¹ Segmental EBITDA and Revenue numbers excludes the impact of specific items
^(a) Key Financials table above exclude the impact of disposals representing $45 million for revenue and $1 million on EBITDA in H1 2015.
^(b)  Adjusted EBITDA includes the proportional contribution of the Anji-CEVA joint venture ($19m) and excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.

  
“CEVA’s forward momentum continues in line with our strategy. Our half-year performance demonstrated stable net revenue in the first half driven by above-market growth in air and ocean freight and resumed growth in Contract Logistics,” said Xavier Urbain, CEO. “This is good progress, however we won’t stop here. As the logical next step in CEVA’s evolution, a global operational excellence program was started in April to take the organization to the next level by simplifying and applying consistent standards and best practices across the organization with the goal of better serving our customers. This program will also help us to deliver additional productivity improvements for all our business lines.”

“We have successfully introduced a new structure for Freight Management in the US and have an experienced management team in place. With the roll-out of our One Freight System in North America, CEVA can now provide customer shipment oversight through a single, global freight management system. Our ongoing investment in field sales teams led to a number of significant new business wins and renewals in the Automotive, Consumer & Retail and Technology sectors.”

Freight Management

Freight Management EBITDA was $30 million, reflecting a YoY increase of 32.0% in constant currency. In the first half, improvements in direct expenses were achieved while net revenue margins remained stable. In Q2, and in the face of a flat market, Air volumes increased 6.6% and Ocean volume up 2.2% YoY despite an ongoing reduction in demand. 

This above-market performance can be attributed to our continued focus on trade lane optimization coupled with ongoing investments in field sales. This approach has also led to significant growth with a diverse mix of small to medium-sized and multinational companies in non-cyclical sectors. At the same time, we maintain our strong focus on best practice implementation, procurement excellence and standardization, structural optimization as well as active, day-to-day cost management. CEVA and our customers will now also maintain better shipment visibility through our global One Freight System. 

In the US, CEVA’s Ground business is yielding positive results from its successful transformation program, reflected in improved net revenue margins.

Contract Logistics

Our robust Contract Logistics model resulted in a stable top line despite reduced economic headwinds. Contract Logistics EBITDA was $69 million, down 8.6% YoY in constant currency. Contract Logistics is back to top line growth due to a number of new business wins which are partially offset by low throughput in existing contracts.

We remain committed to investing in our future and have a number of start-up projects which have resulted in a temporary margin contraction but will deliver stronger returns in the near future. We also reduced our empty warehouse space by 11.8%, from 6.1% to 5.5% empty sqm, over Q1 2016 as a result of our continued sales focus on underutilized warehouses.