 720 841
Current assets 5,012 4,122
Total assets 7,457 6,331
Consolidated Financial Statements 2017 BAL ANCE SHEET 40
Liabilities and equity

Share capital 120 120
Reserves and retained earnings 1,464 1,322
Equity attributable to the equity holders of the parent company 2,321 2,160
Equity 34 2,327 2,165
Provisions for pension plans and severance payments 35 430 407
Deferred tax liabilities 24 128 165
Finance lease obligations 38 4 7
Non-current provisions 40 58 60
Non-current liabilities 620 639
Bank and other interest-bearing liabilities 37/38 14 8
Trade payables 39 1,890 1,544
Accrued trade expenses/deferred income 39 1,493 968
Income tax liabilities 133 108
Current provisions 40 66 75
Other liabilities 41 914 824
Current liabilities 4,510 3,527
Total liabilities and equity 7,457 6,331
Schindellegi, February 27, 2018
KUEHNE + NAGEL INTERNATIONAL AG

Dr. Detlef Trefzger Markus Blanka-Graff
CEO CFO
41 Consolidated Financial Statements 2017 STATEMENT OF CHANGES IN EQUIT Y
Statement of Changes in Equity
CHF million Note Share Share Treasury Cumulative Actuarial Retained Total Non- Total
capital premium shares translation gains & earnings equity controlling equity
adjustment losses attribut- interests
able to
equity
holders
of parent
company
Balance as of January 1, 2017 120 511 –59 –966 –132 2,686 2,160 5 2,165
Earnings for the year – – – – – 737 737 3 740
Foreign exchange differences – – – 69 – – 69 – 69
Actuarial gains/(losses) on
defined benefit plans, net of tax 35/24 – – – – 2 – 2 – 2
Total other comprehensive
income, net of tax – – – 69 2 – 71 – 71
Total comprehensive income
for the year – – – 69 2 737 808 3 811
Purchase of treasury shares 34 – – – – – – – – –
Disposal of treasury shares 34 – –15 16 – – – 1 – 1
Dividend paid 34 – – – – – –658 –658 –2 –660
Expenses for share-based
compensation plans 36 – – – – – 10 10 – 10
Total contributions by and
distributions to owners – –15 16 – – –648 –647 –2 –649
Balance as of December 31, 2017 120 496 –43 –897 –130 2,775 2,321 6 2,327
Consolidated Financial Statements 2017 STATEMENT OF CHANGES IN EQUIT Y 42
Statement of Changes in Equity
CHF million Note Share Share Treasury Cumulative Actuarial Retained Total Non- Total
capital premium shares translation gains & earnings equity controlling equity
adjustment losses attribut- interests
able to
equity
holders
of parent
company
Balance as of January 1, 2016 120 532 –19 –959 –106 2,553 2,121 5 2,126
Earnings for the year – – – – – 718 718 2 720
Foreign exchange differences – – – –7 – – –7 – –7
Actuarial gains/(losses) on
defined benefit plans, net of tax 35/24 – – – – –26 – –26 – –26
Total other comprehensive
income, net of tax – – – –7 –26 – –33 – –33
Total comprehensive income
for the year – – – –7 –26 718 685 2 687
Purchase of treasury shares 34 – – –66 – – – –66 – –66
Disposal of treasury shares 34 – –21 26 – – – 5 – 5
Dividend paid 34 – – – – – –599 –599 –2 –601
Expenses for share-based
compensation plans 36 – – – – – 14 14 – 14
Total contributions by and
distributions to owners – –21 –40 – – –585 –646 –2 –648
Balance as of December 31, 2016 120 511 –59 –966 –132 2,686 2,160 5 2,165
43 Consolidated Financial Statements 2017 C ASH FLOW STATEMENT
Cash Flow Statement
Cash flow from operating activities

Reversal of non-cash items:
Income tax 24 215 215
Financial income 23 –16 –12
Financial expenses 23 4 3
Result from joint ventures and associates 28 –6 –8
Depreciation of property, plant and equipment 26 172 161
Amortisation of other intangibles 27 41 31
Expenses for share-based compensation plans 20 10 14
Gain on disposal of property, plant and equipment 22 –9 –46
Loss on disposal of property, plant and equipment 22 – 2
Net addition to provisions for pension plans and severance payments 35 –3 –18
Subtotal operational cash flow 1,148 1,062
(Increase)/decrease work in progress –106 –39
(Increase)/decrease trade and other receivables, prepayments –760 –158
Increase/(decrease) provisions –16 –23
Increase/(decrease) other liabilities 33 50
Increase/(decrease) trade payables, accrued trade expenses/deferred income 721 168
Income taxes paid –240 –212
Total cash flow from operating activities 780 848
Consolidated Financial Statements 2017 C ASH FLOW STATEMENT 44
Cash flow from investing activities

Capital expenditure
— Property, plant and equipment 26 –225 –239
— Other intangibles 27 –13 –13
Disposal of property, plant and equipment 91 66
Acquisition of subsidiaries, net of cash acquired 42 –107 –
(Increase)/decrease of share capital in joint ventures 28 1 2
Dividend received from joint ventures and associates 3 6
Interest received 5 4
Total cash flow from investing activities –245 –174
Cash flow from financing activities
Repayment of interest-bearing liabilities –4 –5
Interest paid –4 –3
Purchase of treasury shares 34 – –66
Disposal of treasury shares 34 1 5
Dividend paid to equity holders of parent company 34 –658 –599
Dividend paid to non-controlling interests 34 –2 –2
Acquisition of non-controlling interests 42 –3 –
Total cash flow from financing activities –670 –670
Exchange difference on cash and cash equivalents 8 –6
Increase/(decrease) in cash and cash equivalents –127 –2
Cash and cash equivalents at the beginning of the year, net 33 837 839
Cash and cash equivalents at the end of the year, net 33 710 837
45 Consolidated Financial Statements 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
1 ORGANISATION
Kuehne + Nagel International AG (the Company) is incorporated in Schindellegi (Feusisberg), Switzerland.
The Company is one of the world’s leading global logistics providers. Its strong market position lies in the
seafreight, airfreight, overland and contract logistics businesses.
The Consolidated Financial Statements of the Company for the year ended December 31, 2017, comprise the
Company, its subsidiaries (the Group) and its interests in joint ventures.
2 STATEMENT OF COMPLIANCE
The Consolidated Financial Statements have been prepared in accordance with International Financial
Reporting Standards (IFRS).
3 BASIS OF PREPARATION
The Consolidated Financial Statements are presented in Swiss Francs (CHF) million and are based on the
individual financial statements of the consolidated companies as of December 31, 2017. Those financial
statements have been prepared in accordance with uniform accounting policies issued by the Group, which
comply with the requirements of the International Financial Reporting Standards (IFRS) and Swiss law (Swiss
Code of Obligation). The Consolidated Financial Statements are prepared on a historical cost basis except for
certain financial instruments, which are stated at fair value. Non-current assets and disposal groups held for
sale are stated at the lower of the carrying amount and fair value less costs to sell.
The preparation of financial statements in accordance with IFRS requires the management to make judge-
ments, estimates and assumptions that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. The actual result may differ from these estimates. Judgements made by the
management in the application of IFRS that have a significant effect on the Consolidated Financial State-
ments and estimates with a significant risk of material adjustment in the future are shown in note 50.
Consolidated Financial Statements 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 46
The accounting policies are the same as those applied in the Consolidated Financial Statements for the year
ended December 31, 2016.
New, revised and amended standards that are effective for the 2017 reporting year are not applicable to the
Group or do not have a significant impact on the Consolidated Financial Statements.
Adoption of new and revised standards and interpretations in 2018 and later
The following new, revised and amended standards and interpretations have been issued but are not yet
effective and not applied early in the Consolidated Financial Statements of the Group. The assessment by
the Group Management shows the expected effects as disclosed in the table below.
Standard/interpretation Effective date Planned application
Annual Improvements to IFRS 2014 – 2016 Cycle 1 January 1, 2018 Reporting year 2018
2
IFRS 15 – Revenue from Contracts with Customers January 1, 2018 Reporting year 2018
IFRS 9 – Financial Instruments 3 January 1, 2018 Reporting year 2018
Clarifications of classification and measurement of share-based
payment transactions – Amendments to IFRS 2 1 January 1, 2018 Reporting year 2018
IFRIC Interpretation 22 – Foreign Currency Transactions
and Advance Consideration 1 January 1, 2018 Reporting year 2018
IFRS 16 – Leases 4 January 1, 2019 Reporting year 2019
IFRIC Interpretation 23 Uncertainty over Income Tax Treatments 1
January 1, 2019 Reporting year 2019
IFRS 17 Insurance Contracts 1 January 1, 2019 Reporting year 2019
Annual Improvements to IFRS 2015 – 2016 Cycle 1 January 1, 2019 Reporting year 2019
Prepayment Features with Negative Compensation –
Amendments to IFRS 9 1 January 1, 2019 Reporting year 2019
Long-term Interests in Associates and Joint Ventures –
Amendments to IAS 28 1 January 1, 2019 Reporting year 2019
1 No or no significant impacts are expected on the Consolidated Financial Statements.

2 I FRS 15-Revenue from Contracts with Customers will supersede all current revenue recognition requirements under IFRS. It establishes a five-step model to
account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an
entity expects to be entitled in exchange for transferring goods or services to a customer.
The Group has assessed the impact of the new IFRS 15-Revenue from Contracts with Customers on the Consolidated Financial Statements. The Group does
not expect that the adoption of the standard will have a material effect on the Consolidated Financial Statements. There will be no material change to
our revenue recognition related to our four principal services Seafreight, Airfreight, Overland, and Contract Logistics. Revenues reported in each of these
reportable segments are recognised based on the terms of the contracts with customers as well as based on the status of completion of the service.
The presentation and disclosure requirements in IFRS 15 are more detailed than under current IFRS. Therefore, certain additional disclosures in relation
to contract balances and net turnover are expected. The Group will adopt the new standard by using the modified retrospective method.
3 The new IFRS 9-Financial Instruments will replace IAS 39-Financial Instruments: Recognition and Measurements as well as all previous versions of IFRS 9.
The new IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge
accounting.
The Group has performed an impact assessment of IFRS 9 and it expects no material impact on its Consolidated Financial Statements:
– Classification and measurement: the Group will continue measuring at fair value all financial assets currently held at fair value.
– Impairment: the Group will apply the simplified approach and record lifetime expected losses on all trade receivables.
– Hedge accounting: the Group does not apply hedge accounting.
4 The new IFRS 16-Leases will impact the financial reporting of the Group. In 2018, the Group will continue its assessment and the implementation of the
required system, design and process changes to comply with the new leases standard.
4 SCOPE OF CONSOLIDATION
The Group’s significant consolidated subsidiaries and joint ventures are listed on pages 103 to 110.
Major changes in the scope of consolidation in 2017 relate to the following companies (for further
information on the financial impact of the acquisitions refer to note 42):
Changes in the scope of consolidation Capital share Currency Share capital Incorporation/
2017 in per cent equals in 1,000 acquisition date
voting rights
Incorporations
Kuehne + Nagel Shared Service Centre AS, Estonia 100 EUR 25 June 12, 2017
Kuehne + Nagel Shared Service Center Ltd.,
Philippines 100 PHP 10,500 September 1, 2017
Blue Anchor Line International Limited, Tanzania 100 TZS 21,000 October 1, 2017
Anchor Risk Services GmbH, Germany 100 EUR 25 November 1, 2017
Kuehne + Nagel Finance AG, Switzerland 100 CHF 100 December 12, 2017
Acquisitions
1
Amex Ltd., Israel 3 ILS – February 23, 2017
2
Ferlito Pharma S.r.l., Italy 100 EUR 1,000 April 21, 2017
Zet Farma Lojistik Hizmetleri
Sanayi ve Ticaret A.S., Turkey 2 100 TRL 2,000 April 26, 2017
2
Trillvane Ltd, Kenya 100 KES 750 September 7, 2017
Commodity Forwarders Inc., USA 2 100 USD 1,220 October 2, 2017
3
Nacora Insurance Brokers Ltd., Hong Kong 30 HKD 150 December 19, 2017
1 The Group previously owned 87.5 per cent of the share capital and applied the full consolidation method. For further information refer to Note 42.
2 Refer to Note 42 for details to the acquisition of subsidiaries.
3 T he Group previously owned 70.0 per cent of the share capital and applied the full consolidation method. For further information refer to Note 42.
Major changes in the scope of consolidation for the year 2016 are related to the following companies
(for further information on the financial impact of the acquisitions refer to note 42):
Changes in the scope of consolidation Capital share Currency Share capital Incorporation date
2016 in per cent equals in 1,000
voting rights
Incorporations
KN Shared Service Centre S.A., Costa Rica 100 CRC 1 March 1, 2016
Kuehne + Nagel Logistics Solutions Inc.,
Philippines 100 PHP 5,000 June 1, 2016
5 PRINCIPLES OF CONSOLIDATION
Business Combinations
Business combinations are accounted for by applying the acquisition method. The Group measures goodwill
as the fair value of the consideration transferred (including the fair value of any previously held equity inter-
est in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net
recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all
measured as of the acquisition date. If the excess is negative, a bargain purchase gain is recognised imme-
diately in profit or loss.
The Group elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair
value or at its proportionate share of the recognised amount of the identifiable net assets at the acquisition
date.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group
to the previous owners of the acquiree, equity interests issued by the Group, and the fair value of any
contingent consideration. If the contingent consideration is classified as equity it is not re-measured, and
settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent
consideration are recognised in profit or loss. The consideration transferred does not include amounts related
to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Transaction costs other than those associated with the issue of debt or equity securities incurred in connec-
tion with a business combination are expensed as incurred.
Written put options held by non-controlling shareholders

If the Group has a potential obligation to purchase shares in a subsidiary from a non-controlling share-
holder through a written put option, a liability is recognised at the present value of the redemption
amount with a corresponding entry in equity. If a non-controlling shareholder still has present access to
the economic benefits associated with the underlying ownership interest, the non-controlling interest in
the subsidiary continues to be recognised as a separate component in equity.
The liability is re-estimated at each reporting date. Any subsequent changes in the liability’s carrying
amount are recognised in profit or loss.
For the reporting year 2017 there is no written put option outstanding.
Acquisitions and disposals of non-controlling interests

Changes in the parent’s ownership interest in a subsidiary after having obtained control that do not result in a
loss of control are accounted for as transactions with owners in their capacity as owners, and the effect of such
transactions is recognised in equity. No goodwill is recognised as a result of acquisition of non-controlling inter-
ests, and no gain or loss on disposals of non-controlling interests is recognised in profit or loss. Adjustments to
non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.
Subsidiaries
The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries
are companies controlled, directly or indirectly, by the Group. Normally, this control is evidenced if the Group
owns, either directly or indirectly, more than 50 per cent of the voting rights whereby potential voting rights
are also considered. Subsidiaries are included in the Consolidated Financial Statements by the full consoli-
dation method as from the date on which control is transferred to the Group until the date control ceases.
The non-controlling interests in equity as well as earnings for the period are reported separately in the
Consolidated Financial Statements.
Disposal of subsidiaries
When the Group ceases to have control over a subsidiary, it derecognises the assets and liabilities of the
respective subsidiary as well as any related non-controlling interest and other components of equity.
Any resulting gain or loss is recognised in the income statement. Amounts previously recognised in other
comprehensive income are reclassified to the income statement. Any retained interest in the former sub-
sidiary is remeasured to its fair value at the date when the control is lost.
Associates and joint ventures

Associates are companies over which the Group has significant influence but which it does not control.
Significant influence is normally evidenced if the Group owns 20 per cent or more of the voting or potential
voting rights. Joint ventures are contractual arrangements in which the Group has joint control, whereby the
Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its
liabilities.
Interests in associates and joint ventures are accounted for using the equity method. They are initially recog-
nised at cost, including transaction costs. Subsequent to initial recognition, the Group’s share of the profit
or loss and other comprehensive income of associates and joint ventures is included in the Group’s financial
statements, until the date significant influence or joint control ceases.
Transactions eliminated on consolidation

Intra-group balances, transactions, income and expenses are eliminated in preparing the Consolidated
Financial Statements.
Foreign exchange translation

Financial statements of consolidated companies are prepared in their respective functional currencies and
translated into CHF (the Group’s presentation currency) as of year-end. Assets and liabilities, including
goodwill and fair value adjustments arising on consolidation, are translated at year-end exchange rates and
all items included in the income statement are translated at average exchange rates for the year, which
approximate actual rates. Exchange differences originating from such translation methods have no impact
on the income statement since they are recognised in other comprehensive income.
Transactions in foreign currencies in individual subsidiaries are translated into the functional currency at
actual rates of the transaction day. Monetary assets and liabilities are translated at year-end rates. Non-
monetary assets and liabilities that are stated at historical cost are translated at actual rates of the trans-
action day. Non-monetary assets and liabilities that are stated at fair value are translated at the rate at
the date the values are determined. Exchange differences arising on the translation are included in the
income statement.
Conversion rates of major foreign currencies are applied as follows:
Income statement and cash flow statement (average rates for the year)
Currency 2017 Variance 2016

CHF per cent CHF
EUR 1.– 1.1105 2.1 1.0881

USD 1.– 0.9848 –0.6 0.9911
GBP 1.– 1.2684 –5.4 1.3413
Balance sheet (year-end rates)
Currency Dec. 2017 Variance Dec. 2016

CHF per cent CHF
EUR 1.– 1.1746 9.3 1.0742

USD 1.– 0.9883 –3.9 1.0282
GBP 1.– 1.3240 5.0 1.2615
6 FINANCIAL ASSETS AND LIABILITIES

The accounting policy applied to financial instruments depends on their classification. The Group’s financial
assets and liabilities are classified into the following categories:
— The category financial assets or liabilities at fair value through profit or loss includes financial assets
or liabilities held for trading and financial assets designated as such upon initial recognition. As of
December 31, 2017 and 2016, there are no financial liabilities that, upon initial recognition, have been
designated at fair value through profit or loss.
— Loans and receivables are carried at amortised cost calculated by using the effective interest rate
method, less allowances for impairment.
— Financial assets/investments available for sale include all financial assets/investments not assigned
to one of the above mentioned categories. These might include investments in affiliates that are not
associates or joint ventures and investments in bonds and notes. Financial assets/investments available
for sale are recognised at fair value, changes in value (after tax) are recognised directly in other com-
prehensive income until the assets are sold, at which time the amount reported in other comprehensive
income is transferred to the income statement. As of December 31, 2017 and 2016, the Group did not
have any financial assets/investments available for sale.
— Financial liabilities that are not at fair value through profit or loss, are carried at amortised cost
calculated by using the effective interest rate method.
Derivatives and hedge accounting

