Rapidly expanding Scan Global Logistics (SGL) has announced plans for further acquisitions, focusing on growth in key markets.
In its full-year results announcement, SGL explained that its acquisition strategy has primarily aimed at expanding its geographical footprint. This approach will persist in larger markets, but the company’s merger and acquisition (M&A) strategy will now also aim to achieve scale and volume in crucial markets, particularly in major economies.
SGL emphasized its intention to continue a targeted M&A strategy to ensure it has a presence in all essential countries and markets needed to serve global customers effectively.
“The logistics industry is still fragmented, and SGL sees considerable opportunities for consolidation, positioning itself increasingly as the preferred acquirer,” the company stated.
“M&A efforts will also focus on rapidly building capabilities across the organization in high-touch, non-cyclical sectors like pharmaceuticals and healthcare, automotive, aid and relief, and government and defense.”
“In terms of size, we anticipate larger but fewer M&As as SGL approaches the final phase of its geographical expansion. Future M&A investments will be increasingly concentrated in countries with strong underlying growth.”
The company is also aiming for aggressive organic growth, targeting double-digit improvements across all regions, transportation modes, and industries.
To support organic growth, SGL has made substantial investments in sales support functions such as tender management, procurement, and supply chain development.
SGL also shared its full-year 2023 results, reporting declines in revenue, air volumes, and profits. Revenues dropped by 39.3% year-on-year to €2 billion, earnings before interest and tax (EBIT) fell by 29.1% to €95 million, and the company reported a loss of €33 million, compared to a profit of €63 million in 2022. Airfreight volumes decreased by 12% to 150,000 tonnes.
“The revenue decline was mainly due to a challenging macroeconomic environment, lower freight rates, and reduced air volumes,” SGL explained. “This was generally in line with our expectations.”
The company attributed the EBIT performance to increased special items and amortization costs from acquisitions and IT expenses. Special items rose due to costs associated with the acquisition by CVC at the beginning of 2023.
Despite the challenges, SGL noted an improvement in its gross profit margin, which rose from 14.1% in 2022 to 23.2% in 2023.