NTG Nordic Transport Group: Navigating Challenges and Pursuing Growth in 2024

In the face of a challenging market environment, NTG Nordic Transport Group A/S (NTG) has demonstrated resilience and adaptability, maintaining and even improving its operating margins. As the company looks ahead to 2024, it remains committed to pursuing strategic mergers and acquisitions (M&A) to drive growth and achieve its medium-term financial target.

NTG's Road & Logistics and Air & Ocean divisions have both faced headwinds in recent years, with low freight rates, soft volumes, and oversupply of freight capacity. Despite these challenges, NTG has managed to increase its operating margin from 7.4% in 2022 to 7.6% in 2023. This improvement was driven by an increase in the operating margin of the Air & Ocean division, which rose from 6.9% to 8.5% (Company announcement no. 2 – 24, 29 February 2024).

To continue this trend in 2024, NTG plans to closely monitor the activity in both divisions and adjust capacity and cost base accordingly. The company expects the Road & Logistics division to persist in the current market environment, characterized by low freight rates, soft volumes, and challenging spot markets. For the Air & Ocean division, NTG anticipates continuous operation in the current market environment, characterized by low freight rates and oversupply of freight capacity, which may result in adverse impacts for both freight rates and yields (Company announcement no. 2 – 24, 29 February 2024).

NTG's scalable business model and flexible organization have allowed the company to adapt to changing market conditions and adjust its operations accordingly. By cooperating with customers and business partners, NTG has been able to manage the adverse environment and maintain its operating margins (Company announcement no. 2 – 24, 29 February 2024).

In addition to its operational strategies, NTG remains committed to actively pursuing M&A opportunities in 2024, aligned with its strategic priorities. The company aims to achieve DKK 1 billion in adjusted EBIT no later than by the end of 2027, based on a combination of organic growth and M&A. NTG expects to realize this target through redeployment of free cash flow and by utilizing existing credit facilities of the Group, subject to a ratio of net-interest bearing debt to EBITDA of less than 3.0 and no capital increases (Company announcement no. 2 – 24, 29 February 2024).

NTG's medium-term target is based on the key assumptions of no additional material adverse events affecting regional and global cargo volumes and trade patterns. The company's ability to achieve this goal will depend on its capacity to navigate the challenging market environment, adapt to changing conditions, and successfully execute its M&A agenda.

In conclusion, NTG Nordic Transport Group A/S has demonstrated its ability to maintain and improve operating margins in the face of challenging market conditions. By closely monitoring market activity, adjusting capacity and cost base, and pursuing strategic M&A opportunities, NTG plans to continue this trend in 2024 and achieve its medium-term financial target.