Derivative financial instruments (foreign exchange contracts) are used to hedge foreign exchange exposures
on outstanding balances in the Group’s internal clearing system centralised at the head office. Given that
the Group’s hedging activities are limited to hedges of recognised foreign currency monetary items, the
Group does not apply hedge accounting under IAS 39. Derivatives are carried at fair value, and all changes
in fair value are recognised immediately in the income statement as part of financial income or expenses.
All derivatives with a positive fair value would be disclosed as derivative assets and included in the line
“financial investments” on the balance sheet, while all derivatives with a negative fair value would be
disclosed as derivative liabilities and included in the line “other liabilities”.
Impairment of financial assets

If there is any indication that a financial asset (loans and receivables) or financial assets/investments
available for sale may be impaired, its recoverable amount is calculated. The recoverable amount of the
Group’s loans and receivables is calculated as the present value of expected future cash flows, discounted
at the original effective interest rate inherent in the asset. Receivables with a short duration are not
discounted.
Trade receivables are reported at their anticipated recoverable amounts. The allowance for bad debts is
determined based on an individual basis or on a portfolio basis, where there is objective evidence that
impairment losses have been incurred. The allowance account is used to record impairment losses unless
the Group is satisfied that no recovery of the amount due is possible; at that point the amount considered
unrecoverable is written off against the financial assets directly.
If an asset’s recoverable amount is less than its carrying amount, the asset is written down to its recover-
able amount. All subsequent impairment losses (after reversing previous revaluations recognised in other
comprehensive income of available for sale equity securities) are recognised in the income statement.
An impairment loss in respect of a financial asset is reversed if there is a subsequent increase in recoverable
amount that can be related objectively to an event occurring after the impairment loss was recognised.
Reversals of impairment losses are recognised in the income statement, with the exception for reversals of
impairment losses on available for sale equity securities, for which any reversals are recognised in other
comprehensive income.
7 PROPERT Y, PL ANT AND EQUIPMENT

Property, plant and equipment are included in the Consolidated Financial Statements at cost less accumu-
lated depreciation and accumulated impairment losses. The depreciation is calculated on a straight line
basis considering the expected useful life of the individual assets. The estimated useful lives for the major
categories are:
Category Years
Buildings 40
Vehicles 4–10
Leasehold improvements 5
Office machines 4
IT hardware 3
Office furniture 5
If parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment. Subsequent expenditure is capitalised only if it is probable
that the future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other expenditure is recognised in the income statement as an expense
as incurred.
8 LEASES
Leases that transfer substantially all the risks and rewards of ownership of the leased asset to the Group
are classified as finance leases. Other leases are classified as operating leases.
Assets leased under finance leases are included at the present value of the future minimum lease payments
or their fair value if lower, less accumulated depreciation and accumulated impairment losses. If there is a
reasonable certainty that the Group will obtain ownership by the end of the lease term, leased assets are
depreciated over their useful life. Otherwise, leased assets are depreciated over the shorter of the lease
term and their useful life. The interest portion of the lease payments is expensed through the income state-
ment based on the effective interest rate inherent in the lease.
Operating lease payments are treated as operating costs and charged to the income statement on a
straight line basis over the lease period unless another basis is more appropriate to reflect the pattern of
benefits to be derived from the leased asset.
Any gain or loss from sale and lease-back transactions resulting in operating leases is taken directly to
the income statement if the transaction is established at fair value. If the transaction is established below
fair value, any loss that is compensated by future lease payments at below market price is deferred and
amortised over the length of the period the asset is expected to be used. Any other loss is recognised in the
income statement immediately. If the transaction is established above fair value the gain arising from the
transaction is deferred and amortised over the period the asset is expected to be used. If the fair value at
the time of the sale and lease-back transaction is less than the carrying amount of the asset, a loss equal
to the difference between the carrying amount and the fair value is recognised immediately.
9 INTANGIBLES
Goodwill
All business combinations are accounted for by applying the acquisition method. Goodwill arising from
an acquisition represents the fair value of the consideration transferred (including the fair value of any
previously held equity interest in the acquiree) and the recognised amount of any non-controlling interests
in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired
and liabilities assumed. Goodwill is allocated to cash-generating units.
Goodwill is stated at cost less accumulated impairment losses. Goodwill is tested annually for impairment
at year-end. However, if there is an indication that goodwill could be impaired at any other point in time,
an impairment test is performed.
Other intangibles
Other identifiable intangibles (i.e. software, customer lists, customer contracts, etc.) purchased from third
parties or acquired in a business combination are separately recognised as intangibles, and are stated at
cost less accumulated amortisation and accumulated impairment losses. Intangibles acquired in a business
combination are recognised separately from goodwill if they are subject to contractual or legal rights or are
separately transferable. Software is amortised over its estimated useful life, three years maximum. Other
intangibles are amortised on a straight line basis over their estimated useful life (up to ten years maximum).
As of December 31, 2017 and 2016, there are no intangibles with indefinite useful life recognised in the
Group’s balance sheet.
10 C ASH AND C ASH EQUIVALENTS

Cash and cash equivalents comprise cash at banks and in hand as well as short-term deposits and highly
liquid investments with a term of three months or less from the date of acquisition that are readily convertible
to known amounts of cash and that are subject to an insignificant risk of changes in value. For the purpose
of the consolidated cash flow statement, cash and cash equivalents consist also of bank overdrafts that are
repayable on demand as they are forming an integral part of the Group’s cash management.
11 IMPAIRMENT OF NON-FINANCIAL ASSETS

The carrying amounts of the Group’s investments in associates and joint ventures, its intangibles and
property, plant and equipment, are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Goodwill
is tested for impairment every year. An impairment loss is recognised whenever the carrying amount of an
asset or its cash-generating unit exceeds its recoverable amount.
Calculation of a recoverable amount

The recoverable amount of an asset is the greater of its fair value less costs of disposal and its value in use.
In assessing value in use the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit the asset belongs to.
Reversals of impairment losses

An impairment loss recognised for goodwill is not reversed. In respect to other assets, an impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
12 SHARE C APITAL
Shares
Incremental costs directly attributable to the issue of shares and share options are recognised as a deduction
from equity.
Treasury shares
When share capital recognised as equity is repurchased, the amount of the consideration paid, which
includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity.
Repurchased shares are classified as treasury shares and are presented as a deduction from total equity.
When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase
in equity, and the resulting surplus or deficit on the transaction is transferred to/from the share premium.
13 PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event if it is probable that an outflow of resources will be required to settle the obligation and the amount
of the obligation can be estimated reliably. If the effect is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. A provision is classified in non-current liabili-
ties in case the expected timing of the payment of the amounts provided for is more than one year.
14 PENSION PL ANS, SEVERANCE PAYMENTS AND SHARE-BASED COMPENSATION PL ANS

Some consolidated companies maintain pension plans in favour of their personnel in addition to the legally
required social insurance schemes. The pension plans partly exist as independent trusts and are operated
either under a defined contribution or a defined benefit plan.
Defined benefit plans

The aggregate of the present value of the defined benefit obligation and the fair value of plan assets for
each plan is recorded in the Balance Sheet as net defined benefit liability or net defined benefit asset.
The discount rate is the yield at the reporting date on “AA” credit-rated corporate bonds that have maturity
dates approximating the terms of the Group’s obligations and that are denominated in the same currency in
which benefits are expected to be paid. The calculation is performed by an independent, qualified actuary
using the projected unit credit method.
All actuarial gains and losses arising from defined benefit plans are recognised immediately in other
comprehensive income.
Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised in the income statement
as an expense in the periods during which services are rendered by the employees.
Severance payments
The Group provides severance benefits to employees as legally required in certain countries, which are
accounted for as defined benefit plans.
Share-based compensation plans

Effective August 8, 2016, the Company introduced a Share Matching Plan (SMP) that replaced the SMP imple-
mented in 2012. This long-term incentive plan allows selected employees of the Group to invest at a specified
date previously acquired ‘own shares’ of the Company into the plan. These shares are blocked for three years
whereby voting rights and rights to receive dividends remain intact with the holder of the shares.
For each invested share, the Company will match additional shares upon completion of a three-year vesting
period and service condition during the same period. The level of the share match (share match ratio) is defined
based on the average growth rate of the Group’s net profit after tax achieved over the three financial years in
the vesting period.
The fair value of shares matched under the SMP is recognised as a personnel expense with a corresponding
increase in equity. The fair value of matched shares is equal to the market price at grant date reduced by the
present value of the expected dividends during the vesting period and recognised as personnel expense over
the relevant vesting periods. The amount expensed is adjusted to reflect actual and expected levels of vesting.
The Group’s previous SMP was discontinued as of June 30, 2015. It allowed selected employees of the Group
to acquire shares of the Company with a discount compared to the actual share price at a specified date. These
shares are blocked for three years, whereby voting rights and rights to receive dividends remain intact with the
holder of the shares. For each share purchased, the Company will match additional shares upon completion of
a three-year vesting period and service condition during the same period. The level of the share match (share
match ratio) is defined based on the performance of the Group achieved over the three financial years in the
vesting period against defined targets.
When employees purchased shares at a discounted price, the difference between the fair value of the shares at
purchase date and the purchase price of the shares was recognised as a personnel expense with a correspond-
ing increase in equity. The fair value of the shares granted was measured at the market price of the Company’s
shares.
The fair value of shares matched under the SMP is recognised as a personnel expense with a corresponding
increase in equity. The fair value of matched shares is equal to the market price at grant date reduced by the
present value of the expected dividends during the vesting period and recognised as personnel expense over
the relevant vesting periods. The amount expensed is adjusted to reflect actual and expected levels of vesting.
This plan has shares eligible for a matching until June 30, 2018.
15 REVENUE RECOGNITION
The Company generates its revenues from four principal services: 1) Seafreight, 2) Airfreight, 3) Overland,
and 4) Contract Logistics. Revenues reported in each of these reportable segments include revenues
generated from the principal service as well as revenues generated from services like customs clearance,
export documentation, import documentation, door-to-door service, and arrangement of complex logistics
supply movement, that are incidental to the principal service.
In Seafreight, Airfreight and Overland the Group generates the majority of its revenues by purchasing
transportation services from direct (asset-based) carriers and selling a combination of those services to
its customers. In its capacity of arranging carrier services, the Group issues a contract of carriage to
customers. Revenues related to shipments are recognised based upon the terms in the contract of carriage
and to the extent a service is completed. Revenues from other services, including providing services at
destination, are recognised based on the status of completion of the service.
In Contract Logistics the principal services are related to customer contracts for warehousing and distri-
bution activities. Based on the customer contracts, revenues are recognised to the extent the service is
completed.
A better indication of the performance in the logistics industry compared to the turnover is the gross
profit. The gross profit represents the difference between the turnover and the cost of services rendered
by third parties for all reportable segments.
16 INTEREST EXPENSES AND INCOME

Interest income is recognised as it accrues using the effective interest method.
Borrowing costs that are not directly attributable to an acquisition, construction or production of a qualify-
ing asset are recognised in the income statement by using the effective interest method. The Group has not
capitalised any borrowing costs as it does not have any qualifying assets.
17 INCOME TAXES
Income tax on earnings for the year comprises current and deferred tax. Both current and deferred tax are
recognised in the income statement, except to the extent that the tax relates to business combinations or
items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantially enacted at the balance sheet date and any adjustment to tax payable for previous
years.
Deferred tax is recognised based on the balance sheet liability method, on temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and their tax base. The following
temporary differences are not accounted for: initial recognition of goodwill, initial recognition of assets or lia-
bilities that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries
to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax rec-
ognised is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset in respect of temporary differences or unused tax losses is recognised only to the extent
that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred
tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
18 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than from continuing use. The asset (or disposal group) must be
available for immediate sale in its present condition and the sale must be highly probable. Immediately before
classification as held for sale, the measurement of the assets (and all assets and liabilities in a disposal group)
is updated in accordance with applicable IFRS. Then, on initial classification as held for sale, non-current assets
and disposal groups are recognised at the lower of carrying amount and fair value less costs to sell. Impair-
ment losses on initial classification as held for sale are included in the income statement. Intangible assets and
property, plant and equipment once classified as held for sale are not amortised or depreciated.
A discontinued operation is a component of the Group’s business that represents a separate major line of busi-
ness or geographical area of operations or is a company acquired exclusively with a view to resale. Classification
as a discontinued operation occurs upon disposal or, if earlier, when the operation meets the criteria to be
classified as held for sale.
Consolidated Financial Statements 2017 OTHER NOTES 58
OTHER NOTES
19 SEGMENT REPORTING
a) Reportable segments
The Group provides integrated logistics solutions across customers’ supply chains using its global logistics
network.
The four reportable segments, Seafreight, Airfreight, Overland and Contract Logistics, reflect the internal
management and reporting structure to the Management Board (the chief operating decision maker, CODM)
and are managed through specific organisational structures. The CODM reviews internal management
reports on a monthly basis. Each segment is a distinguishable business unit and is engaged in providing and
selling discrete products and services.
The discrete distinction between Seafreight, Airfreight and Overland is the usage of the same transportation
mode within a reportable segment. In addition to common business processes and management routines, a
single main transportation mode is used within a reportable segment. For the reportable segment Contract
Logistics the services performed are related to customer contracts for warehouse and distribution activities,
whereby services performed are storage, handling and distribution.
Pricing between segments is determined on an arm’s length basis. The accounting policies of the reportable
segments are the same as applied in the Consolidated Financial Statements.
Information about the reportable segments is presented on the next pages. Segment performance is based
on EBIT as reviewed by the CODM. The column “eliminations” shows the eliminations of turnover and ex-
penses between segments. All operating expenses are allocated to the segments and included in the EBIT.
b) Geographical information
The Group operates on a worldwide basis in several geographical areas: EMEA, Americas and Asia-Pacific.
All products and services are provided in each of these geographical regions. The regional revenue is based
on the geographical location of the customers invoiced, and regional assets are based on the geographical
location of assets.
c) Major customers
There is no single customer who represents more than 10 per cent of the Group’s total revenue.
59 Consolidated Financial Statements 2017 OTHER NOTES
a) Reportable segments
Total Group Seafreight Airfreight Overland
CHF million 2017 2016 2017 2016 2017 2016 2017 2016
Turnover (external customers) 22,220 19,985 8,805 7,981 4,759 3,935 3,356 3,130
Inter-segment turnover – – 2,309 1,881 2,864 2,100 1,300 1,184
Customs duties and taxes –3,626 –3,460 –2,222 –2,167 –679 –588 –239 –232
Net turnover 18,594 16,525 8,892 7,695 6,944 5,447 4,417 4,082
Net expenses for services –11,571 –9,975 –7,476 –6,279 –5,908 –4,483 –3,465 –3,187
Gross profit 7,023 6,550 1,416 1,416 1,036 964 952 895
Total expenses –5,873 –5,440 –979 –951 –703 –649 –860 –825
EBITDA 1,150 1,110 437 465 333 315 92 70
Depreciation of property, plant and equipment –172 –161 –18 –16 –15 –14 –25 –23
Amortisation of other intangibles –41 –31 –5 –4 –5 –3 –18 –19
EBIT (segment profit/(loss)) 937 918 414 445 313 298 49 28
Financial income 16 12
Financial expenses –4 –3
Earnings before tax (EBT) 955 935
Income tax –215 –215
Attributable to:
Additional information not regularly

reported to the CODM
Reportable non-current segment assets 2,445 2,209 79 80 162 58 475 483
Segment assets 7,457 6,331 1,552 1,233 1,238 722 1,062 935
Segment liabilities 5,130 4,166 1,615 1,300 1,035 663 837 718
Allocation of goodwill 849 758 39 40 98 33 331 322
Allocation of other intangibles 96 82 – – 33 – 63 82
Capital expenditure property,
plant and equipment 225 239 19 19 18 22 23 31
Capital expenditure other intangibles 13 13 3 4 2 2 2 2

Property, plant and equipment, goodwill and
intangibles through business combinations 112 – – – 102 – – –
Non-cash expenses 71 119 18 21 5 7 14 26
Total Unallocated
Contract Logistics Reportable Segments Eliminations Corporate
2017 2016 2017 2016 2017 2016 2017 2016
5,300 4,939 22,220 19,985 – – – –

199 172 6,672 5,337 –6,672 –5,337 – –
–486 –473 –3,626 –3,460 – – – –
5,013 4,638 25,266 21,862 –6,672 –5,337 – –
–1,394 –1,363 –18,243 –15,312 6,672 5,337 – –
3,619 3,275 7,023 6,550 – – – –
–3,331 –3,015 –5,873 –5,440 – – – –
288 260 1,150 1,110 – – – –
–114 –108 –172 –161 – – – –
–13 –5 –41 –31 – – – –
161 147 937 918 – – – –
1,478 1,346 2,194 1,967 – – 251 242

2,557 2,294 6,409 5,184 – – 1,048 1,147
1,364 1,198 4,851 3,879 – – 279 287
381 363 849 758 – – – –
– – 96 82 – – – –
165 167 225 239 – – – –
6 5 13 13 – – – –
10 – 112 – – – – –
34 65 71 119 – – – –
Total Group EMEA Americas
CHF million 2017 2016 2017 2016 2017 2016
Turnover (external customers) 22,220 19,985 14,349 12,908 5,454 4,834

Inter-regional turnover – – 4,372 3,514 1,063 885
Customs duties and taxes –3,626 –3,460 –2,607 –2,404 –755 –720
Net turnover 18,594 16,525 16,114 14,018 5,762 4,999
Net expenses for services –11,571 –9,975 –11,159 –9,378 –4,405 –3,755
Gross profit 7,023 6,550 4,955 4,640 1,357 1,244
Total expenses –5,873 –5,440 –4,280 –3,993 –1,111 –999
EBITDA 1,150 1,110 675 647 246 245
Depreciation of property, plant and equipment –172 –161 –126 –122 –28 –23
Amortisation of other intangibles –41 –31 –26 –16 –14 –15
EBIT 937 918 523 509 204 207
Earnings before tax (EBT) 955 935
Income tax –215 –215
Attributable to:
Reportable non-current assets 2,194 1,967 1,545 1,402 496 416
Additional information not regularly

reported to the CODM
Segment assets 7,457 6,331 4,256 3,436 1,543 1,278
Segment liabilities 5,130 4,166 3,434 2,728 849 724
Allocation of goodwill 849 758 536 489 290 246
Allocation of other intangibles 96 82 6 4 90 78
Capital expenditure property,
plant and equipment 225 239 155 177 48 37
Capital expenditure other intangibles 13 13 12 12 1 1
Property, plant and equipment, goodwill and
intangibles through business combinations 112 – 26 – 86 –
Non-cash expenses 71 119 59 105 10 10
Unallocated
Asia-Pacific Eliminations Corporate
2017 2016 2017 2016 2017 2016
2,417 2,243 – – – –
1,237 938 –6,672 –5,337 – –
–264 –336 – – – –
3,390 2,845 –6,672 –5,337 – –
–2,679 –2,179 6,672 5,337 – –
711 666 – – – –
–482 –448 – – – –
229 218 – – – –
–18 –16 – – – –
–1 – – – – –
210 202 – – – –
153 149 – – – –
610 470 – – 1,048 1,147

568 427 – – 279 287
23 23 – – – –
– – – – – –
22 25 – – – –
– – – – – –
– – – – – –
2 4 – – – –
Country information
The following countries individually constitute more than 10 per cent of the Group’s non-current assets or of
its net turnover. In addition, Switzerland is reported being the country, where the ultimate parent company
of the Group is registered.
2017 2016
Countries Reportable non- Net Reportable non- Net

CHF million current assets turnover current assets turnover
France 1 423 1,591 388 1,446

1
Germany 495 3,246 452 2,918
1
Great Britain 198 1,817 189 1,684
1
Switzerland 30 261 15 241
2
USA 404 2,895 336 2,558
Others 644 8,784 587 7,678
Total 2,194 18,594 1,967 16,525
1 Part of region EMEA.

