CEVA continues to deliver good results in Q1 2018 - CILT(UK)
Search
Search
You are here: Home > News > Latest News

BLDC24 Wide Skyscraper advert




  



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 


LATEST NEWS

CEVA continues to deliver good results in Q1 2018

15 May 2018/Categories: CILT, Industry News, Freight Forwarding, Logistics & Supply Chain


CEVA Logistics AG, one of the leading asset-light third-party logistics companies, has announced its results for the quarter ended 31 March 2018. 

Key Financials
($ million)

Q1 2018

Q1 2017

Change YoY

Change YoY constant FX

Revenue

1,790

1,596

12.2%

5.4%

EBITDA (a)

53

45

17.8%

17.8%

EBITDA margin

3.0%

2.8%

20 bps

40 bps

Adjusted EBITDA (b)

66

54

22.2%

20.0%

 

 (a)  EBITDA excludes specific items and share-based compensation cost

 (b)  Adjusted EBITDA includes the proportional contribution of the ANJI-CEVA joint venture and excludes specific items and share-based compensation cost


“I am pleased to report another good quarterly result. Q1 2018 has shown once more that CEVA is delivering on its transformation with continued growth and consistent EBITDA improvement. We’ve seen good momentum and had several new business wins. We have further improved productivity and reduced cost” said Xavier Urbain, CEO of CEVA Logistics. “The successful IPO opens a new chapter for CEVA. The deleveraged balance sheet and the strategic investment by CMA CGM will create important growth opportunities. I am confident that we can further improve margins and deliver significant earnings growth in the years to come – our target is to improve Adjusted EBITDA by $100 million in the medium-term.”

 

 

Freight Management

 

Revenue in Freight Management was $803 million in the first quarter of 2018, an increase of 14.4% year-on-year or 8.7% in constant currency on the basis of good volumes, new business wins and higher freight rates, notably in Air.

 

 

Revenue in Air Freight was strong with an increase of 21.8% year-on-year. Volume growth at 1.6% was lower than in prior quarters reflecting the delayed onboarding of new business wins and certain contract losses. Yields (Net Revenue per ton), however, were up 17.1% year-on-year driven by better procurement and active margin management.

 

 

Revenue in Ocean Freight increased by 13.8% year-on-year. Ocean Freight volumes have increased 8.5% with good growth in all key trade lanes and market share wins. Yields in Ocean (Net Revenue per TEU) were broadly flat. Revenue in our other Freight Management activities increased 6.3%. 

 

 

Freight Management EBITDA increased by $5 million or 50% to $15 million, supported by yield improvements, continued productivity increases and efficiencies. EBITDA margin improved by 50 basis points to 1.9% in the seasonally lowest quarter. 

 

 

Contract Logistics

 

Revenue in Contract Logistics was $987 million, an increase of 10.4% or 2.8% in constant currency versus prior year. This reflects volume growth, new business wins and the termination of certain contracts and transfer of the Contract Logistics activities in China to the Anji-CEVA JV (as of July 2017). Growth was particularly strong in some of the European clusters, Latin America and South-East Asia.

 

 

Contract Logistics EBITDA increased by $3 million to $38 million. The focused improvement initiatives at key operations are showing good results. EBITDA margin was 3.9%, an increase of 30 basis points in constant currency. 

 

 

The quarter has seen the implementation of major automotive and industrial contracts that will benefit the coming quarters as well as significant wins of e-commerce and consumer/retail contracts, notably in the US, Australia and Brazil. 

 

 

Financial results

 

The first quarter 2018 shows the progress CEVA is making in its transformation with continued good revenue growth, improved EBITDA and cash flows – this is a continuation of the performance in the prior quarters and a good start to the year. The first quarter is seasonally the weakest quarter for CEVA in terms of revenue, profits, margins and cash flows.

 

 

Revenue in the first quarter of 2018 was $1,790 million, up 12.2% versus prior year or 5.4% in constant currency. 

 

 

Adjusted EBITDA was $66 million up $12 million or 22% year on year. Reported EBITDA was $53 million up $8 million year on year.

 

 

EBITDA margin was 3.0% in the first quarter, an improvement of 40 basis points in constant currency. Both Freight Management and Contract Logistics showed better margins. 

 

 

As a result of completing the IPO and concurrent private placement with CMA CMG Group on 8 May 2018, CEVA has significantly strengthened its financial position. 

 

 

Repayment of Debt and Refinancing

 

Following the successful IPO on SIX Swiss Exchange, CEVA has initiated the process of repaying debt with the net proceeds from the IPO. 

 

 

CEVA has recently delivered redemption notices for the 7.0% First Lien Loan Senior Secured Notes due 2021, the 9.0% Senior Secured Notes due 2021 and the 12.75% Senior Notes due 2020 which will be repaid in due course. The company has also repaid a portion of the indebtedness under its term loan and other facilities.  

 

 

CEVA expects Moody’s and S&P Global to update the company’s credit ratings in coming weeks, reflecting the improved financial position. 

 

 

Following such updates, CEVA plans to replace the majority of its remaining debt facilities through a comprehensive refinancing. It is expected that a new financing package will be comprised of term loans, bonds, revolver and/or asset backed facilities in USD and EUR. Subject to prevailing market rates, CEVA expects to lower average interest rate to c.4.5% compared to the current 6.5%. CEVA intends to execute the refinancing plan in the coming months subject to market conditions.

 

 

Outlook

 

 

Management targets to grow revenue above market and to increase EBITDA margins from the 3.3% recorded in 2017 to at least 4.0% in the medium-term. This should translate into an additional $100 million in Adjusted EBITDA.

 

 

For 2018, CEVA expects continued good volume and revenue growth in view of the sales momentum and recent business wins. The further productivity, cost savings and pricing initiatives pursued in Freight Management, Contract Logistics and SG&A are expected to support an increase in EBITDA margin in the year.  Benefits from deleveraging are expected to already partially materialize this year. As such, management continues to believe that it can achieve for 2018, assuming no change in market conditions, double-digit Adjusted EBITDA growth and positive free cash flow (normalized for IPO and refinancing cost).

 

 

Investor call

 

CEVA Logistics will hold an investor call and webcast today at 12.00 CET to present its first quarter 2018 results. 

 

 

To participate, please register under

https://www.kpneventcall.nl/EventRegistration/892b5313-292b-4dd6-bad3-74b98b5a93c7

, where you will get dial-in details and a personal pin code to access the call.

 

 

Documents

 

CEVA Logistics Q1 2018 report and presentation are available under : 

 

 

http://www.ir.cevalogistics.com/websites/ceva/English/3000/results-centre.html

 

 

The recording of the investor call will be available at the above address after the call.

Print

Number of views (2481)

Tags:

Theme picker

Registered Office:

Earlstrees Court, Earlstrees Road, Corby
Northants, NN17 4AX
Main Switchboard: 01536 740100

Company Registration Number: 2629347 
(A Company Limited by Guarantee)
Charity Registration Number: 1004963

© The Chartered Institute of Logistics and Transport