Little visibility for 2020/21, but underlying fundamentals remain strong
FM Logistic has published its results for the fiscal year 2019/20 ended on 31 March 2020. It posted revenues of €1.43 billion for the fiscal year 2019/20, up 8.7% from a year earlier (8.0% excluding FX effects). Earnings before interest and taxes (EBIT) were €42.5 million, up 21.0% compared with the previous year. These results reflect the Company’s focus on growing more selectively and profitably, thanks to strong customer relationships and improved operational performance.
Revenue growth was entirely organic, supported by strong sales execution and the introduction of new services, particularly in the omnichannel and urban logistics areas. Revenues were well distributed across geographies, with France representing 38.0% and other countries 62.0%. Revenue in France grew 7.7% to €550.0 million. In central and eastern Europe, revenue growth ranged from 8.0% to 16.0%.
FM Logistic continued to build its presence in emerging markets. It opened new multi-client warehouses and distribution centres in India and Vietnam to meet the long-term demand for higher end supply chain services and facilities. FM Logistic gained multiple new contracts in Vietnam. The turnaround of the Brazil business continued under the leadership of the managing director appointed in 2019. The Ukraine unit confirmed its turnaround.
FM Logistic maintained commercial momentum in 2019/20 by signing new contracts worth more than €150.0 million. Sales growth was especially strong in the cosmetics/beauty (+20.0%) and eCommerce logistics sectors, particularly in France, Spain, India and Russia. In the latter country, eCommerce volumes handled by FM Logistic rose 32.0% in 2019 from the previous year. In France, FM Logistic won a major contract to supply eCommerce logistics services to a large international retailer.
Revenue growth was also supported by the introduction of new services meeting consumer trends, such as the rise in eCommerce and sustainability. As an example, FM Logistic introduced supply chain solutions for manufacturers and retailers that sell bulk products in retail stores and supermarkets, as well as dropshipping services for manufacturers who sell their products directly to consumers via marketplaces.
Transport revenue exceeded €500.0 million (36.0% of the total). It benefited from the expansion of less-than-truckload (LTL) as well as urban logistics services. The FM Logistic Citylogin service, which combines last-mile deliveries and small urban logistics hubs, is now available in about 30 cities in Europe. The latest additions to the list are the Spanish towns of Bilbao, Saragoza and Cordoba.
In 2019/20, FM Logistic took additional steps to contribute to a more sustainable supply chain. These included a work safety programme in all 14 countries where it operates, the joint development, together with the French engineering school UTC, of an ergoskeleton designed for warehouse pickers, the provision of customer-specific information about the environmental and social impact of the services FM Logistic provides and the start of a zero waste project. Thanks to these efforts, FM Logistic received the EcoVadis Gold rating, placing it in the top 5.0% of companies for corporate social responsibility (CSR) performance.
FM Logistic also continued automating selected warehouse and office processes. Additional AGVs and robotic arms have been put into operation. The number of users of MySCM, the company’s online customer portal, increased by 9.5%. Digitalisation of transport documents was also a focus.
After growing at 9.3 % in 2018/19, the growth in staff numbers slowed down to 1.3% in 2019/20. This reflects the success of skills development efforts and training programmes, particularly in warehousing operations. FM Logistic employs an annual average of 27,500 FTE employees.
The Covid-19 outbreak had a limited impact on the financial year ended in March 2020. However, the start to the new fiscal year has been more challenging. In April and May 2020, the Company saw an overall 9.0% revenue decrease compared with the previous year and a significant increase in operational costs related to anti Covid-19 prevention measures.
Almost all the Company’s sites are operational. Most importantly, it has some substantial strengths, namely a sound financial situation, a balanced customer portfolio of food and non-food FMCG companies and retailers, e-logistics ability, a mostly domestic activity and a stable family shareholding structure.