2 Part of region Americas.
20 PERSONNEL EXPENSES
Salaries and wages 3,400 3,173

Social expenses and benefits 738 679
Expenses for share-based compensation plans 10 14
Expenses for pension plans
— defined benefit plans 16 16
— defined contribution plans 66 63
Other 13 12
Total 4,243 3,957
21 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Administration 236 225

Communication 70 69
Travel and promotion 97 91
Vehicles 230 213
Operating expenses 255 231
Facilities 760 706
Bad debt and collection expenses –5 –10
Total 1,643 1,525
22 OTHER OPERATING INCOME/EXPENSES, NET
Gain on disposal of property, plant and equipment 9 46

Loss on disposal of property, plant and equipment – –2
Other operating income/expenses 4 –2
Total 13 42
23 FINANCIAL INCOME AND EXPENSES
Interest income 6 4
Exchange differences, net 10 8
Interest expenses –4 –3
Net financial result 12 9
24 INCOME TAX
Current tax expense

— in current year 252 202
— under/(over) provided in previous years –2 6
250 208
Deferred tax expense from

— changes in temporary differences –35 7
Income tax 215 215
There is no income tax (2016: CHF 12 million) relating to actuarial gains and losses of CHF 2 million before
tax (2016: CHF 38 million) arising from defined benefit plans recognised in other comprehensive income.
Reconciliation of the effective tax rate

The contributing factors for the difference between the expected tax rate (the Group’s overall expected tax
rate is calculated as the weighted average tax rate based on earnings before tax of each subsidiary and can
change on a yearly basis) and the effective tax are as follows:
CHF million 2017 per cent 2016 per cent
Earnings before tax according

to the income statement 955 935
Income tax/expected tax rate 205 21.4 196 20.9
Tax effect on
— tax exempt (income)/non-deductible expenses 11 1.1 –5 –0.5
— utilisation of previously unrecognised tax losses –5 –0.5 –1 –0.1
1
— change of deferred tax due to tax rate adjustments –13 –1.3 – –
— under/(over) provided in previous years –2 –0.2 6 0.6
— unrecoverable withholding taxes 19 2.0 19 2.0
Income tax/effective tax rate 215 22.5 215 22.9
1 The change of deferred tax due to tax rate adjustments is mainly the result of the revaluation of
deferred tax liabilities due to a decrease in the corporate Federal income tax rate in the USA.
Deferred tax assets and liabilities

Assets 1 Liabilities 1 Net 1
CHF million Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2016
Property, plant and equipment 27 25 –40 –53 –13 –28

Goodwill and other intangibles 17 17 –45 –65 –28 –48
Trade receivables 23 20 –6 –1 17 19
Other receivables 2 2 –23 –31 –21 –29
Finance lease obligations 2 4 – –3 2 1
Provisions for pension plans
and severance payments 71 70 – – 71 70
Other liabilities 69 57 –14 –12 55 45
Tax value of loss carry-
forwards recognised 9 20 – – 9 20
Tax assets/(liabilities) 220 215 –128 –165 92 50
1 O
f which acquired in
business combinations 3 – –3 – – –
The recognised deferred tax assets relating to tax losses carried forward are expected to be used by the end
of the next three years at the latest.
Unrecognised deferred tax assets

2017 2016
CHF million Unused Unrecognised Unused Unrecognised

tax losses deferred tax tax losses deferred tax
asset on unused asset on unused
tax losses tax losses
Balance as of December 31 133 33 128 31
It is not probable that future taxable profits will be available against which the unrecognised deferred tax
assets can be used. CHF 22 million (2016: CHF 28 million) of unrecognised deferred tax assets relate to tax
losses that do not expire.
25 EARNINGS PER SHARE

The following reflects the data used in the basic and diluted earnings per share computations for the
years ending December 31.
Earnings per share 2017 2016
Earnings for the year attributable to the equity holders

of the parent company in CHF million 737 718
Weighted average number of ordinary shares outstanding during the year 119,610,380 119,840,170
Dilutive effect on number of shares outstanding:
Share-based compensation plans 173,246 159,830
Adjusted weighted number of ordinary shares applicable
to diluted earnings per share 119,783,626 120,000,000
Basic earnings per share in CHF 6.16 5.99
Diluted earnings per share in CHF 6.15 5.98
26 PROPERT Y, PL ANT AND EQUIPMENT
2017
CHF million Properties Other operating Properties, Other operating Total

including and office buildings under and office
buildings on equipment finance leases equipment
third parties‘ under
land finance leases
Cost
Balance as of January 1, 2017 890 916 54 18 1,878
Additions through
business combinations – 8 – – 8
Additions 48 177 – – 225
Disposals –15 –98 – –5 –118
Adjustments/transfers 8 – –8 – –
Effect of movements in
foreign exchange 71 74 6 2 153
Balance as of December 31, 2017 1,002 1,077 52 15 2,146
Accumulated depreciation
and impairment losses
Balance as of January 1, 2017 160 572 1 18 751
Depreciation charge for the year 21 150 1 – 172
Disposals –5 –88 – –5 –98
Effect of movements
in foreign exchange 15 54 1 2 72
Balance as of December 31, 2017 192 688 2 15 897
Carrying amount
As of January 1, 2017 730 344 53 – 1,127
As of December 31, 2017 810 389 50 – 1,249
2016
CHF million Properties Other operating Properties, Other operating Total

including and office buildings under and office
buildings on equipment finance leases equipment
third parties‘ under
land finance leases
Cost
Balance as of January 1, 2016 903 799 128 20 1,850
Additions 43 196 – – 239
Disposals –39 –65 –1 –2 –107
Reclassification to
1
“assets held for sale” –92 – – – –92
Effect of movements in
foreign exchange 3 –14 –1 – –12
Balance as of December 31, 2016 890 916 54 18 1,878
Accumulated depreciation
and impairment losses
Balance as of January 1, 2016 168 512 8 20 708
Depreciation charge for the year 28 131 2 – 161
Disposals –23 –60 – –2 –85
Reclassification to
1
“assets held for sale” –26 – – – –26
Effect of movements
in foreign exchange 4 –11 – – –7
Balance as of December 31, 2016 160 572 1 18 751
Carrying amount
As of January 1, 2016 735 287 120 – 1,142
As of December 31, 2016 730 344 53 – 1,127
1 I n 2016 it was decided to sell real estate property pertaining to the business unit Contract Logistics in France.
The sale and purchase contract was signed and closed on February 21, 2017. The real estate was sold at its carrying amount.
27 GOODWILL AND OTHER INTANGIBLES
2017
CHF million Goodwill Other

intangibles 1
Cost
Balance as of January 1, 2017 771 675
Additions through business combinations 64 41
Additions – 13
Deletions – –16
Effect of movements in foreign exchange 28 44
Balance as of December 31, 2017 863 757
Accumulated amortisation and impairment losses

Amortisation charge for the year – 41
Deletions – –16
Effect of movements in foreign exchange 1 43
Carrying amount
As of January 1, 2017 758 82
As of December 31, 2017 849 96
1 Other intangibles mainly comprise customer contracts/lists, trademarks, field office agent contracts and software.
2016
CHF million Goodwill Other

intangibles 1
Cost
Additions – 13
Deletions – –15
Effect of movements in foreign exchange –9 –7
Accumulated amortisation and impairment losses

Amortisation charge for the year – 31
Deletions – –15
Effect of movements in foreign exchange – –9
Carrying amount
As of January 1, 2016 767 98
As of December 31, 2016 758 82
1 Other intangibles mainly comprise customer contracts/lists, trademarks, field office agent contracts and software.
Impairment testing of goodwill

The Group has performed impairment tests of goodwill at the end of the financial years 2017 and 2016.
For the purpose of impairment testing, goodwill is allocated to cash-generating units which are expected
to benefit from the synergies of the corresponding business combination. The goodwill impairment test
is performed at the level of a cash-generating unit or a group of cash-generating units represented by a
business unit in the respective country. The allocation of goodwill to reportable segments (business units)
and geographical regions is further illustrated in note 19.
For the goodwill allocated to the cash-generating units, the impairment tests are based on calculations of
value in use. Cash flow projections are based on actual operating results and three-year business plans. Cash
flows beyond the three year period are extrapolated by using estimated long-term growth rates. The growth
rates do not exceed the long-term average growth rate for the logistics industry in which the cash-generating
units operate. Future cash flows are discounted based on the weighted average cost of capital (WACC),
taking into account risks that are specific to the cash-generating units.
Key assumptions used for value-in-use calculations of goodwill:
Business acquired USCO ACR Group, Alloin Group, ReTrans Group, Commodity Multiple Total
Group Europe 1 France USA Forwarders Inc., units 2
USA
Year of acquisition 2001 2006 2009 2015 2017 2004–2012

Carrying amount of goodwill
in CHF million 2017 87 274 84 130 53 221 849
Carrying amount of goodwill
in CHF million 2016 91 254 77 135 – 201 758
Contract Contract All
Cash-generating unit within segment Logistics Logistics Overland Overland Airfreight Segments
Basis for recoverable amount Value in use Value in use Value in use Value in use Value in use Value in use
Pre-tax discount rate in per cent 2017 11.3 9.3–12.1 11.4 9.7 11.8 9.2–17.9
Pre-tax discount rate in per cent 2016 12.0 10.4–13.9 12.7 10.1 n/a 10.3–19.9
Projection period 3 years 3 years 3 years 3 years 3 years 3 years
Terminal growth rate in per cent 2017 1.5 1.5 1.5 1.5 1.5 1.5
Terminal growth rate in per cent 2016 1.5 1.5 1.5 1.5 n/a 1.5
1 ACR Group, Europe, goodwill relates to Great Britain (2017: CHF 88 million; 2016: CHF 84 million), France (2017: CHF 66 million; 2016: CHF 61 million), Netherlands
(2017: CHF 55 million; 2016: CHF 50 million) and other various countries (2017: CHF 65 million; 2016: CHF 59 million).
2 Including cash-generating units without significant goodwill: Cordes & Simon Group, Germany (2017: CHF 37 million; 2016: CHF 34 million), G.L. Kayser Group, Germany
(2017: CHF 35 million; 2016: CHF 32 million) and J. Martens Group, Norway (2017: CHF 23 million; 2016: CHF 22 million), RH Group, United Kingdom (2017: CHF 48 million;
2016: CHF 46 million), Cooltainer, New Zealand (2017: CHF 20 million; 2016: CHF 20 million), Eichenberg Group, Brazil (2017: CHF 14 million; 2016: CHF 14 million),
J. Van de Put, Netherlands (2017: CHF 11 million; 2016: CHF 10 million).
Key assumptions have not changed compared to the previous year with the exception of discount rates used.
For both 2017 and 2016, all recoverable amounts exceeded their carrying amounts and consequently no
impairment of goodwill was recognised for the years 2017 and 2016.
Management considers that it is not likely for the assumptions used to change so significantly, as to elimi-
nate the excess of recoverable amounts.
28 INVESTMENTS IN JOINT VENTURES

As of December 31, 2017, the following investments in joint ventures are held (all with 50 per cent voting
rights/Kuehne + Nagel share):
— KN-ITS S.A.L., Lebanon

— Kuehne + Nagel Drinkflow Logistics Ltd., Great Britain
— Kuehne + Nagel Drinkflow Logistics (Holdings) Ltd., Great Britain
— Sindos Railcontainer Services S.A., Greece
— Donau Transport und Umschlags GmbH, Germany
— Aba logistics GmbH, Germany
— Kuehne + Nagel Dominicana SAS, Dominican Republic
— Podium Kuehne + Nagel Logistica de Eventos Esportivos Ltda, Brazil
— Express Air Systems GmbH, Germany
The table below provides a summary of financial information on joint ventures (100 per cent):
CHF million Dec. 31, 2017 Dec. 31, 2016
Non-current assets 39 40
Current assets 85 66
Total assets 124 106
Non-current liabilities –2 –2
Current liabilities –60 –50
Equity 62 54
Kuehne + Nagel's share of equity (50 per cent) 31 27
Net turnover 334 312
No significant investments in associates were held on December 31, 2017 and 2016.
29 WORK IN PROGRESS
This position increased from CHF 300 million in 2016 to CHF 418 million in 2017, which represents a billing
delay of 6.3 working days against the previous year’s 5.4 working days.
30 TRADE RECEIVABLES
Trade receivables 3,599 2,666

Impairment allowance –62 –61
Total trade receivables 3,537 2,605
The majority of all billing is done in the respective Group companies’ own functional currencies and is mainly
in EUR 39.3 per cent (2016: 41.7 per cent), USD 15.7 per cent (2016: 18.6 per cent) and GBP 9.8 per cent
(2016: 9.5 per cent).
Trade receivables outstanding at year-end averaged 53.9 days (2016: 46.6 days). 92.3 per cent
(2016: 94.0 per cent) of the total trade receivables were outstanding between 1 and 90 days.
No trade receivables are pledged in 2017 and 2016.
The Group has a credit insurance programme in place, covering trade receivables, focusing mainly on small
and medium exposures. The credit insurance policy covers up to 80 per cent of the approved customer credit
limit, excluding any items being more than 120 days past due. As a company policy, the Group excludes
customers from its insurance programme based on certain criteria (so-called blue chip companies).
The Group establishes an impairment allowance that represents its estimate of incurred losses in respect
of trade receivables. The two components of this impairment allowance of CHF 62 million (2016: CHF 61
million) are:
— specific loss component that relates to individually significant exposure

— collective loss component based on historical experience.
Trade receivables with credit insurance cover are not included in the impairment allowance. The individual
impairment allowance relates to specifically identified customers representing extremely high risk of being
declared bankrupt, Chapter 11 customers in the USA and customers operating with significant financial
difficulties (such as negative equity). The impairment allowance for individually significant exposures is
CHF 32 million at year-end 2017 (2016: CHF 33 million).
The collective impairment allowance based on overdue trade receivables is estimated considering statistical
information of past payment experience. The Group has established a collective impairment allowance of
CHF 30 million (2016: CHF 28 million) which represents 1.9 per cent (2016: 2.3 per cent) of total outstanding
trade receivables, excluding trade receivables with insurance cover (see above) and trade receivables included
in the individual impairment allowance.
The majority of the trade receivables not past due relates to customers who have good payment records with
the Group and are subject to yearly credit risk assessments. Therefore, the Group does not believe that an
additional impairment allowance for these trade receivables is necessary.
2017 2016
CHF million Gross (excluding Collective Collective Gross (excluding Collective Collective
insured allowance allowance insured allowance allowance
receivables per cent of receivables per cent of
and individual subtotal and individual subtotal
allowance) allowance)
Not past due 1,248 – – 940 – –

Past due 1–30 days 201 – – 170 – –
Past due 31–90 days 64 3 5 51 3 5
Past due 91–180 days 13 1 10 17 2 10
Past due 181–360 days 20 20 100 18 18 100
More than 1 year 6 6 100 5 5 100
Total 1,552 30 1.9 1,201 28 2.3
The movement in the impairment allowance during the year was as follows:
2017 2016
CHF million Individual Collective Total Individual Collective Total

allowance allowance allowance allowance allowance allowance
Balance as of January 1 33 28 61 42 29 71
Additional impairment
losses recognised 13 7 20 13 9 22
Reversal of impairment
losses and write-offs –14 –5 –19 –22 –10 –32
Balance as
of December 31 32 30 62 33 28 61
31 OTHER RECEIVABLES
Receivables from tax authorities 21 16

Deposits 62 58
Sundry 49 66
Total other receivables 132 140
Income tax receivables 77 64
Total 209 204
The majority of the other receivables is held in the respective Group companies’ own functional currencies,
which represents EUR 56.9 per cent (2016: 49.6 per cent), USD 4.1 per cent (2016: 9.1 per cent) and GBP
1.1 per cent (2016: 1.0 per cent).
32 FINANCIAL INVESTMENTS AND DERIVATIVE INSTRUMENTS

