CEVA Holdings LLC
Results for the third quarter ended 30 September 2016
- Adjusted EBITDA of $75 million, up 19.0% vs. Q2 and flat vs. prior year in constant currency
- Top-line growth accelerating – from both Air and Ocean volumes, and Contract Logistics
- Freight Management EBITDA up 20.8% vs. prior year in constant currency driven by volume growth
- Contract Logistics EBITDA growth of 15.2% vs. Q2 through margin increase
- Strong implementation of our Operational Excellence Program, which will deliver material operational and financial benefits
- Headroom of more than $500 million
Hoofddorp, the Netherlands,14 November 2016 – CEVA Holdings LLC (“CEVA” or the “Company”), one of the world’s leading asset-light based supply chain management companies, today reported results for the third quarter ended 30 September 2016.
|Key Financials ($ millions)|
|Q3 2016||Q3 2016 in constant currency||Q3 2015||% change YoY||% change YoY constant FX|
|Adjusted EBITDA (a)||75||80||80||(6.3)||0.0|
(a) Adjusted EBITDA includes the proportional contribution of the Anji-CEVA joint venture and excludes the impact of specific items and share-based compensation
“CEVA’s top line performance continued in Q3. We have experienced good growth in Contract Logistics revenue driven by market share gains. Our Freight Management business line continues to outperform also, with volume growth in Air of 10.6% and Ocean of 4.4% both representing sequential improvements. We have had a number of customer wins in Q3 and our new business pipeline is strong. This demonstrates that our strategy is working and delivering results,” said Xavier Urbain, CEO.
“Our Operational Excellence Program is being implemented successfully and is anticipated to generate benefits that will accelerate in upcoming quarters. I am confident that the actions we continue to implement will drive robust performance in both our revenue and margins in 2017,” he continued.
Group Financial Performance
Revenue was $1,679 million in the third quarter, up 0.9% in constant currency driven by strong volume growth partially offset by declines in rates in Freight Management and good revenue growth in Contract Logistics.
Adjusted EBITDA was $75 million in the third quarter, up 19.0% sequentially and flat versus previous year in constant currency. Market share gains and cost reductions drove this performance.
Headroom as at 30 September 2016 was $524 million, an increase versus the $517 million in the prior year.
In Q3, Air volumes experienced an increase of 10.6% against a soft market. This can be attributed to a mix of new business and an increasing share of wallet with existing customers in numerous sectors and strong development in selected trade lanes. Ocean volumes grew at 4.4% despite an ongoing weak demand in the overall market. While revenue was down 1.4% in constant currency, reflecting unstable rates, EBITDA improved to $27 million, representing a YoY increase of $5 million in constant currency.
Robust developments in our Contract Logistics model resulted in good top line growth of 3.0% YoY in constant currency due to new business wins in multiple sectors, with continued successes in Healthcare, Consumer & Retail and Industrial. EBITDA was $38 million, down against previous year but much better than in Q2 with a 15.2% improvement as we continue to drive operational excellence and have made progress on performance issues in a limited number of facilities. Continued sales efforts and closing of facilities allowed a reduction in empty space in warehouses from 6.3% to 4.9%.
Operational Excellence Program
We are making good progress in our Operational Excellence Program, aimed at simplifying and applying consistent standards and best practices across the organization and have realized improvements in quality and cost during the quarter. We have implemented many initiatives successfully and have early impact. We anticipate that savings will accelerate in upcoming quarters and will support our performance in 2017.
For more information, please contact:
Vice President, Marketing & Communications
+41 41 547 00 44
CEVA - Making business flow
CEVA Logistics, one of the world’s leading non-asset based supply-chain management companies, designs and implements industry leading solutions for large and medium-size national and multinational companies. Approximately 41,000 employees in more than 160 countries are dedicated to delivering effective and robust supply-chain solutions across a variety of sectors where CEVA applies its operational expertise to provide best-in-class services across its integrated network. For more information, please visit www.cevalogistics.com.
SAFE HARBOR STATEMENT:
This news release may contain forward-looking statements. These statements include, but are not limited to, discussions regarding industry outlook, the Company’s expectations regarding the performance of its business, its liquidity and capital resources, its guidance for 2016 and beyond, and the other non-historical statements. These statements can be identified by the use of words such as “believes” “anticipates,” “expects,” “intends,” “plans,” “continues,” “estimates,” “predicts,” “projects,” “forecasts,” and similar expressions. All forward-looking statements are based on management’s current expectations and beliefs only as of the date of this press release and, in addition to the assumptions specifically mentioned in the above paragraphs, there are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including the effect of local and national economic, credit and capital market conditions, a downturn in the industries in which we operate (including the automotive industry and the airfreight business), risks associated with the Company’s global operations, fluctuations and increases in fuel prices, the Company’s substantial indebtedness, restrictions contained in its debt agreements and risks that it will be unable to compete effectively. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s annual and quarterly reports, available on the Company’s website, which investors are strongly encouraged to review. Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. CEVA disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.