CEVA has robust First Quarter 2017

02.05.2017 / 20:14

CEVA Holdings LLC - Results for the Quarter One ended 31 March 2017

  • Good growth with revenue up 5% YoY in constant currency, both in Freight Management and Contract Logistics
  • Continued profitability improvement: Adjusted EBITDA of $54 million, up $2 million in constant currency, despite volatile market conditions and comparative
  • Delivering cost savings through Operational Excellence Program
  • Operating cash flow improved by $13 million reflecting continued focus on cash
  • ANJI-CEVA joint venture renewed for 15 years
  • Refinancing of key 2018 maturities successfully completed

Hoofddorp, the Netherlands, 3 May, 2017 – 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 first quarter of the year ended 31 March, 2017.

Key Financials ($ millions)  
  Q1 2017 Q1 2017 in constant currency Q1 2016 change YoY change YoY constant FX
Revenue 1,596 1,645 1,566 1.9 % 5.0 %
Adjusted EBITDA (a)   54 57 55 (1) 2
 (a)  Adjusted EBITDA includes the proportional contribution of the ANJI-CEVA joint venture and excludes specific items and share-based compensation cost

“2017 has begun positively, with volume, revenue and profit growth” said Xavier Urbain, CEO of CEVA. “Our top-line performance demonstrates the strength of our service offerings and solutions, of our relationships and the confidence customers place in us. We have recently achieved a number of important new business wins, notably in Contract Logistics, which we expect to have positive effects in the coming months.”

“Our Operational Excellence Program to simplify and standardize our processes is having a visible impact and is delivering significant cost savings. We are also making good progress in improving our key contracts and markets, in particular the US. The renewal of the ANJI-CEVA joint venture in China and recent refinancing transactions are equally strong endorsements of CEVA’s direction.  We are well on track for a stronger year.”

Freight Management

Freight Management volumes have once again shown strong growth: Air Freight was up 9% YoY and Ocean Freight was up 6% YoY, resulting in a revenue growth of 5% YoY in constant currency.

Net revenue margins were under pressure from transportation rate increases in line with the market, however we were able to maintain our EBITDA as those pressures were offset through productivity improvements and cost savings generated by our Operational Excellence Program.

Contract Logistics

Revenue in Contract Logistics was up 5% in constant currency in the first quarter, reflecting implementation of new business wins as well as growth in existing contracts.

Contract Logistics EBITDA increased $1m YoY in the first quarter in constant currency despite a strong comparative. This was driven by volume increases as well as efficiency improvements and cost savings, notably on some of our larger contracts.

Financial results

First Quarter gross revenues were $1.6 billion, up 5% in constant currency and up 2% in actual currency.

Adjusted EBITDA came in at $54 million, up $2 million in constant currency versus the prior year.

Operating cash flow in the first quarter improved $13 million YoY reflecting the continued focus on working capital and cash.

Refinancing and Joint Venture

CEVA successfully completed a private offer to exchange approximately 90% of its 4% First Lien Notes due May 2018 for new Notes due 2020 that pay 6% cash and 3% PIK interest per annum.

In addition, CEVA extended the maturity of its European securitization facility for an additional two years until March 2020 and has increased the facility capacity by €80 million to €250 million.

At the end of March, CEVA and ANJI Automotive Logistics signed definitive agreements to extend their 50/50 joint venture partnership ANJI-CEVA until 2032.  CEVA looks forward to the continued growth of this strong long-term partnership.

For more information, please contact:

David Urbach
SVP Corporate Development
+41 799 333 083

Pilot Marketing
Derek Jones dj@pilotmarketing.co.uk
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 40,000 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.

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 or joint ventures, its liquidity and capital resources, its guidance for 2017 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 Air freight 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.