As of December 31, 2017 and 2016, no material financial investments and derivative instruments were
held.
Cash in hand 2 2
Cash at banks 589 539
Short-term deposits 129 300
Cash and cash equivalents 720 841
Bank overdraft –10 –4
Cash and cash equivalents in the cash flow statement, net 710 837
The majority of the above mentioned cash and cash equivalents is held in commercial banks and managed
centrally in order to limit currency risks. A netting system and a Group cash pool are in place which also
further reduce the currency exposure. Most of the bank balances held by Group companies are in their respec-
tive functional currencies, which are mainly in CHF, EUR, USD and GBP.
34 EQUIT Y
Share capital and treasury shares 2017
2017 Balance Dec. 31 Jan. 1
Main shareholders Registered shares CHF million Capital share Voting share Registered shares
of nominal CHF 1 per cent per cent of nominal CHF 1
per share per share
Kuehne Holding AG, Schindellegi (Feusisberg) 63,900,000 64 53.3 53.4 63,900,000

Public shareholders 55,769,036 56 46.5 46.6 55,647,625
Entitled to voting rights and dividends 119,669,036 120 99.8 100.0 119,547,625
Treasury shares 330,964 – 0.2 452,375
Total 120,000,000 120 100.0 120,000,000
In 2017 the Company sold 10,686 and matched 110,725 treasury shares for the matured share matching
plan 2014 (2016: 47,280 treasury shares sold, 159,603 matched for the matured share matching plan 2013)
for CHF 1 million (2016: CHF 5 million) under the employee share-based compensation plans. The Company
did not purchase any treasury shares (2016: 506,236 treasury shares for CHF 66 million).
On December 31, 2017, the Company had 330,964 treasury shares (2016: 452,375), of which 330,964
(2016: 452,375) are reserved under the share-based compensation plans; refer to note 36 for more infor-
mation.
Dividends
The proposed dividend payment, subject to approval by the Annual General Meeting, is as follows:
Year per share CHF million
2018 CHF 5.75 688
The dividend payment 2017 to owners amounted to CHF 5.50 per share or CHF 658 million (2016: CHF 5.00
per share or CHF 599 million).
Share capital and treasury shares 2016
2016 Balance Dec. 31 Jan. 1
Main shareholders Registered shares CHF million Capital share Voting share Registered shares
of nominal CHF 1 per cent per cent of nominal CHF 1
per share per share
Kuehne Holding AG, Schindellegi (Feusisberg) 63,900,000 64 53.3 53.5 63,900,000

Public shareholders 55,647,625 56 46.4 46.5 55,946,978
Entitled to voting rights and dividends 119,547,625 120 99.7 100.0 119,846,978
Treasury shares 452,375 – 0.3 153,022
Total 120,000,000 120 100.0 120,000,000
Authorised and conditional share capital

The Annual General Meeting held on May 3, 2016, extended its approval of the maintenance of the
authorized share capital for a two years term until May 3, 2018.
The Annual General Meeting held on May 2, 2005, approved a conditional share capital increase up to
a maximum of CHF 12 million and to add a respective section in the Articles of Association.
The Annual General Meeting held on May 8, 2012, approved a conditional share capital up to a maximum
of CHF 20 million for the provision of the employee share-based compensation plans of the Company.
The Annual General Meeting held on May 5, 2015, approved a reduction of this conditional share capital
from CHF 20 million to CHF 2 million.
So far no use has been made of these rights. There is no resolution of the Board of Directors outstanding
for further issuance of either authorised or conditional capital.
Capital Management
The Group defines the capital managed as the Group’s total equity including non-controlling interests. The
Group’s main objectives when managing capital are:
— To safeguard the Group’s ability to continue as a going concern, so that it can continue to provide services
to its customers;
— To provide an adequate return to investors based on the level of risk undertaken;
— To have the necessary financial resources available to allow the Group to invest in areas that may deliver
future benefits for customers and investors.
Capital is monitored on the basis of the equity ratio and its development is shown in the table below:
CHF million 2017 2016 2015 2014 2013
Total equity 2,327 2,165 2,126 2,453 2,558

Total assets 7,457 6,331 6,099 6,603 6,374
Equity ratio in per cent 31.2 34.2 34.9 37.1 40.1
The Group is not subject to regulatory capital adequacy requirements as known in the financial services industry.
35 PROVISIONS FOR PENSION PL ANS AND SEVERANCE PAYMENTS

The Group maintains defined benefit pension plans as well as defined contribution plans. Retirement bene-
fits vary from plan to plan reflecting applicable local practices and legal requirements. Retirement benefits
are based on years of credited service and compensation as defined in the respective plan.
Overview of provisions for pension plans and severance payments
CHF million Pension Severance Total

plans payments
Balance as of January 1, 2016 346 41 387

Provisions made 16 – 16
Provisions used –18 –14 –32
Actuarial (gains)/losses recognised in other comprehensive income 38 – 38
Effect of movements in foreign exchange –2 – –2
Balance as of December 31, 2016 380 27 407
Provisions made 16 4 20
Provisions used –20 –4 –24
Actuarial (gains)/losses recognised in other comprehensive income –2 – –2
Effect of movements in foreign exchange 28 1 29
a) Defined benefit plans

The Group has a number of defined benefit plans. For a description and detailed information of the major
defined benefit plans in Germany, the USA and Switzerland, please refer to letter b) of this note.
2017 2016
CHF million Funded plans Unfunded Total Funded plans Unfunded Total
plans plans
Net liability for defined

benefit obligations
Present value of obligations 228 337 565 224 308 532
Fair value of plan assets –163 – –163 –152 – –152
Present value of net obligations 65 337 402 72 308 380
Recognised net liability for
defined benefit obligations 65 337 402 72 308 380
Allocation of plan assets

Debt securities 99 95
Equity securities 44 40
Property 14 11
Others 6 6
Total 163 152
The pension plan assets are held in multi-employer funded plans. The Group is not in a position to state
whether the funded plans contain any investments in shares of Kuehne + Nagel International AG or in any
property occupied by the Group.
2017 2016
CHF million Funded plans Funded plans
Movements of fair value of plan assets

Opening fair value of plan assets 152 163
Employer contribution 8 8
Employee contribution 4 4
Return on plan assets, excluding interest 7 4
Interest on plan assets 3 4
Benefits paid by the plan –10 –5
Plan settlement 1 – –25
Effect of movements in foreign exchange –1 –1
Closing fair value of plan assets 163 152
Expected payments to defined benefit plan in the next year 18 18

Actual return on plan assets for the year 10 8
1 Plan settlement in 2016 mainly relates to a defined benefit plan settlement in the Netherlands; the former members are now
participating in a defined contribution plan.
2017 2016
CHF million Funded plans Unfunded plans Total Funded plans Unfunded plans Total
Movements of present value of

defined benefit obligations
Opening liability for defined
benefit obligations 224 308 532 236 273 509
Current service costs 8 5 13 9 5 14
Interest costs 4 5 9 5 7 12
Employee contribution 4 – 4 4 – 4
Actuarial (gains)/losses recognised
in other comprehensive income:
— due to changes in demographic assumptions –1 – –1 –4 – –4
— due to changes in financial assumptions 3 1 4 17 37 54
— due to experience (gains)/losses 1 – 1 –5 –2 –7
Benefits paid by the plan –10 –12 –22 –5 –10 –15
Past service costs – amendments –4 – –4 – – –
Effects due to plan settlement 1
– – – –32 – –32
Net increase/(decrease) in DBO from disposals – – – –1 –1 –2
Effect of movements in foreign exchange –1 30 29 – –1 –1
Closing liability for defined
benefit obligations 228 337 565 224 308 532
Expense recognised in the income statement

Service costs 4 5 9 3 5 8
Net interest on the net defined benefit liability 1 6 7 2 6 8
Expense recognised in personnel
expenses (refer to note 20) 5 11 16 5 11 16
Actuarial gains/(losses) recognised in

other comprehensive income
Cumulative amount as of January 1 –61 –111 –172 –58 –76 –134
Recognised during the year 3 –1 2 –3 –35 –38
Effect of movements in foreign exchange 1 –10 –9 – – –
Cumulative amount as of December 31 –57 –122 –179 –61 –111 –172
1 Effects due to plan settlement 2016 mainly relate to a defined benefit plan settlement in the Netherlands; the former members are now
participating in a defined contribution plan.
Active Deferred Retired Total
Plan participants 2017 2016 2017 2016 2017 2016 2017 2016
Number of plan participants 12,668 12,578 1,306 1,375 2,330 2,234 16,304 16,187
Present value of defined

benefit obligations
In CHF million 292 286 64 63 209 183 565 532
Share in per cent 51.7 53.8 11.3 11.8 37.0 34.4 100.0 100.0
Duration in years 22.0 22.3 17.7 17.9 10.5 10.7 17.3 17.8
The duration in years corresponds to the average weighted period.
Weighted actuarial assumptions at the balance sheet date
2017 2016
Per cent Funded plans Unfunded Total Funded plans Unfunded Total
plans plans
Discount rate 1.6 1.7 1.7 1.8 1.7 1.7

Future salary increases 0.8 2.0 1.8 0.8 2.0 1.7
Future pension increases – 1.3 1.4 – 1.3 1.3
Sensitivities of significant actuarial assumptions

The discount rate and future salary increases were identified as significant actuarial assumptions. An
increase/decrease of 0.25 per cent in the respective assumption would have the following impact on the
defined benefit obligation:
2017 2016
CHF million Funded plans Unfunded Total Funded plans Unfunded Total
plans plans
Reasonably possible change

+/– in per cent 0.25 0.25 0.25 0.25 0.25 0.25
Discount Rate
Increase of defined
benefit obligation 10 13 23 9 12 21
Decrease of defined
benefit obligation –10 –13 –23 –9 –12 –21
Future salary increases
Increase of defined
benefit obligation 1 3 4 1 2 3
Decrease of defined
benefit obligation –1 –3 –4 –1 –2 –3
The sensitivity analysis is based on reasonably possible changes as of the end of the reporting year. Each
change in a significant actuarial assumption was analysed separately as part of the test. Interdependencies
between individual assumptions were not taken into account.
b) Major defined benefit plans

The Group maintains significant defined benefit pension plans in Germany, the USA and in Switzerland
constituting 89.4 per cent (2016: 89.3 per cent) of the defined benefit obligations and 85.3 per cent (2016:
83.6 per cent) of the plan assets.
Germany
There is one major defined benefit pension plan in Germany that provides retirement and disability benefits
to employees and their dependants. This plan is based on an internal pension scheme (Versorgungsordnung),
with the employers’ retirement benefits law (Betriebsrentengesetz) specifying the minimum benefits to be
provided. The plan is entirely funded by Kuehne + Nagel. Risks in relation to guarantees provided, such as
investment risk, asset volatility, salary increase and life expectancy, are borne by the Group.
Contributions are based on the salary of the employee. Pensions are calculated as a percentage of contribu-
tory base salary multiplied with the years of service. The normal retirement age for the plan is 65. Members
can draw retirement benefits early with a proportionate reduction of the pension.
The plan is closed to new entrants, who instead can participate in a defined contribution plan.
Net liability for defined benefit obligations

Present value of obligations 308 283
Fair value of plan assets – –
Present value of net obligations 308 283
Recognised net liability for defined benefit obligations 308 283

Service costs 4 3
Net interest on the net defined benefit liability 5 6
Expense recognised in personnel expenses 9 9
Plan participants 2017 2016
Number of plan participants 3,465 3,524
Present value of defined benefit obligations

In CHF million 308 283
Duration in years 17.2 17.9

Per cent 2017 2016
Discount rate 1.60 1.60

Future salary increases 2.00 2.00
Future pension increases 1.75 1.75
Mortality table Dr. K. Heubeck 2005 G Dr. K. Heubeck 2005 G
USA
The US pension plan is a defined benefit pension plan that provides retirement and disability benefits to
employees and their dependents. The various insurance benefits are governed by regulations. The US plan is
qualified under and is managed in accordance with the requirements of US federal law. In accordance with
federal law, there are plan fiduciaries that are responsible for the governance of the plan. Fiduciaries also
are responsible for the investment of the plan’s assets, which are held in a pension trust that is legally sepa-
rate from the employer. The plan is entirely funded by Kuehne + Nagel. Risks in relation to guarantees pro-
vided, such as investment risk, asset volatility, salary increase and life expectancy, are borne by the Group.
Contributions are based on the salary of the employee. The normal retirement age is 65, with a minimum
of five years of service. The plan provides a lifetime pension at normal retirement, which is based on a
percentage of the highest average monthly compensation over a five-year period (limited to USD 100,000),
multiplied by credited service under the plan. Members can draw retirement benefits early, with a propor-
tionate reduction of the pension, at the age of 55 if the employee has a minimum of 10 years of service.
The plan is closed to new entrants and its benefits are frozen. New employees are instead covered by a
defined contribution plan.

Fair value of plan assets –49 –44

Property 2 2
Total 49 44
Actual return on plan assets for the year 6 2


Service costs – –1
Net interest on the net defined benefit liability 1 1
Expense recognised in personnel expenses 1 –
Number of plan participants 1,348 1,356

Per cent 2017 2016

Future salary increases – –
Future pension increases – –
Scale MP 2017 released by Scale MP 2016 released by
Mortality table SOA on October 20, 2017 SOA on October 20, 2016
Switzerland
The Swiss pension plans are defined benefit plans that provide retirement and disability benefits to
employees and their dependents. Swiss pension plans are governed by the Swiss Federal Law on Occupa-
tional Retirement, Survivor’s and Disability Pension Plans (BVG), which stipulates that pension plans
have to be managed by independent, legally autonomous units. A pension plan’s governing body (Board of
Trustees) is responsible for the investment of the plan’s assets and must be composed of equal numbers of
employee’s and employer’s representatives. The various insurance benefits are governed in regulations, with
the BVG specifying the minimum benefits that are to be provided. As a consequence, there are a number
of guarantees provided within the pension funds which expose them to the risks of underfunding and may
require the Group to provide re-financing. Such risks include mainly investment risks (as there is a guaran-
teed return on account balances), asset volatility and life expectancy.
The monthly contributions to the pension plans are paid by the employees as well as by the employer. The
contributions are calculated as a percentage of the contributory salary and vary depending on the age of
the employee. The pension plans provide a lifetime pension to members at the ordinary retirement age as
defined in the Swiss Pension law. The pension is calculated as a percentage of the individual plan partici-
pant’s pension account at retirement date. A portion of the benefit, up to the full amount under certain
conditions, can be taken as lump sum payment at retirement. Members can draw retirement benefits early
from the age of 58, with a proportionate reduction of the pension.

Fair value of plan assets –90 –83

Property 12 8
Others – 1
Total 90 83
Actual return on plan assets for the year 3 –1


Service costs 4 9
Net interest on the net defined benefit liability – –
Expense recognised in personnel expenses 4 9
Number of plan participants 567 555

Per cent 2017 2016

Future salary increases 1.00 1.00
Future pension increases – –
Mortality table BVG 2015 Generational BVG 2015 Generational
36 EMPLOYEE SHARE-BASED COMPENSATION PL ANS
Share Matching Plan (SMP)

As described in Note 14, the Company has introduced various employee share-based compensation plans.
Under the SMP introduced effective 2016, the Company will match for each share invested additional shares
upon completion of a three-year vesting period and service condition during the same period. The share
match ratio is dependent on the average growth rate of the Group’s net profit after tax achieved over the
three financial years in the vesting period. The maximum matching ratio of one share for each share invested
by the employee (minimum investment is 50 shares) can be obtained by achieving an average growth rate of
net profit after tax over three years of at least 15 per cent. A guaranteed minimum matching of 0.2 shares
per invested share is granted after the vesting period. Should the number of allocated shares be a fraction of
shares, then the number of shares is rounded up to the next whole number.
For each share purchased under the previous SMP in the year 2015, the Company will match additional
shares upon completion of a three-year vesting period and service condition during the same period. The
level of the share match (share match ratio) is dependent on the achievement of the Group over the three
financial years in the vesting period against defined targets. The maximum matching ratio of one share
for each share purchased by the employee (minimum investment is 50 shares) can be obtained by exceed-
ing the defined target by more than 15 per cent. A guaranteed minimum matching of 0.2 shares per share
purchased is granted after the vesting period. Should the number of allocated shares be a fraction of shares,
then the number of shares is rounded up to the next whole number.
The terms and conditions of the shares allocated under the Share Matching Plans are as follows:
Share matching plan 2017 2016 2015
Grant date 01.09.2017 08.08.2016 14.08.2015

Jan. 2017– Jan. 2016– Jan. 2015–
Performance period Dec. 2019 Dec. 2018 Dec. 2017
01.09.2017– 08.08.2016– 14.08.2015–
Vesting, service and blocking period 30.06.2020 30.06.2019 30.06.2018
Fair value of shares at grant date in CHF per share n/a n/a 134.70
Purchase price of shares in CHF per share n/a n/a 125.35
Number of shares invested/granted at grant date 180,540 182,257 266,577
Number of shares to be matched as of Dec. 31, 2017 180,440 176,859 241,953
Number of shares to be matched as of Dec. 31, 2016 n/a 182,177 252,135
Expected share match ratio 0.2 0.2 0.7
Fair value of shares to be matched
at grant date in CHF per share 141.24 118.71 119.50
On July 1, 2017, the SMP 2014 matured with an actual share match ratio of 0.7 resulting in a matching of
110,725 shares to the participating employees of this plan.
On July 1, 2016, the SMP 2013 matured with an actual share match ratio of 0.7 resulting in a matching of
159,603 shares to the participating employees of this plan.
Share Purchase and Option Plan (SPOP)

In 2001 the Company introduced an employee “Share Purchase and Option Plan” (SPOP) which allowed
selected employees of the Group to acquire shares of the Company. The employees were able to buy shares
at a reduced price compared to the actual share price at a specified date. The price of the shares offered
was 90 to 96.5 per cent of the share price corresponding to the average closing price of one share at the SIX
Swiss Exchange during the months April to June. There are no vesting conditions. The shares are restricted
for a period of three years before being released to the employees.
For each share purchased under this plan, the Company granted two options to the participants. Each option
entitles the participant to purchase one share of the Company at a specified price. The exercise price is 100
per cent of the share price corresponding to the average closing price of one share at the SIX Swiss Exchange
during the months April to June. The options vest three years after the grant date and can be exercised during
the three-year period starting on the vesting date. The last options granted under this plan in 2012 will
expire at the end of the exercise period on June 30, 2018.
The terms and conditions of the options outstanding are as follows:
Grant date Exercise period Number Exercise Number Number

issued price CHF outstanding outstanding
as of Dec. 31, as of Dec. 31,
2017 2016
June 30, 2011 July 1, 2014–June 30, 2017 37,374 131.15 – 10,308
June 30, 2012 July 1, 2015–June 30, 2018 3,290 113.40 370 948
Total 40,664 370 11,256
The vesting condition is service during the three-year vesting period. The number and weighted average
exercise prices of options are as follows:
2017 2016
Options Weighted Number of Weighted Number of

average options average options
exercise price exercise price
(CHF) (CHF)
Options outstanding as of January 1 129.22 11,256 114.46 65,046

