CEVA Group plc Results for the Third Quarter, ended 30 September 2011

Hoofddorp, The Netherlands, 8 November 2011 – CEVA Logistics, one of the world’s leading non-asset based supply chain management companies, has today reported its Third Quarter, 2011 results.

  • Revenue of €1.76 billion and EBITDA of €86 million, up year-on-year by 1.2% and 5.8% respectively, at constant exchange rates, reflecting continuing good performance in Contract Logistics, partly offset by lower rates and volumes in Freight Management
  • Year to date EBITDA increased to €238 million, up year-on-year by 17.2% and 21.9% at actual and constant exchange rates respectively
  • Continued focus on cash management drives year-on-year reduction in net working capital by €34 million.

Three months ended 30 September 2011
Key Financials at actual exchange rates

Q3 2011 Q3 2010 Change
Revenue (€ million) 1,755 1,815 (3.3%)
EBITDA before specific items1 (€ millions) 86 86 0%

Key Financials at 2010 constant exchange rates

Q3 2011 Q3 2010 Change
Revenue (€ millions) 1,840 1,815 1.2%
EBITDA before specific items1 (€ millions) 91 86 5.8%

Nine months ended 30 September 2011
Key Financials at actual exchange rates

YTD Q3 2011 YTD Q3 2010 Change
Revenue (€ millions) 5,154 5,047 2.1%
EBITDA before specific items1 (€ millions) 238 203 17.2%

1EBITDA excludes the impact of specific items which are significant non-recurring items such as restructuring and integration costs, rebranding costs and certain legal expenses.

 

“The actions we have taken over the past 18 months to reduce costs and improve our operational efficiency have resulted in better margins and increased EBITDA in markets that have become tougher in recent months,” comments John Pattullo, CEO, CEVA Logistics. “I am pleased that our business model is proving resilient.”

In the Third Quarter revenue was €1.76 billion (Q3 2010: €1.82 billion).  At constant exchange rates revenue increased 1.2%, benefiting from continued good progress in Contract Logistics (CL), which grew revenue 2.5% year-on-year.  In Freight Management our air business has been impacted by declines in market volume, particularly in Transpacific airfreight lanes.

In contrast, our Ocean business, which is one of our areas of strategic focus, continues to grow.  We continue to see volume increases year on year, strengthening our global market position. In Quarter Three, this has been supported by the expansion of our Less-than-Container-Load (LCL) offering, with the addition of the Hamburg to New York service, which is the first of many new LCL solutions scheduled to launch in Q4 2011.  This marks a considerable strengthening of our Ocean organization and will be followed by further enhancements.

Our EBITDA margin increased year-on-year from 4.7% to 4.9%.  This was driven particularly by improvements in leveraging our Freight Management network and in improving CL contracts.

The Group continues to focus on strong cash management and control of net working capital.  As a result net working capital at the end of the Third Quarter decreased to €(48) million, a €34 million improvement, year-on-year.

In the Third Quarter new business wins totaled €391 million (Q3 2010: €368 million).  Strongest growth performances were achieved in Freight Management and the Automotive and Energy sectors.

Our comprehensive program of business improvement initiatives continues to underpin our progress.  These initiatives include:

  • Program UNO – standardizing business processes across our Freight Management operations
  • Finance – outsourcing back office finance operations and transforming finance processes
  • Leveraging FM network – centralizing procurement, capacity management and control of key operations.

Currently floods are disrupting lives and businesses in Thailand and have impacted many of our technology and automotive customers.  We are assisting customers move inventory and utilizing our global networks to re-engineer the supply chain to minimize risk.  Today, we have over 120 people from across CEVA working to help our customers during this difficult time.  The full extent of the impact will only be known when flood waters abate.

With external markets remaining volatile, we expect the uncertainty of the last few months to continue.  Against this background we believe that we have identified and prioritized the right actions to continue to strengthen our business model.

For more information contact:

CEVA Group Marketing & Communications
Rebecca Salt
+44 7795 314010
Rebecca.Salt@cevalogistics.com

Follow CEVA on Twitter: @cevalogistics