2015 Full Year Results Demonstrate Strength of Operating Model

01.03.2016 / 05:46

CEVA Holdings LLC 
Results for the Full Year ended 31 December 2015 

  • Topline reflects an overall stable performance in constant currency. Continued outperformance highlighted by 22% year-on-year EBITDA growth in 2015 in constant currency.(a) 
  • Cash flow from operating activities improved by $185 million, to $27 million 
  • Freight Management EBITDA of $70 million resulted in 241% improvement in constant currency. Trade lane management and process improvements contributed to strong performance despite short peak season
  • Continued efficiency improvements and new business wins in Contract Logistics with current pipeline up 14% over prior year
  • 2015 new business pipeline consistently above prior year. A 45% increase in field sales teams, year-on-year, resulted in significant new business wins in 2015 and a strong pipeline for 2016.
     

Hoofddorp, the Netherlands, 1 March, 2016 – CEVA Holdings LLC (“CEVA” or the “Company”), one of the world’s leading non‐asset based supply chain management companies, today reported results for the full year 2015 ended 31 December 2015.

Key Financials ($ millions) Full Year
  Full Year 2015 Full Year 2014 % Change % Change Constant FX
Revenue(a) 6,959 7,757 (10.3)% (0.5)%
Adjusted EBITDA (b) 272 239 13.8% 22.2%
  Quarter
  Q4 2015 Q4 2014 % Change

% Change Constant FX

Revenue(a) 1,721 1,989 (13.5)% (5.1)%
Adjusted EBITDA(a) (b) 66 74 (10.8)% (1.4)%


a) Reported revenue and Adjusted EBITDA for FY2014 amounts to $7,864 million and $242 million respectively. Q4 2014 amounts to $2,029 million and $75 million respectively. Key Financials table above excludes the impact of disposals representing $107 million for revenue and $3 million of EBITDA in the last 8 months of the year 2014 (disposal completed 29 April 2015) and $40 million of revenue and $1 million EBITDA in Q4 2014.

b) Adjusted EBITDA includes the proportional contribution of the Anji-CEVA joint venture and excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.

“CEVA’s 2015 year-end performance is the latest in a series of strong quarters for our company. We see that the execution of our new strategy, launched in 2015, is delivering tangible results despite the volatile year-end economic environment and short peak season. Of our 17 geographical clusters, 15 performed at or above expectations in 2015, which shows that our operating model is working. We also see a number of opportunities to further improve our EBITDA in 2016 driven by continued investments in our field sales teams and operations,” said Xavier Urbain, CEO of CEVA. 

“Ongoing process and product improvements in all business lines continues to pay off and our emphasis on quality trade lanes allowed us to gain share on key routes during the course of the year. Our organizational transformation continues and we’ve recently renewed our focus on enhancing opportunities within our Ground transportation organization. CEVA’s assertive investment in field sales teams has led to successfully capturing new customers in 2015, particularly with small to medium enterprises.”

Freight Management

Freight Management adjusted EBITDA improved to $70 million, year-on-year, in constant currency, an increase of 241%. Q4 EBITDA performance was $15 million, up 20% year-on-year in constant currency. Full year air freight volumes increased marginally and despite a short peak season, Asia exports performed relatively well in Q4. Air Freight outperformed the market in Q4 due to a number of new business wins on selected tradelanes from Europe to China. Ocean volumes underperformed against market, however, we continue our focus on attractive tradelanes. A strategic procurement approach in a low-rate environment contributed to margin improvements in both Air Freight and Ocean Freight.  
 
The Freight Management new business pipeline continued to grow in Q4, 12% above prior year. The business line also continues to focus on system enhancements, process improvements and cost controls. A renewed emphasis on our Ground transportation activities and an initial focus on strengthening our operations in the US are expected to bring additional benefits in the future.

Contract Logistics

In the face of volatile market conditions, Contract Logistics full year revenues increased 1.5% year-on-year when adjusted for disposals in constant currency, resulting in stable EBITDA performance of $202 million, like-for-like. Q4 revenues came in slightly lower, driven by reduced volumes in certain geographical regions as well as economic volatility. However, Consumer & Retail and Healthcare customer volumes have shown continued growth in Q4 2015. This negatively impacted Q4 EBITDA performance of $51 million, down 6.8% like-for-like. The business line continues its focus on driving service level improvements and productivity through best practices and benchmarking.  
    
The Contract Logistics pipeline continued its upward trend closing 14% higher, year-on-year, with significant opportunities in Automotive, Healthcare and Consumer & Retail. However, significant long-term wins and strong renewals position us well for 2016 and beyond. Although we anticipate a challenging economic environment over the next 12-24 months we expect positive developments in our 4PL business in 2016. 

Business Development

CEVA’s overall business pipeline remains strong. Our full year hit rate was 21% in Contract Logistics and 28% in Freight Management, both consistent with the prior year. 2015 also saw extraordinary growth in our field sales teams with a 45% increase in FTE over the prior year.
                                    
In light of market headwinds, CEVA’s strong performance in 2015 is the result of across-the-board improvements and we have identified opportunities to ensure our business remains resilient. This is a direct result of our strong operating model, the seasoned management team put in place one year ago as well as our dedicated workforce around the globe.


For more information, please contact:    

Nancy Jewell
Vice President Global Communications
nancy.jewell@cevalogistics.com
+41 41 547 00 44


Pilot Marketing
Derek Jones dj@pilotmarketing.co.uk 

Or

Cathy Howe ch@pilotmarketing.co.uk 
London, UK
+44 20 8941 5381


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.