Options cancelled during the year – – 111.37 –3,450
Options expired during the year 131.15 –200 111.37 –3,060
Options exercised during the year 129.74 –10,686 111.37 –47,280
Options outstanding as of December 31 113.40 370 129.22 11,256
Options exercisable as of December 31 370 11,256
The weighted average life of the options outstanding at December 31, 2017, is 0.5 years (2016: 0.6 years).
The options outstanding at December 31, 2017, have an exercise price of CHF 113.40 (2016: CHF 113.40 to
CHF 131.15).
Total personnel expense for employee share-based compensation plans 10 14

37 BANK LIABILITIES AND OTHER INTEREST-BEARING LIABILITIES
Liabilities part of cash and cash equivalents 10 4

Short-term portion of long-term liabilities 4 4
Total 14 8
The current bank and other interest-bearing liabilities include finance lease liabilities due for payment
within one year of CHF 4 million (2016: CHF 4 million). Current bank and other interest-bearing liabilities
also include bank overdrafts of CHF 10 million (2016: CHF 4 million), which are included in cash and cash
equivalents for the purpose of the consolidated cash flow statement.
All loans and bank overdrafts are held in the respective Group companies’ own functional currencies, which
mainly is in EUR 30.0 per cent (2016: 53.9 per cent) and USD 14.0 per cent (2016: 22.9 per cent) on terms
of the prevailing market conditions. The majority of bank overdraft facilities are repayable upon notice
or within one year of the contractual term. The applicable interest rates are at prime interest rates of the
respective country.
The non-current portion of finance lease liabilities amounts to CHF 4 million (2016: CHF 7 million) and is
presented separately on the face of the balance sheet.
38 FINANCE LEASE OBLIGATIONS
2017 2016
CHF million Payments Interest Present value Payments Interest Present value
Less than 1 year 4 – 4 4 – 4

Between 1–5 years 4 – 4 7 – 7
After 5 years – – – – – –
Total 8 – 8 11 – 11
39 TRADE PAYABLES/ACCRUED TRADE EXPENSES/DEFERRED INCOME
Trade payables 1,890 1,544

Accrued trade expenses 1,307 811
Deferred income 186 157
Total 3,383 2,512
The majority of all trade payables is in the respective Group companies’ own functional currencies, which is
in EUR 42.3 per cent (2016: 42.5 per cent), USD 13.0 per cent (2016: 13.3 per cent) and GBP 11.2 per cent
(2016: 11.6 per cent).
40 PROVISIONS
The movements in provisions were as follows:
CHF million Claim Provision for Others 3 Total

provisions 1 deductible of provision
transport
liability
insurance 2
Balance as of January 1, 2016 84 27 49 160

Provisions used –46 –8 –14 –68
Provisions reversed –10 – –9 –19
Provisions made 25 10 28 63
Effect of movements in foreign exchange – – –1 –1
Balance as of December 31, 2016 53 29 53 135
of which
— Current portion 34 9 32 75
— Non-current portion 19 20 21 60
Total provisions 53 29 53 135
Balance as of January 1, 2017 53 29 53 135

Provisions used –23 –6 –15 –44
Provisions reversed –8 – –13 –21
Provisions made 24 11 14 49
Effect of movements in foreign exchange 3 – 2 5
Balance as of December 31, 2017 49 34 41 124
of which
— Current portion 34 9 23 66
— Non-current portion 15 25 18 58
Total provisions 49 34 41 124
1 S ome Group companies are involved in legal proceedings on various issues (disputes about logistics services, antitrust etc.). Some legal proceedings have
been settled in the reporting period, and corresponding payments have been made. Since October 2007 various competition authorities have investigated
certain antitrust allegations against international freight forwarding companies, inter alia against Kuehne + Nagel. A number of these investigations
has been concluded meanwhile. The Group has appealed the decision of the EU Commission according to which Kuehne + Nagel had to pay a fine of
CHF 65 million (EUR 53.7 million) to the European General Court (EGC) in 2012. On February 29, 2016, the EGC in first instance, and on February 1,
2018 also the European Court of Justice (ECJ) in a finally binding decision upheld all fines imposed by the EU Commission.
During 2015 the French Competition Authority (FCA) has concluded an investigation of certain antitrust allegations in France, mainly against domestic
freight forwarding companies, inter alia Alloin Transports, a company which was acquired by Kuehne + Nagel in 2009. The decision of the FCA, according
to which Alloin/Kuehne + Nagel paid a fine of CHF 34 million (EUR 32 million) was appealed to the Paris Court of Appeals in 2016. In 2017 Kuehne +
Nagel was able to settle certain claims, which included a partial recourse claim against the sellers of Alloin Transports.
See also note 44.
2 An additional provision for deductibles in case of transport liability has been recognised for the current year’s exposure.
3 Other provisions mainly consist of provisions for dilapidation costs amounting to CHF 27 million (2016: CHF 26 million) and of provisions for onerous
contracts amounting to CHF 4 million (2016: CHF 13 million).
41 OTHER LIABILITIES
Personnel expenses (including social security) 576 500

Other tax liabilities 104 83
Other operating expenses 173 176
Sundry 61 65
Total 914 824
42 ACQUISITION OF BUSINESSES/SUBSIDIARIES
2017 Acquisitions
Recognised fair values
CHF million Commodity Other Total

Forwarders Inc. acquisitions
Property, plant and equipment 4 4 8

Other intangibles 27 14 41
Other non-current assets 2 – 2
Trade receivables 17 7 24
Other current assets 2 – 2
Acquired cash and cash equivalents (net) 5 4 9
Subtotal assets 57 29 86
Non-current liabilities –7 –3 –10
Other current liabilities – –3 –3
Trade payables –13 –4 –17
Total identifiable assets and liabilities 37 19 56
Goodwill 53 11 64
Total consideration 90 30 120
Contingent consideration – –4 –4
Purchase price, paid in cash 90 26 116
Acquired cash and cash equivalents –5 –4 –9
Net cash outflow 85 22 107
Effective April 21, 2017, the Group acquired 100 per cent of the shares of Ferlito Pharma S.r.l., Italy. Ferlito
is a major player in pharma logistics, offering GxP compliant warehousing and forwarding services including
local distribution. The purchase price of CHF 6 million includes a contingent consideration of CHF 2 million
depending on the financial performance of the company until the year 2017.
Effective April 26, 2017, the Group acquired 100 per cent of the shares of Zet Farma Lojistik Hizmetleri
Sanayi ve Ticaret A.S., the Turkish market leader in pharma logistics. The business includes ambient and
cool storage, packaging and distribution. With approximately 400 employees the company manages around
50,000 square meters of storage space. The purchase price of CHF 8 million includes a contingent con-
sideration of CHF 2 million depending on the financial performance of the company until the year 2018.
Effective September 5, 2017, the Group acquired 100 per cent of the shares of Trillvane Limited, one of the
largest perishables specialists in Kenya, exporting flowers and vegetables. The purchase price of CHF 16 million
was paid in cash.
Effective October 2, 2017, the Group acquired 100 per cent of the shares of Commodity Forwarders Inc. (CFI)
for a purchase price of CHF 90 million. Founded in 1974 and headquartered in Los Angeles, CA, CFI is the
largest US-based perishable Airfreight forwarder. It operates in 14 facilities throughout the US and generates
annual revenues of approximately USD 200 million.
Acquisition-related costs (included in the line item “Selling, general and administrative expenses” in the Income
Statement) amount to CHF 1 million.
The trade receivables comprise gross contractual amounts due of CHF 25 million, of which CHF 1 million were
expected to be uncollectible at the acquisition date.
Goodwill of CHF 64 million arose on the acquisitions and represents management expertise and workforce
which do not meet the definition of an intangible asset to be recognised separately. Goodwill in the amount of
CHF 51 million is expected to be deductible for tax purposes.
Other intangible assets of CHF 41 million recognised on the acquisitions represent contractual and non-contrac-
tual customer lists having a useful life of 5 to 10 years.
The acquisitions contributed CHF 72 million of net turnover and CHF 6 million loss to the consolidated net
turnover and earnings for the year 2017 respectively. If the acquisitions had taken place on January 1, 2017,
the Groups’ net turnover would have been CHF 18,755 million and consolidated earnings would have been
CHF 742 million.
The initial accounting for the acquisitions has only been determined provisionally. Further adjustments may be
made to the fair values assigned to the identifiable assets acquired and liabilities assumed up to twelve months
from the date of acquisition.
Effective February 23, 2017, the Group acquired the non-controlling interest of 3 per cent of the shares of
Amex Ltd, Israel for a purchase price of CHF 2.5 million, which has been paid in cash. The Group previously
already owned 87.5 per cent of the shares of Amex Ltd. and applied the full consolidation method.
Effective December 19, 2017, the Group acquired the non-controlling interest of 30 per cent of the shares of
Nacora Insurance Brokers Limited, Hong Kong for a purchase price of CHF 0.5 million. The Group previously
already owned 70 per cent of the shares of Nacora Insurance Brokers Limited and applied the full consolidation
method.
2016 Acquisitions
There were no acquisitions of subsidiaries in 2016.

43 PERSONNEL
Number Dec. 31, 2017 Dec. 31, 2016
EMEA 55,019 51,835

Americas 12,565 10,418
Asia-Pacific 8,292 7,785
Total employees (unaudited) 75,876 70,038
Full-time equivalent 92,372 85,887
Employees within the Group are defined as persons with valid employment contracts as of December 31,
and on the payroll of the Group.
Full-time equivalent as disclosed in the table above is defined as all persons working for the Kuehne + Nagel
Group including part-time (monthly, weekly, daily or hourly) working persons with or without a permanent
contract, of which all expenses are recorded in the personnel expenses. Pro rata temporis employment has
been recalculated into the number of full-time employees.
44 CONTINGENT LIABILITIES
As of year-end the following contingent liabilities existed:
Guarantees in favour of customers and others 9 9

Contingency under unrecorded claims 3 3
Total 12 12
Some Group companies are defendants in various legal proceedings. Based on respective legal advice, the
management is of the opinion that the outcome of those proceedings will have no effect on the financial
situation of the Group beyond the existing provision for pending claims (refer to note 40) of CHF 49 million
(2016: CHF 53 million).
An antitrust proceeding in Brazil is still ongoing whereby it is currently not possible to reliably estimate a
potential financial impact of this case. Consequently, no provision or quantification of the contingent liability
for the case was made in the Consolidated Financial Statements 2017.
45 OTHER FINANCIAL COMMITMENTS

The Group operates a number of warehouse facilities under operating lease contracts. The lease contracts
run for a fixed period and none of the lease contracts includes contingent rentals.
As of year-end the following financial commitments existed in respect of non-cancellable long-term operating
leases and rental contracts:
As of December 31, 2017
CHF million Properties Operating Total

and buildings and office
equipment
2018 361 80 441

2019–2022 614 130 744
Later 208 21 229
Total 1,183 231 1,414
As of December 31, 2016
CHF million Properties Operating Total

and buildings and office
equipment
2017 349 61 410

2018–2021 571 80 651
Later 178 8 186
Total 1,098 149 1,247
The expense for operating leases recognised in the income statement amounts to CHF 599 million
(2016: CHF 551 million).
46 C APITAL COMMITMENTS
As of year-end the following capital commitments existed in respect of non-cancellable purchase contracts.
Great Britain 4 –
Others 1 –
Total 5 –
47 RISK MANAGEMENT
Group risk management

Kuehne + Nagel has a centralised risk management in place. The Risk and Compliance Committee ensures
that the Group has implemented an effective and adequate risk management system and process. The over-
all strategical risk exposure of the Group was assessed, for operational risks an independent risk assessment
procedure was adopted, and an assessment of financial risks was performed. Identified material risks are
monitored on an ongoing basis and mitigating actions and controls are implemented.
Risk management, objectives and policies are described in the status report on pages 9 to 10.
Financial risk management

The Group is exposed to various financial risks arising from its underlying operations and finance activities.
The Group is primarily exposed to market risk (i.e. interest rate and currency risk) and to credit and liquidity risk.
Financial risk management within the Group is governed by policies and guidelines approved by the senior
management. These policies and guidelines cover interest rate risk, currency risk, credit risk and liquidity risk.
Group policies and guidelines also cover areas such as cash management, investment of excess funds and
the raising of short and long-term debt. Compliance with the policies and guidelines is managed by inde-
pendent functions within the Group. The objective of financial risk management is to contain, where deemed
appropriate, exposures to the various types of financial risks mentioned above in order to limit any negative
impact on the Group’s results and financial position.
In accordance with its financial risk policies, the Group manages its market risk exposures by using financial
instruments when deemed appropriate. It is the Group’s policy and practice neither to enter into derivative
transactions for trading or speculative purposes, nor for any purpose unrelated to business transactions.
Market risk
Market risk is the risk that changes of market prices due to interest rates and foreign exchange rates are
affecting the Group’s results and financial position.
Interest rate risk

Interest rate risk arises from movements in interest rates which could have effects on the Group’s results and
financial position. Changes in interest rates may cause variations in interest income and expenses resulting
from interest-bearing assets and liabilities. Interest rate risk is the risk that the fair value or the future cash
flows of a financial instrument will fluctuate because of changes in market interest rates. Loans and invest-
ments at variable interest rates expose the Group to cash flow interest rate risk. Loans and investment at fixed
interest rates expose the Group to fair value interest rate risk in case they are measured at fair value.
Exposure
The Group’s exposure to interest rate risk relates primarily to its bank loans and finance lease liabilities and
to the Group’s investments of its excess funds. The Group’s exposure to changes in interest rates is limited
due to the short-term nature of investments of excess funds and borrowings. The Group does not use deriva-
tive financial instruments to hedge its interest rate risk in respect of investments of excess funds or loans.
Profile
At the reporting date, the interest profile of the Group’s interest-bearing financial assets and liabilities was
as follows:
Carrying amount
Variable rate instruments

Current bank and other interest-bearing liabilities –14 –8
Non-current finance lease obligations –4 –7
Total 700 824
Fair value sensitivity analysis – fixed rate instruments

As of December 31, 2017 and 2016, the Group does not hold significant investments in fixed rate instruments.
A change of 100 basis points in interest rates would not have increased or decreased profit or loss significantly.
Cash flow sensitivity analysis – variable rate instruments

A change of 100 basis points in interest rates on December 31, 2017, would have increased or decreased profit
or loss by CHF 7 million (2016: CHF 8 million) due to changed interest payments on variable rate interest-
bearing liabilities and assets. The analysis assumes that all other variables, in particular foreign exchange
rates, remain constant.
Currency risk
Currency risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
Exposure
The Group operates on a worldwide basis and, as a result, is exposed to movements in foreign currency
exchange rates of mainly EUR, USD and GBP on sales, purchases, investments in debt securities and borrow-
ings that are denominated in a currency other than the respective functional currencies of the Group entities.
Monthly intercompany payments are conducted through a Group clearing system in EUR and USD which
facilitates monitoring and control of the group-wide foreign exchange rate exposures.
To a limited extent, derivative financial instruments (foreign exchange contracts) are in use to hedge the
foreign exchange exposure on outstanding balances in the Group’s internal clearing system. Given that the
Group’s hedging activities are limited to hedges of recognised foreign currency monetary items, hedge
accounting under IAS 39 is not applied. As of the 2017 and 2016 year-end there were no material derivative
instruments outstanding. Investments in foreign subsidiaries are not hedged as those currency positions are
considered to be long-term in nature.
As of year-end the Group’s exposure to foreign currency risk was as follows:
2017 2016
CHF million EUR USD GBP EUR USD GBP
1
Cash and cash equivalents 141 86 – 52 72 1
Trade receivables 50 341 4 34 246 4
Interest-bearing liabilities – –1 – – –2 –
Trade payables –43 –113 –1 –38 –94 –1
Gross balance sheet exposure 148 313 3 48 222 4
1 Mainly represents cash pool balances in CHF with subsidiaries with functional currency EUR and USD.
The majority of all trade related billings and payments as well as all payments of interest-bearing liabilities
are made in the respective functional currencies of the Group entities.
Sensitivity analysis
A 10 per cent strengthening respectively weakening of the CHF against the following currencies on December
31, would have had the following effect on the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant.
2017
CHF million 1 CHF/EUR 1 CHF/USD 1 GBP/EUR 1 GBP/USD 1 USD/EUR
Reasonably possible change +/–

in per cent 10.0 10.0 10.0 10.0 10.0
Negative effect on P/L –14.8 –31.3 –11.2 –23.6 –15.0
Positive effect on P/L 14.8 31.3 11.2 23.6 15.0
The impact on the profit or loss is mainly a result of foreign exchange gains or losses arising from revaluation
of trade receivables, trade payables and cash and cash equivalents in foreign currencies. Significant fluctuations
of foreign currency exchange rates would not result in an impact on other comprehensive income as the Group
does not have any securities classified as available for sale or applies cash flow hedge accounting.
2016
CHF million 1 CHF/EUR 1 CHF/USD 1 GBP/EUR 1 GBP/USD 1 USD/EUR
Reasonably possible change +/–

in per cent 10.0 10.0 10.0 10.0 10.0
Negative effect on P/L –4.8 –22.2 –3.8 –17.6 –4.7
Positive effect on P/L 4.8 22.2 3.8 17.6 4.7
Foreign currency exchange rates applied

The major foreign currency exchange rates applied during the year are as explained in note 5 (principles of
consolidation).
Credit risk
Credit risk arises from the possibility that the counterparty to a transaction may be unable or unwilling to
meet its obligations, causing a financial loss to the Group. Credit risk arises primarily from the Group’s trade
receivables.
Exposure
At the balance sheet date the maximum exposure to credit risk from financial assets, without taking into
account any collateral held, credit insurance or similar, was:
Trade receivables 3,537 2,605

