Waberer’s Achieves Record Year, Launches Comprehensive ESG Strategy

Alongside financial success, Waberer’s also laid out its first group-wide ESG strategy, focusing on reducing carbon emissions, enhancing employee diversity, and promoting female leadership.

Listed in the Premium category of the Budapest Stock Exchange, the company’s revenue increased by 4.6%, while net profit jumped 53.6% to €29.7 mln. Waberer’s EBIT operating profit increased by 17%, while EBITDA grew by 14.8%, reaching record levels for both indicators. The company’s EBIT and EBITDA margins also improved, with the former rising from 5.4 to 6% and the latter from 12.3 to 13.4%, thanks to profit growing faster than sales.

According to CEO Zsolt Barna, Waberer’s International had an eventful year after industrial production and consumption in Western Europe and Hungary, and its main markets stagnated or slightly declined throughout the last year. This directly impacted the demand for logistics services, while the domestic insurance market, which was also important for the company, had to cope with the challenges posed by the special tax.

In this volatile environment, Waberer’s focused on segments and customers less affected by the overall negative economic environment, well supported by the company’s diversified customer and service portfolio. Despite the challenging environment, the company’s Board of Directors will propose a dividend of HUF 120 per share at its annual meeting in April (up from last year’s dividend of HUF 100).

Waberer’s strategy focuses on the Contract Logistics (RCL) business, which saw revenues increase by 5.2% to EUR 209.8 mln and EBIT increase by 37.3% to EUR 15.3 mln. This growth was attributed to the expansion of automotive and petrochemical production support logistics and successful customer acquisitions.

Revenue Increases

The Freight and Transport (ITS) segment saw a revenue increase of 2.8% to EUR 437.3 mln in 2023, but its EBIT decreased by 9.7% to EUR 8.9 mln. Despite facing increased price competition in the spot market and a decline in demand for freight in Europe, the segment maintained a result similar to the previous year due to its stable key account customers.

Waberer’s Insurance achieved revenues of EUR 82.4 mln (up by 17.7%) and an EBIT result of EUR 18.6 mln (+19.3%) in 2023. The growth in the contract book and outstanding investment performance contributed to the positive EBIT performance.

Barna said the company aims to become the leading complex logistics service provider in Central and Eastern Europe. The goal is to significantly increase revenue and operating profit by 2027, almost doubling the 2022 figures. Sustainability will play a vital role in the implementation of the strategy, with the development of green services by increasing rail and intermodal transport and aiming to reduce emissions through green investments and energy efficiency measures.

Progress can already be seen with developments and acquisitions in 2023, such as the warehouse development in Ecser (25 km east of central Budapest by road) and a new logistics center in Debrecen (231 km east of the capital). In addition, Waberer’s announced the acquisition of a majority stake in PSP (Petrolsped) Group and a majority stake in the Serbian distribution company MDI. For the coming year, Waberer’s expects sales of around EUR 800 mln and EBIT of more than EUR 40 mln.

The Waberer’s Group is also tackling its carbon emissions with a fleet of electric trucks, alternative fuels and a combination of rail and road transport. The company’s first comprehensive, group-wide ESG strategy addresses employee diversity and targets increasing the proportion of female employees in addition to further developing greener services. 

The company says it has for many years been prioritizing the development of its sustainable services portfolio and actively responding to issues affecting the sector, such as labor shortages and low female employee participation, but for the first time, it has organized its objectives along ESG lines into a complex entity. In an unusual move for the industry, Waberer’s publicly launched its ESG strategy at a Women’s Day brunch exclusively for female partners.

High Expectations

“ESG compliance is not only important for investors looking for ESG considerations, but also for employees, especially younger ones, and customers with high expectations,” said Krisztina Patai, ESG director at Waberer’s.

“The majority of our clients are large companies that also have a sustainability strategy, and typically, they have set expectations for their subcontractors. At Waberer’s, we have already taken many measures to reduce carbon emissions and ‘green’ our operations, for example, and we have also announced several initiatives for our employees. However, for the first time, we have organized these efforts into a complex entity that forms our ESG strategy along the environmental, social and governance sustainability pillars,” Patai added.

In addition to its environmental commitments, Waberer’s has set out several ambitions for its employees. In recent years, the group says it has done much to promote employee well-being and satisfaction, including special training, health promotion, and community-building programs.

In the future, it will continue to focus on creating and maintaining an attractive and progressive workplace, offering professional training and monitoring points for improvement. An important objective is to sensitize employees on issues such as non-prejudice and equal opportunities.

Diversity and gender equality are also crucial to the strategy. The labor shortage is significant in the logistics sector, so the company also employs foreign workers to a lesser extent, but the 3,700 driver roles in the company’s workforce offer many opportunities to strengthen the employee community.

Waberer’s says it is already at the forefront of increasing the female gender ratio: a significant proportion of its managers are women, it provides female mentors to train women drivers, and last year established the “Female Logistics Professional of the Year” award to highlight successful women in the profession. These initiatives will continue this year and Waberer’s says it is looking for more ways to help recruit female colleagues.

This article was first published in the Budapest Business Journal print issue of April 8, 2024.