Baar, Switzerland, 29 April, 2019 – CEVA Logistics AG (“CEVA” or the “Company”) held its Annual General Meeting (AGM) today, which approved all resolutions and appointed a new Board of Directors. CEVA also announces its results for the first quarter of 2019.
CEVA held its Annual General Meeting (AGM) earlier today. All resolutions were approved by shareholders. Among the key resolutions was the proposal to renew governance following CMA CGM’s successful completion of its Public Tender Offer to acquire CEVA.
Rodolphe Saadé, Chairman and Chief Executive Officer of CMA CGM, has been elected as Chairman of the CEVA Board of Directors, with Rolf Watter acting as Vice-Chairman.
Marvin O. Schlanger, Victor Balli, Dr. Rosalind Rivaz and John F. Smith did not stand for re-election. Rolf Watter, Daniel Hurstel and Emanuel R. Pearlman were re-elected for a one-year term of office until the AGM 2020. Three new Board members have been elected: Farid Salem, Michel Sirat and Béatrice de Clermont-Tonnerre.
The three independent directors are Rolf Watter, Manny Pearlman and Béatrice de Clermont-Tonnerre. Finally, KPMG has been elected as the independent auditor for the next one year term of office until the AGM 2020.
Nicolas Sartini, who currently holds the position of Group Chief Operating Officer and Deputy CEO is appointed Chief Executive Officer as from June 1st. He will bring his experience and expertise to CEVA as it embarks on a new journey. He will replace Xavier Urbain who will become Executive Advisor to Rodolphe Saadé.
After the settlement of the public tender offer and taking into account additional shares CMA CGM has subsequently purchased in the market, it now holds more than 98% of the share capital and voting rights of CEVA.
CMA CGM will therefore proceed with the squeeze out procedure and will file the claim for cancellation of the remaining outstanding CEVA shares.
|Key Financials for the First Quarter||2019||IFRS 16||2019||2018||Change YoY||Change YoY constant FX|
|(USD million)||Reported||Impact||Pre-IFRS 16||Reported||Pre-IFRS 16||Pre-IFRS 16|
|EBITDA margin||7.9%||5.8%||2.1%||3.0%||-90 bps||-90 bps|
|Adjusted EBITDA (b)||147||100||47||66||-28.8%||-24.2%|
|Net Debt as of March 31||2,427||1,161||1,266||2,228||-43.2%|
(a) EBITDA excludes specific items and share-based compensation cost (SBC) in the table and in the whole document.
(b) Adjusted EBITDA includes the 50 % share of the Anji-CEVA joint venture and excludes specific items and share-based compensation cost.
In the first quarter of 2019, revenue increased by 1.1% in constant currencies to US$1,698 million.
On a reported basis, the revenue in the first quarter declined by 5.2% year-on-year due to negative translation of foreign currencies such as the BRL, the TRY, the EUR and the AUD into USD.
Revenue at Anji-CEVA Joint Venture (owned 50% by CEVA) amounted to US$369 million, an increase of 6.6% compared to the same period of 2018. In constant currency, the revenue increased by 13.2%.
Revenue in Freight Management decreased by 0.7% to US$797 million in the first quarter of 2019 (Q1 2018: US$803 million). In constant FX, revenue increased by 3.8% year-on-year. CEVA continued to experience good volume growth in Ocean, up 6.2 % year-on-year to 192,900 TEUs, ahead of market growth. Ocean yield (Net revenue /TEU), was a robust US$288 /TEU, which represents a strong increase compared with the fourth quarter of 2018 (US$226 /TEU). Air volumes decreased by 6.9% year-on-year, mainly from downtrading of some trade lanes and a selective approach to new business whilst Air yield (Net revenue per ton) has increased by 2.2% to 806 US$/t.
Revenue in Contract Logistics decreased by 8.7% to US$901 million in the first quarter of 2019 (Q1 2018: US$987 million) as significant currency impact has hit major geographies (Turkey, Brazil and Australia). In constant FX, revenue decreased by 1.1% year-on-year. The company handled solid volumes in some existing contracts. The retention rate in Contract Logistics has significantly improved in the first quarter of 2019.
The Group’s EBITDA 1 was US$134 million in the first quarter of 2019. On a pre-IFRS 16 basis the Group’s EBITDA represented US$36 million resulting in an EBITDA margin of 2.1%.
EBITDA continues to be negatively impacted by the performance in Contract Logistics in Italy as the contract issues are in the process of being solved on one contract whilst an additional provision of US$10 million was created for the second challenging contract. In addition, despite stronger yields (Net revenue per tonne), Air Freight has experienced a relatively slow start to the year with weaker volumes than in the same period last year. Furthermore, the translation effect of some currencies into US$, as mentioned above for revenue, negatively impacted EBITDA by a further US$3 million in the first quarter of 2019.
Pre-IFRS 16 EBITDA at Anji-CEVA Joint Venture for the first quarter of 2019 was US$22 million.
Group Adjusted EBITDA (on a pre-IFRS 16 basis) in the first quarter of 2019 amounted to US$47 million.
EBITDA was down US$2 million year-on-year to US$13 million in the first quarter of 2019. EBITDA margin was down 30bps at 1.6% for the first quarter of 2019, compared to the same period of 2018. Meanwhile, productivity actions continued to deliver improvement in the File per Operator ratio in both Air (up 3%) and Ocean (up 3.5%).
Contract Logistics EBITDA was down by US$15 million to US$23 million for the first quarter of 2019 (Q1 2018: US$38 million). Despite productivity improvements in the majority of geographies and structural margin improvement in several low margin contracts, one of the two challenging contracts in Italy continued to weigh on the Group’s overall performance, and an additional provision of US$10 million was taken as described above. In addition, unexpected factory shutdowns in the automotive sector have negatively impacted performance in Central Europe and Brazil. As a consequence, the EBITDA margin was down 130 bps in the first quarter of 2019 compared to the same period of 2018,to 2.6%.
1 EBITDA excludes specific items and share-based compensation cost (SBC).
As of 31 March, 2019, the company had a net debt of US$2,427 million, representing on a pre-IFRS 16 basis US$1,266 million, down 43% compared to US$2,228 million as of 31 March, 2018.
This decrease is in line with the significant de-leveraging following the Initial Public Offering.
CEVA experienced continued strong momentum with new business wins up 12% in the first quarter of 2019.
Significant new contracts and extensions were won in the first three months:
The strategic partnership with CMA CGM is also delivering additional revenues.
Despite a challenging global environment in the beginning of the year, CEVA has performed in line with its roadmap and targets and achieved a number of productivity improvements. The implementation of CEVA's new strategic plan, prepared jointly with CMA CGM, and the close cooperation between the teams of the two companies are going to drive an improvement in CEVA's financial performance and help it turn around quickly.
This cooperation will be further improved with the opening of a CEVA operational center in Marseilles to bring together CEVA’s management teams and support functions, i.e. 200 jobs (creation and transfer).
Therefore CEVA is confirming its medium term targets for 2021:
Management expectations remain that 2019 will see progress in line with the 2021 objectives, including improvement in EBITDA margin and in free cash flow.
An Investor Call is planned on Tuesday, 30 April 2019 at 9AM UKT / 10AM CET.
A presentation will be available in CEVA’s website / IR section on Tuesday, 30 April at 7:00am CET.
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