Other receivables 70 79
Total 4,325 3,523
Trade receivables
Trade receivables are subject to a policy of active risk management which focuses on the assessment of
country risk, credit availability, ongoing credit evaluation, and account monitoring procedures. There are
no significant concentrations of credit risk due to the Group’s large number of customers and their wide
geographical spread. For a large part of credit exposures in critical countries, the Group has obtained credit
insurance from first-class insurance companies (for further details refer to note 30).
The maximum exposure to credit risk for trade receivables at the reporting date by geographical area was:
EMEA 2,247 1,629

Americas 911 720
Asia-Pacific 379 256
Total 3,537 2,605
It is considered that the credit insurance is sufficient to cover potential credit risk concentrations (for additional
information refer to note 30).
Investments of excess funds

The Group considers its credit risk to be minimal in respect of excess funds invested in short-term deposits
(with a maturity of less than three months) and in debt securities with first-class financial institutions and
countries which are made in close coordination and management of Centralised Corporate Treasury function.
The Group does not invest in equity securities.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties to meet obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. Group companies require
sufficient availability of cash to meet their obligations. Individual companies are generally responsible for
their own cash management, including the short-term investment of cash surplus and the raising of loans
to cover cash deficits subject to guidance or in certain cases approval at Group level. The Group maintains
sufficient reserves of cash to meet its liquidity requirements at all times.
The following are the contractual maturities of financial liabilities (undiscounted), including interest pay-
ments and excluding the impact of netting agreements:
2017
CHF million Carrying Contractual Up to 6–12 Over

amounts cash flow 6 months months 1 year
Bank and other

interest-bearing liabilities 4 4 2 2 –
Trade payables 1,890 1,890 1,890 – –
Accrued trade expenses 1,307 1,307 1,307 – –
Other liabilities 227 227 225 2 –
Finance lease obligations (non-current) 4 4 – – 4
Total 3,432 3,432 3,424 4 4
2016
CHF million Carrying Contractual Up to 6–12 Over

amounts cash flow 6 months months 1 year
Bank and other

interest-bearing liabilities 4 4 2 2 –
Trade payables 1,544 1,544 1,544 – –
Accrued trade expenses 811 811 811 – –
Other liabilities 232 232 232 – –
Finance lease obligations (non-current) 7 7 – – 7
Total 2,598 2,598 2,589 2 7
It is not expected that the cash flow included in the above maturity analysis could occur at significantly
different points in time or at significantly different amounts.
48 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The fair values of financial assets and liabilities carried at amortised cost are approximately equal to the
carrying amounts.
Cash and cash equivalents with a carrying amount of CHF 720 million (2016: CHF 841 million) as well as
financial assets with a carrying amount of CHF 3,607 million (2016: CHF 2,684 million) classified as loans
and receivables carried at amortised cost, are all classified as current assets.
The Group has financial liabilities with a carrying amount of CHF 3,428 million (2016: CHF 2,598 million)
carried at amortised cost and CHF 4 million (2016: nil) carried at fair value through profit and loss.
The majority of these financial liabilities are current liabilities. At year-end 2017 and 2016 there were no
non-current fixed rate interest-bearing loans or other liabilities.
As of December 31, 2017 and 2016, the Group holds no debt instruments designated as financial assets at
fair value through profit or loss and no significant derivative instruments.
The Group’s financial instruments measured at fair value have been categorised into below mentioned levels,
reflecting the significance of inputs used in estimating fair values:
— Level 1: Quoted prices (unadjusted) in active markets for identical instruments.

— Level 2: I nput other than quoted prices included within Level 1 that are observable for the instrument,
either directly or indirectly.
— Level 3: Valuation techniques using significant unobservable inputs.
The fair value of the derivative instruments (forward foreign exchange contracts) is determined based on
current and available market data. Pricing models commonly used in the market are used, taking into
account relevant parameters such as forward rates, spot rates, discount rates, yield curves and volatility.
49 REL ATED PARTIES AND TRANSACTIONS

The Group has a related party relationship with its subsidiaries, joint ventures and with its Board of Directors
and Management Board.
Subsidiaries and Joint Ventures

The Group’s operations involve operating activities between the parent company and its subsidiaries and
between the subsidiaries themselves due to the nature of business. Overheads are, to a certain extent, also
charged to the subsidiaries based on their use of services provided. All these transactions are eliminated
upon consolidation. There were no significant transactions between the Group and its joint ventures and
other related parties.
Transactions with related parties are conducted at arm’s length.
Board of Directors and Management Board

The total compensation and remuneration paid to and accrued for the members of the Board of Directors
and the Management Board of Kuehne + Nagel International AG, Schindellegi, Switzerland, amounted to:
— Board of Directors: CHF 4.1 million (2016: CHF 5.2 million)

— Management Board: CHF 15.2 million (2016: CHF 15.0 million)
As of December 31, 2017, no loans or any other commitments were outstanding towards members neither of
the Board of Directors nor of the Management Board. Members of the Board of Directors and the Manage-
ment Board control 53.7 per cent (2016: 53.9 per cent) of the voting shares of the Company.
The following remuneration and compensation has been paid to and accrued for the Management Board and
the Board of Directors:
Management Board Board of Directors
CHF million 2017 2016 2017 2016
Wages, salaries and other short-term employee benefits 12.6 11.7 3.6 4.4
Post-employment benefits 1.4 1.2 0.2 0.3
Share-based compensation 1.2 2.1 0.3 0.5
Total compensation 15.2 15.0 4.1 5.2
For disclosure requirements according to the Swiss law (Article 663bbis/c CO), refer to pages 125 to 126; note
12 of the Financial Statements of Kuehne + Nagel International AG. For other related parties refer to note 34
outlining the shareholders’ structure, and pages 103 to 110 listing the Group’s significant subsidiaries and joint
ventures.
50 ACCOUNTING ESTIMATES AND JUDGMENTS

The management has carefully considered the development, selection and disclosure of the Group’s critical
accounting policies and estimates as well as the application of these policies and estimates.
Acquisition accounting
Intangible assets acquired in a business combination are required to be recognised separately from good-
will and amortised over their useful life if they are subject to contractual or legal rights or are separately
transferable. The Group has separately recognised customer contracts/lists, trademarks and field office
agent contracts in acquisitions made (see note 27).
The fair value of these acquired intangible assets is based on valuation techniques, which require input
based on assumptions about the future. The management uses its best knowledge to estimate fair value of
acquired intangible assets as of the acquisition date. The value of intangible assets is tested for impairment
when there is an indication that they might be impaired (see below). The management must also make
assumptions about the useful life of the acquired intangible assets which might be affected by external
factors such as increased competition.
Carrying amount of goodwill, other intangibles and property, plant and equipment
The Group tests its goodwill with a total carrying amount of CHF 849 million (2016: CHF 758 million) for
impairment every year as disclosed in note 11. No impairment loss on goodwill was recognised in 2017
and 2016. The Group also assesses annually whether there is any indication that other intangible assets
or property, plant and equipment may be impaired. In such a case, the assets are tested for impairment.
No impairment loss on other intangible assets was recognised in 2017 (2016: nil). The carrying amount of
other intangibles is CHF 96 million (2016: CHF 82 million), and that of property, plant and equipment is
CHF 1,249 million (2016: CHF 1,127 million).
Impairment tests are based on value-in-use calculations, which involve a variety of assumptions such as
estimates of future cash inflows and outflows and choice of a discount rate. Actual cash flows might, for
example, differ significantly from management’s current best estimate. Changes in market environment
or the evolution of technologies might have an impact on future cash flows and result in recognition of
impairment losses.
Defined benefit pension plans

The Group has recognised a liability for defined benefit pension plans in the amount of CHF 402 million
(2016: CHF 380 million). A number of assumptions are made in order to calculate the liability, including
discount rate and future salary increases. A relatively minor change in any of these assumptions can have a
significant impact on the carrying amount of the defined benefit obligation.
Share-based compensation plans

Judgment and estimates are required when determining the expected share match ratio at each year-end.
The variance between estimated and actual share match ratio might have an impact on the amount recognised
as personnel expense (see note 36 for more information).
Accrued trade expenses and deferred income

Freight forwarding transactions which are completed and for which the costs are not fully received, are
accrued for expected costs based on best estimate. For transactions which are not complete on account of
pending service at cut-off date or transactions for which revenue is earned and relevant costs cannot be
estimated, the related revenue is deferred. The Group management’s judgment is involved in the estimate
of costs and deferral of revenue and their completeness.
Income tax
Judgment and estimates are required when determining deferred as well as current tax assets and liabilities.
The management believes that its estimates, based on information such as the interpretation of tax laws,
are reasonable. Changes in tax laws and rates, interpretations of tax laws, earnings before tax and taxable
profit might have an impact on the amounts recognised as tax assets and liabilities.
The Group has recognised a net deferred tax asset of CHF 92 million (2016: Net deferred tax asset of
CHF 50 million). Furthermore, the Group has unrecognised deferred tax assets relating to unused tax losses
of CHF 33 million (2016: CHF 31 million). Based on estimates such as the probability of realising these
tax benefits, available taxable temporary differences, and periods of reversals of such differences, the
management does not believe that the criteria to recognise deferred tax assets are met (see note 24).
Provisions and contingent liabilities

The Group has recognised provisions for an amount of CHF 124 million (2016: CHF 135 million) related to
legal claims and other exposures in the freight forwarding and logistics operations (see note 40). The provi-
sions represent the best estimate of the risks, whereby the final amount required is subject to uncertainty.
51 POST BAL ANCE SHEET EVENTS

There have been no material events between December 31, 2017, and the date of authorisation of the
Consolidated Financial Statements that would require adjustments of the Consolidated Financial Statements
or disclosure.
52 RESOLUTION OF THE BOARD OF DIRECTORS

The Consolidated Financial Statements of the Group were authorised for issue by the Board of Directors on
February 27, 2018. A resolution to approve the Consolidated Financial Statements will be proposed at the
Annual General Meeting on May 8, 2018.
103 Consolidated Financial Statements 2017 SIGNIFIC ANT CONSOLIDATED SUBSIDIARIES AND JOINT VENTURES
SIGNIFIC ANT CONSOLIDATED SUBSIDIARIES AND JOINT VENTURES
Holding and Management Companies
Country Name of the company Location Currency Share KN voting

capital share
(in 1,000) (in per cent)
Switzerland Kuehne + Nagel International AG Schindellegi CHF 120,000 100

Kuehne + Nagel Management AG Schindellegi CHF 1,000 100
Kuehne + Nagel Liegenschaften AG Schindellegi CHF 500 100
Nacora Holding AG Schindellegi CHF 500 100
Nacora Agencies AG Schindellegi CHF 400 100
Kuehne + Nagel Real Estate Holding AG Schindellegi CHF 100 100
Kuehne + Nagel Finance AG Schindellegi CHF 100 100
Operating Companies
Western Europe
capital share
Belgium Kuehne + Nagel NV Antwerp EUR 6,338 100

Kuehne + Nagel Logistics NV Geel EUR 5,206 100
Nacora Insurance Brokers NV Brussels EUR 155 100
Logistics Kontich BVBA Kontich EUR 50 100
Logistics Nivelles SA Nivelles EUR 1,521 100
Denmark Kuehne + Nagel A/S Copenhagen DKK 5,001 100
Finland Oy Kuehne + Nagel Ltd Helsinki EUR 200 100
France Kuehne + Nagel SAS Ferrières EUR 17,380 100
Kuehne + Nagel France Immobilier SCI Ferrières EUR 4 100
Kuehne + Nagel Parts SAS Trappes EUR 87 100
Nacora Courtage d’Assurances SAS Paris EUR 40 100
Kuehne + Nagel
Aerospace & Industry SAS Ferrières EUR 37 100
Logistique Distribution Gasocogne SAS Ferrières EUR 37 100
Kuehne + Nagel Road SAS Villefranche EUR 4,000 100
I.M. Alloin SARL Villefranche EUR 8 100
Almeca SNC Villefranche EUR 32 100
Kuehne + Nagel Participations Sarl Ferrières EUR 203,630 100
K Logistics Sarl Le Meux EUR 91 100
Consolidated Financial Statements 2017 SIGNIFIC ANT CONSOLIDATED SUBSIDIARIES AND JOINT VENTURES 104

capital share
Kuehne + Nagel Logistique SASU Bresles EUR 37 100

Kuehne + Nagel Solutions Saint Vulbas EUR 10 100
Kuehne + Nagel Insitu SASU Chalon
sur Saone EUR 10 100
United Kingdom Kuehne + Nagel (UK) Limited Uxbridge EUR 8,000 100
Kuehne + Nagel Limited Uxbridge GBP 8,867 100
Nacora Insurance Brokers Limited Uxbridge GBP 150 100
Kuehne + Nagel Drinks Milton
Logistics Limited Keynes GBP – 100
Kuehne + Nagel Drinkflow Milton
Logistics Limited (Joint Venture) Keynes GBP 877 50
Kuehne + Nagel Drinkflow Logistics Milton
Holdings Limited (Joint Venture) Keynes GBP 6,123 50
Ireland Kuehne & Nagel (Ireland) Limited Dublin EUR 500 100
Israel Amex Ltd. Holon ILS 2 90.5
Italy Kuehne + Nagel Srl Milan EUR 4,589 100
Nacora Srl Milan EUR 104 100
Ferlito Pharma S.r.l Siziano EUR 1,000 100
Luxembourg Kuehne + Nagel S.a.r.l. Contern EUR 5,750 100
Kuehne + Nagel AG Contern EUR 31 100
Kuehne + Nagel Investments S.a.r.l. Contern EUR 200 100
Nacora (Luxembourg) S.a.r.l. Contern EUR 50 100
Kuehne + Nagel Beteiligungs-AG Contern EUR 10,277 100
Malta Kuehne + Nagel Limited Hamrun EUR 14 100
Morocco Kuehne + Nagel SAS Casablanca MAD 300 100
The Netherlands Kuehne + Nagel N.V. Rotterdam EUR 3,325 100
Kuehne + Nagel Investments B.V. Rotterdam EUR 50 100
Nacora Assurantiekantoor B.V. Rotterdam EUR 45 100
Kuehne + Nagel Logistics B.V. Veghel EUR 25 100
Norway Kuehne + Nagel AS Oslo NOK 3,100 100
Portugal Kuehne + Nagel Lda Porto EUR 200 100
Spain Kuehne & Nagel S.A.U. Madrid EUR 60 100
Kuehne Nagel Investments S.L.U. Madrid EUR 3 100
Nacora Correduria de Seguros S.A Barcelona EUR 150 100
Sweden Kuehne & Nagel AB Stockholm SEK 500 100
Kuehne & Nagel Investment AB Stockholm EUR 112 100
Nacora International
Insurance Brokers AB Stockholm SEK 100 100
Central & Eastern Europe

capital share
Albania Transalbania Sh.p.k Tirana ALL 41,725 51

Austria Kuehne + Nagel Eastern Europe AG Vienna EUR 1,090 100
Kuehne + Nagel GmbH Vienna EUR 1,820 100
Nacora Insurance Brokers GmbH Vienna EUR 35 100
Belarus Kuehne + Nagel FPE Minsk BYN 300 100
Bosnia and
Herzegovina Kuehne + Nagel doo Sarajevo BAM 95 100
Bulgaria Kuehne + Nagel EOOD Sofia BGN 365 100
Croatia Kuehne + Nagel d.o.o. Zagreb HRK 4,300 100
Cyprus Nakufreight Limited Nicosia EUR 17 100
Czech
Republic Kuehne + Nagel spol. s r.o. Prague CZK 21,000 100
Estonia Kuehne + Nagel AS Tallinn EUR 705 100
Kuehne + Nagel IT Service Centre AS Tallinn EUR 25 100
Germany Kuehne + Nagel (AG & Co.) KG Bremen EUR 15,000 100
KN Airlift GmbH Frankfurt EUR 256 100
Stute Logistics (AG & Co.) KG Bremen EUR 1,023 100
CS Parts Logistics GmbH Bremen EUR 426 50
Kuehne + Nagel Euroshipping GmbH Regensburg EUR 256 51
SPS Zweite Vermögensverwaltungs
GmbH Hamburg EUR 25 90
Cargopack Verpackungsgesellschaft für
Industriegüter mbH Bremen EUR 357 100
Aircraft Production Logistics GmbH Hamburg EUR 25 100
Nacora Versicherungsmakler GmbH Hamburg EUR 79 100
Gustav F. Huebener GmbH Hamburg EUR 31 100
Kuehne + Nagel Logistics
Langenau GmbH Langenau EUR 25 100
Gebr. Mönkemöller
Speditionsgesellschaft mbH Bielefeld EUR 300 100
BIL Spedition Haring KG Hamburg EUR 24 94
Aba Logistics GmbH (Joint Venture) Fulda EUR 200 50
Donau Transport und Umschlags GmbH
(Joint Venture) Regensburg EUR 108 50
Anchor Risk Services GmbH Hamburg EUR 25 100
Greece Kuehne + Nagel AE Athens EUR 10,028 100
Nacora Brokins International AE Athens EUR 60 60
Sindos Railcontainer Services AE
(Joint Venture) Thessaloniki EUR 3,038 50
Hungary Kuehne + Nagel Kft Budapest HUF 134,600 100
Latvia Kuehne + Nagel SIA Riga EUR 142 100
Lithuania Kuehne & Nagel UAB Vilnius EUR 232 100

capital share
Macedonia Kuehne + Nagel d.o.o.e.l. Skopje MKD 3,216 100

Poland Kuehne + Nagel Sp.z o.o. Poznan PLN 14,869 100
Kuehne + Nagel Real Estate Sp.z.o.o. Gadki PLN 21,467 100
Romania Kuehne + Nagel SRL Bucharest RON 2,543 100
Russia OOO Kuehne + Nagel Moscow RUR 1,339,036 100
OOO Kuehne & Nagel Sakhalin Sakhalin RUR 500 100
OOO Nakutrans Moscow RUR 278 100
Serbia Kuehne + Nagel d.o.o. Belgrade RSD 3,039 100
Slovakia Kuehne + Nagel s r.o. Bratislava EUR 470 100
Slovenia Kuehne + Nagel d.o.o. Ljubljana EUR 10 100
Switzerland Kuehne + Nagel AG Opfikon CHF 3,000 100
LogIndex AG Schindellegi CHF 3,000 100
Nacora Insurance Brokers AG Opfikon CHF 100 100
Ukraine Kuehne + Nagel Ltd. Kiev UAH 26,975 100
North America
capital share
Bermuda Kuehne + Nagel Ltd. Hamilton EUR 12 100

