Scan Global Logistics (SGL), a fast-growing company, has announced its plans to continue making acquisitions in order to expand in key markets. The company’s acquisition strategy has been focused on increasing its geographical presence, and it intends to keep this approach, particularly in larger markets. Additionally, SGL aims to achieve scale and volumes in key markets, especially in larger economies, through targeted mergers and acquisitions (M&A).
SGL recognizes the fragmented nature of the industry and sees opportunities for consolidation, positioning itself as the acquirer of choice. The company also plans to use M&A to develop capabilities in non-cyclical verticals such as pharma, healthcare, automotive, aid and relief, as well as government and defense. Moving forward, SGL anticipates larger M&As but fewer transactions as it nears the completion of its geographical expansion cycle. Investments will be targeted in countries with strong underlying growth.
In addition to acquisitions, SGL is focused on achieving “extreme” organic growth by driving double-digit improvements across all regions, transport modes, and industries. The company has made significant investments in sales support functions to facilitate organic growth. Despite a decline in revenues, air volumes, and profits in their full-year 2023 results, SGL remains optimistic about its performance, attributing the decrease to challenging macro conditions, lower freight rates, and decreased air volumes, among other factors.
Furthermore, SGL highlighted an increase in special items and amortization costs from acquisitions and IT expenses, leading to a loss in 2023. The decline in airfreight volumes was influenced by overall market conditions. Despite these challenges, SGL noted an improvement in gross profit margin in 2023 compared to the previous year. The company’s emphasis on acquisitions, organic growth, and strategic investments reflects its commitment to expanding its presence and enhancing its capabilities in the global logistics market.
