- EBITDA of $80 million matches 2012 results reflecting traction in marketplace
- Contract Logistics earnings increase significantly
- Cost reduction program continues to positively impact results
- Working capital at best-ever third quarter level.
CEVA Holdings LLC, one of the world’s leading non‐asset based supply chain management companies, today reported results for the three months ended 30 September 2013. The quarter showed a continued recovery of CEVA’s business, with Q3 EBITDA nearly matching adjusted EBITDA for Q3 2012. The company also reported a significant improvement in net working capital, and its strongest Contract Logistics performance in more than two years.
|Key Financials ($ millions)
|Three months ended
30 September 2013
1Excludes the impact of specific items that are significant non-recurring items such as restructuring and certain legal expenses.
²Adjusted for disposals of business
“CEVA’s business is improving and I’m pleased to report we made sound progress in in the recent quarter,” said CEVA CEO Marvin O. Schlanger. “While the overall market remains sluggish, our actions over the previous months have strengthened the company’s financial position resulting in real traction in the market and a strong cash position. A significantly stronger CEVA further improves our ability to serve the needs of customers.
“Our Contract Logistics business has recovered well. Oceanfreight volumes are stable, but we recognize that our Airfreight volumes are not where we want them to be. We are working to address this and strengthen the freight business in the coming quarters. We added resources to both our Freight Management and Business Development teams. This will catalyze new growth for our freight network. The positive impact of these changes are evidenced by recent customer wins.”
Revenue for the three months ended 30 September 2013 was $2,103 million, decreasing from $2,278 million from the corresponding period in 2012, driven primarily by lower Airfreight volumes. Revenue in Freight Management declined by 13.3% against the same period in 2012 due to market conditions and decisions CEVA made regarding unprofitable contracts. Contract Logistics revenues of $1,159 million were steady in the quarter against $1,189 million in Q3 2012, with organic growth and new wins offsetting terminated contracts.
Adjusted EBITDA for the period was $80 million led by Contract Logistics, which increased 52% from the previous year, driven by a number of factors including improvement in the Americas; Freight Management declined 59% in comparison to Q3 2012, driven by weaker Airfreight volumes.
During the third quarter, CEVA continued investing in new businesses and announced new wins. These include an expanded relationship with Ford; a new three year deal with Michelin; an expanded contract with Avon; the addition of Rolls-Royce and Pigeon as part of a new green logistics center opened in Singapore; creation of a technology campus in Nashville, TN; a new healthcare hub in Miami; and the opening of the company’s second Center for Logistics Excellence, serving Asia Pacific.
As previously announced, Marvin O. Schlanger will retire as CEO effective 2 January, 2014, resuming his position as non-Executive Chairman of the Board. He will be succeeded by Xavier Urbain, who brings to CEVA a long and outstanding career in the supply chain industry, including serving on the Management Board and Board of Directors and in several senior executive positions at Kuehne + Nagel and as CEO of ACR Logistics.