Canada Kuehne + Nagel Ltd. Toronto CAD 2,910 100
Nacora Insurance Brokers Ltd. Toronto CAD – 100
Kuehne + Nagel Real Estate Ltd. Toronto CAD – 100
Kuehne + Nagel Services Ltd. Vancouver USD 72,085 100
GFH Underwriting Agency Ltd. Toronto CAD 1,850 100
Mexico Kuehne + Nagel S.A. de C.V. México’ D.F. MXN 24,447 100
Kuehne + Nagel Servicios
Administrativos S.A. de C.V. México’ D.F. MXN 50 100
Agente de Seguros S.A. de C.V. México’ D.F. MXN 50 100
USA Kuehne + Nagel Investment Inc. Jersey City USD 1,400 100
Kuehne + Nagel Inc. Jersey City USD 1,861 100
Nacora Insurance Brokers Inc. Jersey City USD 25 100
Kuehne + Nagel Special Logistics Inc. Dulles USD 30 100
Kuehne + Nagel Real Estate USA Inc. Jersey City USD – 100
Kuehne + Nagel Nevada, Inc. McCarran USD 2 100
Retransportation Inc. Memphis USD 543 100
ReTrans Freight Inc. Fall River USD 23,229 100
ReTranportation Canada Inc. Toronto CAD 1,878 100
Commodity Forwarders Inc. Los Angeles USD 1,220 100
South America
capital share
Buenos
Argentina Kuehne + Nagel S.A. Aires ARS 3,208 100
Buenos
Nacora S.A. Aires ARS 20 100
Kuehne + Nagel
Barbados Logistics Services Limited Bridgetown BBD 195 100
Bolivia Kuehne + Nagel Ltda. Santa Cruz BOB 260 100
Brazil Kuehne + Nagel Serviços Logisticos Ltda. Sao Paulo BRL 200,986 100
Nacora Corretagens de Seguros Ltda. Sao Paulo BRL 1,094 100
Transeich Armazens Gerais S.A. Porto Alegre BRL 2,479 100
Transeich Assessoria e Transportes S.A. Porto Alegre BRL 17,918 100
Podium Kuehne + Nagel Logistica de Rio de
Eventos Esportivos Ltda. (Joint Venture) Janeiro BRL 100 50
Chile Kuehne + Nagel Ltda. Santiago CLP 575,000 100
Colombia Kuehne + Nagel S.A.S. Bogotá COP 5,184,600 100
Agencia De Aduanas
KN Colombia S.A.S. Nivel 2 Bogotá COP 595,000 100
Nacora Ltda. Agencia de Seguros Bogotá COP 20,000 100
Costa Rica Kuehne + Nagel S.A. San Jose CRC – 100
KN Shared Service Centre S.A. San Jose CRC – 100
Cuba Kuehne Nagel Logistic Services S.A. Havana CUC – 100
Dominican Kuehne + Nagel Dominicana SAS Santo
Republic (Joint Venture) Domingo DOP 3,000 50
Ecuador Kuehne + Nagel S. A. Quito USD 7 100
San
El Salvador Kuehne + Nagel S.A. DE C.V. Salvador USD 69 100

capital share
Guatemala Kuehne + Nagel S.A. Guatemala GTQ 4,245 100

San Pedro
Honduras Kuehne + Nagel S.A. Sula HNL 25 100
Nicaragua Kuehne + Nagel S.A. Managua NIO 10 100
Panama Kuehne + Nagel S.A. Colon USD 1 100
Kuehne + Nagel Management S.A. Colon USD 10 100
Peru Kuehne + Nagel S.A. Lima PEN 10,638 100
Trinidad & Port of
Tobago Kuehne + Nagel Ltd. Spain TTD 31 100
Uruguay Kuehne + Nagel S.A. Montevideo UYU 3,908 100
Venezuela Kuehne + Nagel S.A. Caracas VEF 1,000 100
KN Venezuela Aduanas C.A. Caracas VEF 2 100
North Asia-Pacific
capital share
China Kuehne & Nagel Ltd. Shanghai CNY 25,072 100

Kuehne & Nagel Logistics Co Ltd. Shanghai CNY 5,515 100
Kuehne & Nagel Information Center Ltd. Foshan CNY 1,000 100
Kuehne & Nagel Ltd. Hong Kong HKD 1,560 100
Transpac Container System Ltd. Hong Kong HKD 100 100
Nacora Insurance Brokers Ltd. Hong Kong HKD 500 100
Kuehne & Nagel Ltd. Macao HKD 971 100
Taiwan Kuehne + Nagel Ltd. Taipei TWD 20,000 100
Nacora Insurance Brokers Ltd. Taipei TWD 6,000 100
South Asia-Pacific
capital share
Australia Kuehne & Nagel Pty Ltd Melbourne AUD 2,900 100
Nacora Insurance Services Pty Ltd Melbourne AUD – 100
Kuehne + Nagel Real Estate Pty Ltd Melbourne AUD – 100
Bangladesh Kuehne + Nagel Limited Dhaka BDT 10,000 100
Cambodia Kuehne + Nagel Limited Phnom Penh USD 5 100
India Kuehne + Nagel Pvt. Ltd. New Delhi INR 30,000 100
Indonesia PT. Naku Freight Indonesia Jakarta IDR 13,500,100 95
Japan Kuehne + Nagel Ltd. Tokyo JPY 80,000 100
Nacora Japan Insurance Solutions Ltd. Tokyo JPY 9,900 100
Korea Kuehne + Nagel Ltd. Seoul KRW 500,000 100
Kuala
Malaysia Kuehne + Nagel Sdn. Bhd. Lumpur MYR 1,000 100
Kuala
Nacora (Malaysia) Sdn. Bhd. Lumpur MYR 100 100
Maldives Kuehne + Nagel Private Limited Male USD 1 100
Myanmar Kuehne + Nagel Ltd. Yangon USD 50 100
New Zealand Kuehne + Nagel Limited Auckland NZD 200 100
Nacora Insurance Services Limited Auckland NZD 10 100
Pakistan Kuehne + Nagel (Private) Limited. Karachi PKR 9,800 100
Philippines Kuehne + Nagel Inc. Manila PHP 5,000 100
Kuehne + Nagel Logistics Solutions Inc. Manila PHP 5,000 100
Kuehne + Nagel Shared
Service Center Inc. Cebu PHP 10,500 100
Singapore Kuehne + Nagel Pte. Ltd. Singapore SGD 500 100
Nacora Insurance Agency Pte. Ltd. Singapore SGD 100 100
Kuehne + Nagel (Asia-Pacific)
Management Pte. Ltd. Singapore SGD 200 100
Kuehne + Nagel Real Estate Pte Ltd Singapore SGD 250 100
Sri Lanka Kuehne & Nagel (Pvt) Ltd. Colombo LKR 2,502 100
Thailand Kuehne + Nagel Limited Bangkok THB 20,000 100
Vietnam Kuehne + Nagel Company Limited Ho Chi Minh VND 15,502,200 100
Middle East and Africa

capital share
Angola Kuehne & Nagel (Angola) Transitarios Lda Luanda AOA 7,824 100
Bahrain Kuehne + Nagel WLL Manama BHD 200 100
Egypt Kuehne + Nagel Ltd. Cairo EGP 1,000 100
Jawharat Al-Sharq Co. for General Trans-
Iraq portation & Support Services Ltd Baghdad USD 85 100
Kuehne + Nagel for General Trans-
portation and Logistics Services L.L.C. Erbil USD 45 100
Jordan Kuehne and Nagel Jordan LLC Amman JOD 300 100
Kenya Kuehne + Nagel Limited Nairobi KES 63,995 100
Blue Anchor Line Limited Nairobi KES 500 100
Trillvane Ltd Nairobi KES 750 100
Kuwait Kuehne + Nagel Company W.L.L. Kuwait KWD 150 100
Lebanon KN-ITS SAL (Joint Venture) Beirut LBP 113,000 50
Mauritius KN (Mauritius) Limited Port Louis MUR 4,000 100
Mozambique Kuehne & Nagel Mocambique Lda. Maputo MZN 125,883 100
Namibia Kuehne and Nagel (Pty) Ltd. Windhoek NAD 340 100
Oman Kuehne + Nagel LLC. Muscat OMR 250 70
Qatar Kuehne + Nagel L.L.C. Doha QAR 1,900 100
Saudi Arabia Kuehne and Nagel Limited Jeddah SAR 1,000 100
Kuehne + Nagel Johannes-
South Africa (Proprietary) Limited burg ZAR 1,652 75
Nacora Insurance Johannes-
Brokers (Proprietary) Limited burg ZAR 35 100
Dar es
Tanzania Kuehne + Nagel Limited Salaam TZS 525,000 100
Dar es
Blue Anchor Line International Limited Salaam TZS 21,000 100
Turkey Kuehne + Nagel Nakliyat Sti. Istanbul TRY 5,195 100
Zet Farma Lojistik Hizmetleri
Sanayi ve Ticaret A.S. Istanbul TRY 2,000 100
UAE Kuehne + Nagel L.L.C. Dubai AED 1,000 100
Kuehne + Nagel L.L.C. Abu Dhabi AED 1,000 100
Kuehne + Nagel DWC L.L.C. Dubai AED 13,000 100
Kuehne + Nagel Management ME FZE Dubai AED 1,000 100
Uganda Kuehne + Nagel Limited Kampala UGX 827,500 100
111 Consolidated Financial Statements 2017 REPORT OF THE STATUTORY AUDITOR
REPORT OF THE STATUTORY AUDITOR ON THE CONSOLIDATED

FINANCIAL STATEMENTS TO THE GENERAL MEETING OF SHAREHOLDERS
SWITZERL AND
Opinion
We have audited the consolidated financial statements of Kuehne + Nagel International AG and its subsidi-
aries (the Group), which comprise the balance sheet as at 31 December 2017 and the income statement,
the statement of comprehensive income, statement of changes in equity and statement of cash flows for
the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion the consolidated financial statements (pages 37 to 110) give a true and fair view of the
consolidated financial position of the Group as at 31 December 2017, and its consolidated financial perfor-
mance and its consolidated cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRS) and comply with Swiss law.
Basis for opinion

We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss
Auditing Standards. Our responsibilities under those provisions and standards are further described in the
“Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report.
We are independent of the Group in accordance with the provisions of Swiss law and the requirements of
the Swiss audit profession, as well as the IESBA Code of Ethics for Professional Accountants, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. For each matter below, our description of how
our audit addressed the matter is provided in that context.
Consolidated Financial Statements 2017 REPORT OF THE STATUTORY AUDITOR 112
We have fulfilled the responsibilities described in the “Auditor’s responsibilities for the audit of the consoli-
dated financial statements” section of our report, including in relation to these matters. Accordingly, our
audit included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the consolidated financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the consoli-
dated financial statements.
Recoverability of goodwill and other intangible assets
Area of focus Goodwill and other intangible assets represent 13% of the Group’s total assets and 41% of the Group’s
total shareholders’ equity as at 31 December 2017. As stated in Note 9 to the consolidated financial
statements, the carrying value of goodwill is tested annually for impairment. The Group performed its
annual impairment test of goodwill in the fourth quarter of 2017. Procedures over management’s an-
nual impairment test were significant to our audit because the assessment process requires estimates.
Key assumptions relating to the impairment test are disclosed in Note 27 to the consolidated financial
statements. The Group uses assumptions in respect of future market and economic conditions such as
economic growth, expected inflation rates, demographic developments, revenue and margin develop-
ment. Given the high level of management judgment in their impairment assessment we considered
this area to be important for our audit.
Our audit For our audit we evaluated the Group’s internal controls over its annual impairment test, key assump-
response tions applied, the weighted average cost of capital, methodologies and data used by the Group, for
example by comparing them to external data such as expected inflation rates, external market growth
expectations and by analyzing sensitivities in the Group’s valuation model. We involved valuation
specialists to assist us in these audit procedures. Furthermore, we compared the future cash flows to
the strategic plan, business plans of group companies and other relevant developments in the business
of the cash generating unit as prepared by the management board and approved by the Audit Com-
mittee.
We further assessed the historical accuracy of management’s estimates. We evaluated management’s

assumptions by analyzing to which the outcome of the impairment test is most sensitive.
Valuation of contingencies (including litigation, fines and penalties)
Area of focus Some Group companies are defendants in various legal proceedings and/or are subject to investiga-
tions by authorities, such as antitrust and tax authorities. As of 31 December 2017, the Group has
recorded CHF 49 million of claim provisions (refer to Note 40 to the consolidated financial statements)
and, in addition, disclosed those cases for which no reliable estimate can be made as contingent
liabilities (refer to Note 44 to the consolidated financial statements). The ultimate outcome of those
proceedings and investigations cannot be predicted with certainty and an adverse outcome could have
a material effect on balance sheet, income statement and cash flows. Accounting for (contingent)
liabilities from claims, proceedings and investigations is judgmental, and the amounts involved are,
or can be, material to the financial statements as a whole.
Our audit In response to these risks, our audit procedures included, amongst others, proceedings and investiga-
response tions at different levels in the organization, and the accounting and continuous re-assessment of the
related (contingent) liabilities and provisions and disclosures.
Furthermore, we inquired with legal and financial staff in respect of ongoing investigations, proceedings
or claims, inspected relevant correspondence (if any), considered the minutes of the meetings of the
Audit Committee, Board of Directors and Management Board, requested external legal confirmation
letters and have been provided with a representation letter from the Group.
We evaluated the Group’s policies, procedures and controls surrounding the identification of potential
litigation, fines and penalties, and considered management’s response and assessment to any of those.
We also assessed the disclosure regarding (contingent) liabilities from legal proceedings and investi-
gations as contained in Note 40 Provisions, Note 41 Other liabilities and Note 44 Contingent liabilities.
Valuation of income tax positions
Area of focus The Group operates across a wide range of tax jurisdictions around the world and is therefore occa-
sionally challenged by local tax authorities, mainly regarding its cross-border transfer pricing arrange-
ments. In addition, the valuation of tax positions in many cases depends on the taxable income of
future years. Where the amount of tax assets or liabilities is uncertain, the Group recognizes these
positions based on management’s best estimate, reflecting a significant level of judgements and esti-
mates, such as regarding the outcome of open tax and transfer pricing matters or regarding future
taxable income.
Our audit We tested the amounts recognized as current and deferred tax, including the assessment of
response judgmental tax positions.
In this area our audit procedures included, amongst others, assessment of correspondence with the
relevant tax authorities and the evaluation of tax exposures. In addition, in respect of deferred tax
assets we assessed management’s assumptions to determine the probability that deferred tax assets
recognized in the statement of financial position will be recovered through taxable income in future
years and available tax planning strategies. We included tax and valuation specialists to evaluate the
assumptions used to determine tax positions. During our procedures, we also reviewed management’s
budgets and forecasts. In addition, where considered relevant, we evaluated the historical accuracy
of management’s assumptions.
Recognition of net turnover and related Balance Sheet accounts
Area of focus A description of the key accounting policy for revenue recognition is included at Note 15. Total net
turnover for the business year 2017 amounted to CHF 18,594 million. The Group generates turnover
from four principal services: Seafreight, Airfreight, Overland and Contract Logistics. In addition to these
principal services, turnover is also generated from additional services that are incidental to the primary
service, such as customs clearance and door-to-door service. Turnover is recognized according to the
terms in the contract, i.e. at the time the service is rendered.
Given the significance of net turnover and related balance sheet accounts such as trade receivables,
we considered this area to be important for our audit.
Our audit We tested revenue recognition, including testing of the related internal controls. Our procedures inclu-
response ded analytical reviews on net turnover, work in progress and deferred income. We also designed and
performed audit procedures on the nature of revenues and the timing of the recognition and unusual
contractual terms. Our testing included agreeing amounts to customer contracts and confirming the
extent, timing and customer acceptance of delivery, where relevant.
Other information in the annual report

The Board of Directors is responsible for the other information in the annual report. The other information
comprises all information included in the annual report, but does not include the consolidated financial
statements, the stand-alone financial statements, remuneration report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual
report and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information in the annual report and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
Responsibility of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements that give
a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as
the Board of Directors determines is necessary to enable the preparation of consolidated financial state-
ments that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a mate-
rial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located
at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This
description forms part of our auditor’s report.
Report on other legal and regulatory requirements

In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an
internal control system exists, which has been designed for the preparation of consolidated financial state-
ments according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
Ernst & Young Ltd

(Auditor in Charge)

117 FINANCIAL STATEMENTS 2017
OF KUEHNE + NAGEL INTERNATIONAL AG
Income Statement
Income
Income from investments in Group companies 1 1,612 526
Finance income
— Interest income on loan receivables from Group companies 8 6
— Exchange gains 53 20
— Profit on sale of treasury shares 3 1
Other operational income 2 – 5
Total income 1,676 558
Expenses
Finance expenses
— Interest expenses on liabilities towards Group companies –6 –4
— Exchange losses –43 –12
— Loss on sale of treasury shares – –
Other operational expenses 3 –16 –18
Total expenses –65 –34
Earnings before tax (EBT), depreciation and impairment 1,611 524

Depreciation and impairment of investment in Group companies –157 –6
Earnings before tax (EBT) 1,454 518
Income Taxes –14 –16
Earnings for the year 1,440 502
Financial Statements 2017 BAL ANCE SHEET 118
Balance Sheet
Assets
Cash and cash equivalents 4 339 496
Other current receivables
— from third parties 6 19
— from Group companies 5 266 154
Total current assets 611 669
Long term receivables from Group companies 5 53 51
Investments 6 1,910 1,252
Non-current assets 1,963 1,303
Total assets 2,574 1,972
Liabilities and equity

Liabilities towards Group companies 7 682 874
Current liabilities
— Other provisions and accruals 4 7
— Tax provision 12 13
Current liabilities 698 894
Total liabilities 698 894
Share capital 8 120 120
Legal capital contribution reserves 6 6
Legal reserves 60 60
Free reserves
— Retained earnings 9 293 449
— Earnings for the year 1,440 502
Treasury shares 10 –43 –59
Equity 1,876 1,078
Total liabilities and equity 2,574 1,972
Schindellegi, February 27, 2018
KUEHNE + NAGEL INTERNATIONAL AG

