- Q3 Revenue of $1.7 bn, like-for-like down 2.4% in constant currency
- Q3 EBITDA up 27% year-over-year, up 38% like-for-like in constant currency
- Freight Management: Net revenue improvement for Air up 6% year-over-year driven by rates, Ocean delivered sustainable net revenue resulting in EBITDA growth of 125% in constant currency
- Contract Logistics: Best practices and benchmarking drive productivity efficiencies, moving EBITDA margin to 6.2% from 5.0% like-for-like, year-over-year. Q3 EBITDA up 6% year-over-year, 18% in constant currency
- Business pipeline resulted in major wins in Q3
Hoofddorp, the Netherlands, 10 November, 2015 – CEVA Holdings LLC (“CEVA” or the “Company”), one of the world’s leading non‐asset based supply chain management companies, today reported results for the three months ended 30 September 2015.
| Key Financials ($ millions) | Quarter | |||
| Q3 2015 | Q3 2014 | % Change | % Change Constant FX | |
| Revenue(a) | 1,699 | 1,954 | (13.1) | (2.4) |
| Adjusted EBITDA(a)(b) | 80 | 63 | 27.0 | 38.1 |
a) Reported revenue and Adjusted EBITDA for Q3 2014 amounts to $1,992 million and $64 million respectively. Q3 2014 Key Financials excludes the impact of disposals representing $38 million of revenue and $1 million of EBITDA in Q3 2014, which closed in Q2 2015.
b) Adjusted EBITDA includes the proportional contribution of the Anji-CEVA joint-venture and excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.
“CEVA’s new operating model continues to pay off,” said Xavier Urbain, CEO of CEVA. Despite overall industry headwinds, our performance in the Third Quarter was robust and we continue to defend our position in a generally soft market. Our focus on process and product improvement for all business lines has allowed us to increase profitability in spite of difficult industry volume evolution. Our Air & Ocean business lines now have the right organizational structures in place allowing them to take advantage of a better aligned procurement approach. Additionally, our focus on quality trade lanes and those where we have a strong presence allowed us to gain share on key routes. CEVA was also able to create opportunities with major customers across all of our customer segments: small medium-sized enterprises, multinational companies and global key accounts.
Freight Management continued to deliver strong EBITDA performance in the Third Quarter, up 125% year-over-year in constant currency. Global demand for freight transportation has declined due to headwinds from the Air and Ocean freight market. Consequently, Air freight volumes declined 4% year-over-year and Ocean freight volumes declined 5.7% year-on-year.
Despite volume declines, year-over-year net revenue for Air increased by 6% as a result of an improved procurement setup in a declining rate environment and Ocean delivered sustainable net revenue. CEVA’s focus on specific trade lanes and those where we have a strong presence, such as selected Trans-Pacific and Asia-Europe routes, allowed us to gain share. Air and Ocean productivity gains were achieved through CEVA’s focus on system enhancements, process improvements as well as cost control. Freight Management’s business pipeline increased 13% percent over the previous year, and its hit rate increased to 30% compared to 28% in the previous quarter. CEVA recently contracted two multi-year deals with major customers to offer Global 4PL Control Tower and Lead Logistics Provider solutions with an overall annual business value of some $80 million.
Contract Logistics maintained industry-leading Adjusted EBITDA margins of 6.2% in the Third Quarter, up from 5.5% in the previous quarter, driven by effective space management and improved productivity. Contract Logistics revenue is flat like-for-like, year-over-year in constant currency.
The Contract Logistics business pipeline advanced 5% year-over-year, with a hit rate that increased sequentially to 25% from 21% over the previous quarter. This progress was backed by significant wins in the Consumer & Retail and Healthcare sectors. In the UK we signed four, ten-year warehousing and transport contracts for leading fashion retailers Coast, Karen Millen, Oasis and Warehouse which amount to over $40 million annually.
CEVA’s overall business pipeline continued to be strong in the Third Quarter, with a 9% increase over the previous year. CEVA continues to proactively invest in its field sales team, which has grown by some 20% compared to the same period last year, with a solid focus on increasing sales to small and medium-sized enterprises as well as multinational companies.