Dr. Detlef Trefzger Markus Blanka-Graff
CEO CFO
119 Financial Statements 2017 NOTES TO THE FINANCIAL STATEMENTS 2017
NOTES TO THE FINANCIAL STATEMENTS 2017
GENERAL
Kuehne + Nagel International AG directly or indirectly controls companies which are consolidated in the
Group Financial Statements.
The Financial Statements are based on the regulations of Swiss Code of Obligations (Art. 959c Abs. 1 OR).
The regulations, which are not required by law, are specified below.
BASIS OF PREPARATION/ACCOUNTING POLICIES
Investments
The investments in subsidiaries, associates and joint ventures are recognised in the balance sheet at cost
less valuation allowance.
Receivables
— from Group companies
The balances outstanding are recorded at their nominal value less valuation allowance at year-end.
— other
Other receivables are recorded at their nominal value less valuation allowance at year-end.
Treasury shares
Treasury shares are valued at acquisition costs presented as a negative position in the equity. The profit or
loss from sale is accounted for in the Income statement.
Tax provision
Swiss taxes on income and capital are provided for at balance sheet date.
Liabilities
— towards Group companies
Liabilities towards consolidated companies are recorded at their nominal value at year-end.
Financial Statements 2017 NOTES TO THE INCOME STATEMENT AND TO THE BAL ANCE SHEET 120
NOTES TO THE INCOME STATEMENT
1 INCOME FROM INVESTMENTS IN GROUP COMPANIES

The income from investments in Group companies relates mainly to dividends received.
Income from investments and others 1,484 417

Trademark fee 128 109
Total 1,612 526
2 OTHER OPERATIONAL INCOME
Repayment of amortized paid-in surplus – 5

Total operational income – 5
3 OTHER OPERATIONAL EXPENSES
Board of Directors fee 4 3

Trademark Marketing/IP concept 5 5
Other operational expenses 7 10
Total operational expenses 16 18
NOTES TO THE BAL ANCE SHEET
The bank deposits are in the following currencies:

CHF 158 428
EUR 135 41
USD 46 27
Total 339 496
121 Financial Statements 2017 NOTES TO THE BAL ANCE SHEET
5 RECEIVABLES FROM GROUP COMPANIES
Current receivables
Kuehne + Nagel Ltd., Nairobi 19 –

Kuehne + Nagel Ltd., Bogota 4 3
Kuehne + Nagel Ltd., Amman 1 –
Kuehne + Nagel ltd., Antwerpen 1 –
Kuehne + Nagel Ltd., Bahrain 6 –
Kuehne + Nagel Ltd., Buenos Aires 3 –
Kuehne + Nagel Ltd., Copenhagen 1 –
Kuehne + Nagel Ltd., Doha 2 –
Kuehne + Nagel Ltd., Dubai 1 –
Kuehne + Nagel Ltd., Kuwait 1 –
Kuehne + Nagel Ltd., Lima 1 –
Kuehne + Nagel AG, Luxembourg 4 –
Kuehne + Nagel Investment S.a.r.l., Luxembourg 16 –
Kuehne + Nagel Ltd., Mexico 11 –
Kuehne + Nagel Pty., Panama 2 –
Kuehne + Nagel N.N., Rotterdam 9 –
Kuehne + Nagel Ltd. Santiago 3 –
Kuehne + Nagel AB, Stockholm 1 –
Kuehne + Nagel d.o.o., Zagreb 1 –
Kuehne + Nagel Real Estate Holding AG, Schindellegi 39 41
Kuehne + Nagel Liegenschaften AG, Schindellegi 20 21
Kuehne + Nagel AS, Oslo 1 1
Kuehne + Nagel AG, Zürich 6 –
Kuehne + Nagel (AG & Co.) KG, Hamburg 33 –
Kuehne + Nagel Services Ltd., Vancouver 80 84
Other Group companies – 4
Total 266 154
Long term receivables
Kuehne + Nagel Pte. Ltd., Singapore 53 51

Total 53 51
Financial Statements 2017 NOTES TO THE BAL ANCE SHEET 122
6 DEVELOPMENT OF INVESTMENTS
CHF million Investments in Investments in Total

consolidated affiliated
companies companies
Cost
Balance as of January 1, 2017 2188 2 2,190
Additions 132 – 132
Repayment/Disposals –4 – –4
Balance as of December 31, 2017 2,316 2 2,318
Cumulative amortisation
Balance as of January 1, 2017 936 2 938
Additions – – –
Disposals –530 – –530
Carrying amount
As of January 1, 2017 1,252 – 1,252
As of December 31, 2017 1,910 – 1,910
A schedule of the Group‘s main direct and indirect subsidiaries and Kuehne + Nagel‘s share in the respective
equity is shown in the list of significant consolidated subsidiaries and Joint Ventures in the Consolidated
Financial Statements.
123 Financial Statements 2017 NOTES TO THE BAL ANCE SHEET
7 LIABILITIES TOWARDS GROUP COMPANIES
Kuehne + Nagel Ltd., Dublin 2 1

Kuehne + Nagel S.a.r.l., Luxembourg 11 29
Kuehne + Nagel S.A.S., Paris 106 12
Kuehne + Nagel N.V., Rotterdam – 21
Kuehne + Nagel NV/SA, Antwerp – 8
Kuehne + Nagel A/S, Copenhagen – 4
Kuehne + Nagel GmbH, Vienna 13 7
Kuehne + Nagel Ltd., London 1 –
Kuehne + Nagel Ltd., Singapore 2 –
Kuehne + Nagel Management Ltd., Singapore 1 –
Kuehne + Nagel (AG & Co.) KG, Hamburg – 163
Kuehne + Nagel Sp.z.o.o., Poznan 1 18
Kuehne + Nagel Real Esate Sp.z.o.o., Poznan 6 –
Kuehne + Nagel Ltd., Bermuda 12 18
Kuehne + Nagel Ltd., Hongkong 1 –
Kuehne + Nagel Ltd., Auckland 3 –
Kuehne + Nagel Kft., Budapest 3 8
Kuehne + Nagel Ltd., Sydney 1 1
Kuehne + Nagel Ltd., Shanghai 45 30
Kuehne + Nagel spol.s.r.o., Prague – 3
Kuehne + Nagel Investment S.a.r.l., Luxembourg – 13
Kuehne + Nagel Investment SL, Madrid 92 107
Kuehne + Nagel Investment AB, Stockholm 31 17
Kuehne + Nagel Inc., New York 79 180
Kuehne + Nagel Management AG, Schindellegi 181 129
Kuehne + Nagel AG, Zurich – 13
Nacora Insurance Brokers AG, Zürich 1 1
Nacora Holding AG, Schindellegi 21 19
Nacora Agencies AG, Schindellegi 62 60
Kuehne + Nagel LLC, Dubai 3 3
Other 4 9
Total 682 874
Financial Statements 2017 NOTES TO THE BAL ANCE SHEET 124
8 SHARE C APITAL
Share capital Registered CHF million

shares
at nominal
value of
CHF 1 each
Balance as of December 31, 2017 120,000,000 120
Authorised and conditional share capital

The Annual General Meeting held on May 3, 2016, extended its approval of authorised share capital up
to a maximum of CHF 20 million by another two years until May 3, 2018.
The Annual General Meeting held on May 2, 2005 approved a conditional share capital increase up to a
maximum of CHF 12 million and to add a respective section in the articles of association.
The Annual General Meeting held on May 8, 2012, approved a conditional share capital up to a maximum
of CHF 20 million for the provision of the employee share-based compensation plan of the company.
The Annual General Meeting held on May 5, 2015, approved a reduction of this conditional share capital
from CHF 20 million to CHF 2 million.
So far no use has been made of these rights. There is no resolution of the Board of Directors outstanding
for further issuance of either authorised or conditional capital.
9 RETAINED EARNINGS
Retained earnings CHF million
Balance as of January 1, 2016 (before earnings for the year) 449

Retained earnings as of December 31, 2016 (prior to appropriation of available earnings) 951
Distribution to the shareholders (representing CHF 5.50 per share) –658
Subtotal (before earnings for the year) 293
Earnings for the year 2017 1,440
Balance as of December 31, 2017 1,733
Capital contribution reserves CHF million
Capital contribution reserves as of December 31, 2017 6

Balance capital contribution reserves as of December 31, 2017 6
125 Financial Statements 2017 OTHER NOTES
10 TREASURY SHARES
Own Shares Number of All time low Maximum Average price Number of CHF million
transactions in CHF rate in CHF of transactions shares
during the during the in CHF
year year
Balance as of January 1, 2017 452,375 59

Purchases of own shares – – – – – –
Sale of own shares 17 113.40 179.40 130.34 –121,411 –16
Closing balance as of December 31, 2017 330,964 43
Treasury shares are valued at average cost or market value, whichever is less.
OTHER NOTES
11 PERSONNEL
The company has no employees and therefore utilises the central services of Kuehne + Nagel Management
AG, Schindellegi (Feusisberg) for its administrative requirements. The respective costs are included in other
operational expenses.
12 SHAREHOLDING OF MEMBERS OF THE BOARD OF DIRECTORS

AND MANAGEMENT BOARD
Shareholdings of members of the Board of Directors

As of December 31, 2017, the following number of shares were held by members of the Board of Directors
and/or parties closely associated with them.
Name 2017 2016
Klaus-Michael Kuehne (Honorary Chairman) 63,980,000 64,082,000

Dr. Joerg Wolle (Chairman) 58,000 58,000
Karl Gernandt (Vice Chairman) 1 74,880 70,400
Dr. Renato Fassbind 1,700 1,700
Juergen Fitschen – –
Hans Lerch 2,500 2,500
Dr. Thomas Staehelin 10,000 10,000
2
Hauke Stars – –
Dr. Martin C. Wittig – –
Total 64,127,080 64,224,600
1 Executive Chairman until May 3, 2016

2 As of May 3, 2016 member of the Board of Directors
Financial Statements 2017 OTHER NOTES 126
Shareholdings by members of the Management Board

As of December 31, 2017, the following number of the shares were held by members of the Management
Board and/or parties closely associated with them:
Name 2017 2016
Dr. Detlef Trefzger, Chief Executive Officer 40,943 35,343

Markus Blanka-Graff, Chief Financial Officer 13,750 12,000
Lothar Harings, Chief Human Resources Officer 19,089 21,289
Martin Kolbe, Chief Information Officer 27,685 23,485
Stefan Paul, Executive Vice President Overland 10,778 8,033
Horst Joachim Schacht, Executive Vice President Seafreight 31,329 28,279
Yngve Ruud, Executive Vice President Airfreight 1 28,350 27,650
Gianfranco Sgro, Executive Vice President Contract Logistics 5,900 4,500
Total 177,824 160,579
1 As of October 1, 2016 member of the Management Board.
13 MAJOR SHAREHOLDER
Detailed information in the Corporate Governance Report.
14 CONTINGENT LIABILITIES
For further information regarding contingent liabilities refer to note 44 of the Consolidated Financial
Statements.
15 PROPOSAL OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING

MAY 8, 2018, REGARDING THE APPROPRIATION OF THE AVAIL ABLE EARNINGS
For 2017 the Board of Directors is proposing a regular dividend amounting to CHF 5.75 per share for
approval at the Annual General Meeting. If the dividend proposal is approved by shareholders, dividend
payments will amount to CHF 688 million (2016: CHF 658 million) towards regular dividend resulting
in a payout ratio of 93.4 per cent (2016: 91.6 per cent) of the earnings for the year attributable to the
equity holders of the Company.
Available earnings CHF million
Balance as of January 1, 2017 (before income for the year) 293

Earnings for the year 2017 1,440
Available earnings as of December 31, 2017 1,733
1
Distribution to the shareholders (representing CHF 5.75 per share) –688
Retained earnings as of December 31, 2017 (after appropriation of available earnings) 1,045
1 T he total dividend amount covers all outstanding shares (as per December 31, 2017: 119,669,036 shares). However, shares held in treasury
on the date of the dividend declaration are not eligible for dividend payments. As a consequence, and if required, the reported total dividend
amount is adjusted accordingly.
127 Financial Statements 2017 REPORT OF THE STATUTORY AUDITOR
REPORT OF THE STATUTORY AUDITOR TO THE ANNUAL GENERAL MEETING

SWITZERL AND
As statutory auditor, we have audited the financial statements of Kuehne + Nagel International AG,
which comprise the income statement, balance sheet and notes on the pages 117 to 126 for the year ended
December 31, 2017.
Board of Directors’ responsibility

The Board of Directors is responsible for the preparation of the financial statements in accordance with the
requirements of Swiss law and the company’s articles of incorporation. This responsibility includes designing,
implementing and maintaining an internal control system relevant to the preparation of financial statements
that are free from material misstatement, whether due to fraud or error. The Board of Directors is further
responsible for selecting and applying appropriate accounting policies and making accounting estimates
that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance whether the financial statements are free from mate-
rial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation
of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system.
An audit also includes evaluating the appropriateness of the accounting policies used and the reasonable-
ness of accounting estimates made, as well as evaluating the overall presentation of the financial state-
ments. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the financial statements for the year ended December 31, 2017, comply with Swiss law and
the company’s articles of incorporation.
Report on key audit matters based on the circular 1/2015

of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed the
matter is provided in that context.
Financial Statements 2017 REPORT OF THE STATUTORY AUDITOR 128
We have fulfilled the responsibilities described in the Auditor’s responsibilities section of our report, including
in relation to these matters. Accordingly, our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement of the financial statements. The results of
our audit procedures, including the procedures performed to address the matters below, provide the basis
for our audit opinion on the financial statements.
Investments and related income statement accounts
Area of focus Primary functions of the Company include holding the investments in its subsidiaries as well as finan-
cing and monitoring the group’s activities. For statutory purposes, the Company is required to assess
the valuation of its investments and determine potential impairments on an individual basis (refer to
notes – accounting principles). We consider investments to subsidiaries and its related income state-
ment accounts significant to our audit as the assessment involve judgment in estimating – amongst
other factors – future revenues and margins, long-term growth and discount rates.
Our audit We examined the Company’s process of identifying investments which potentially are subject to an
response impairment and assessed the valuation model used in order to determine the recoverable amount. We
analyzed the underlying key assumptions, including future revenues and margins, long-term growth
and discount rates. We assessed the historical accuracy of the Company’s estimates and considered its
ability to produce accurate long-term forecasts. We evaluated the sensitivity in the valuation resulting
from changes to the key assumptions applied and compared these assumptions to corroborating infor-
mation, including expected inflation rates and market growth.
Report on other legal requirements

We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA)
and independence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible
with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that
an internal control system exist, which has been designed for the preparation of financial statements
according to the instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the
company’ s articles of incorporation. We recommend that the financial statements submitted to you be
approved.
Ernst & Young Ltd

(Auditor in Charge)

129 CORPORATE TIMETABLE 2018
April 24, 2018 Three-months 2018 results

May 8, 2018 Annual General Meeting
May 15, 2018 Dividend payment for 2017
July 19, 2018 Half-year 2018 results
October 18, 2018 Nine-months 2018 results
February 27, 2019 Full-year 2018 results
Kuehne + Nagel International AG
Kuehne + Nagel House
P.O. Box 67
CH-8834 Schindellegi
Telephone +41 (0) 44 786 95 11
Fax +41 (0) 44 786 95 95
www.kuehne-nagel.com

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Annual Report

CHF million 2017 2016 2015 2014 2013 2012 2011

Turnover 22,220 19,985 20,283 21,291 20,929 20,753 19,596

Basic earnings per share (nominal CHF 1) in CHF

Development of share price

1 Excluding treasury shares.

1 STATUS REPORT 37 CONSOLIDATED FINANCIAL

KEY FINANCIAL FIGURES

CHF million 2017 2016 Variance in

Turnover 22,220 19,985 11.2

Regional turnover Regional gross profit

22,220 19,985 20,283 21,291 7,023 6,550 6,251 6,288

Operational expenses Operational cash flow

5,886 5,482 5,211 5,306 1,148 1,062 1,045 1,000

1,150 1,110 1,041 1,005 937 918 850 819

Earnings for the year were positively impacted by FINANCIAL POSITION

800 Trade receivables amounting to CHF 3,537 million

Developments of other key financial indicators on

Kuehne + Nagel Group key figures on capital structure

Key figures on capital structure 2017 2016 2015 2014 2013

1 Total equity in relation to total assets at the end of the year.

7,457 6,331 6,099 6,603 7,457 6,331 6,099 6,603

Equity (incl. non-

2,175 Provisions for pension 2,453

5,000 Deferred and 5,000

1,170 1,000 1,000

INVESTMENTS, DEPRECIATION Investments in fixed assets/depreciation

total of CHF 225 million (2016: CHF 239 million)

amount into a new large-scale pharma logistics faci-

All capital expenditure in 2017 was financed

In 2017, the following major investments were 0

made in properties and buildings:

Location CHF million Centres

Moehlin, Switzerland 15 Construction of a large-scale pharma logistics facility

The allocation of investments in other fixed assets, opera-

CHF million 2017 2016

The allocation by region is as follows:

CHF million 2017 2016

EMEA 116 151

The allocation by business unit is as follows:

CHF million 2017 2016

Dividend earnings for the year attributable to the equity

Share price and market capitalisation (December 31)

Share price (in CHF) 172.50 134.60 137.80 135.30 117.10

Total shareholder return development

in CHF 2017 2016 2015 2014 2013

in CHF 2017 2016 2015 2014 2013

40.00 Dividend per share 5.50

35.00 Increase/(decrease) of the share price 37.90

Group risk management A risk is defined as the possibility of an adverse

Seafreight volumes: Market growth ~ 4–5% Performance Seafreight

Turnover 8,805 7,981 8,739

0 TEUs '000 4,355 4,053 3,820

Airfreight services for temperature-sensitive goods, pharmaceu-

Airfreight volumes: Market growth ~10% Performance Airfreight

Turnover 4,759 3,935 4,014

CHF million 2017 2016 2015

Turnover 3,356 3,130 2,825

Performance Contract Logistics