HOOFDDORP, Netherlands, Aug. 3, 2012 /PRNewswire-Asia/ — CEVA Logistics, one of the world’s leading non-asset based supply chain management companies, today reports results for the three months ended 30 June 2012.
- Revenue up 5.5% to EUR 1,808 million in second quarter, led by growth in Ocean freight
- Q2 EBITDA declined to EUR 70 million with improvements in Asia offset by weakness in Southern Europe and Americas
- Solid progress in individual geographies was offset by economic conditions
John Pattullo, CEO, said: “This was a difficult quarter, characterized by flat markets and customer caution, partially offset by our efficiency programs, global footprint and robust business model.
“Transpacific volume and weakness in Southern Europe remain a concern. As a result, we have introduced an even more rigorous approach to cost management to support delivery of our strategic plan.”
Second Quarter ended 30 June 2012
First Half ended 30 June 2012
Revenue for the Group increased 5.5% to EUR 1,808 million in the second quarter (2011: EUR 1,713 million). Freight Management (FM) revenues increased 9%, while Contract Logistics (CL) grew 3%. Progress in FM was largely due to strong growth in our Ocean freight business, particularly out of Asia.
Adjusted EBITDA declined 13.6% to EUR 70 million. There was solid performance in FM, which maintained EBITDA at the same level as the prior year. However, this was offset by declines in CL, where our business was affected by the general economic downturn, most evidently in Southern Europe, as well as certain one-off items, mainly in the prior year quarter, which accounted for approximately one third of the decline. We continue to enjoy strong performance in Asia Pacific CL.
We are taking action to address the decline in profitability with a program addressing both direct and indirect costs and have identified substantial cost reduction opportunities in our FM network and certain underperforming CL contracts. This is over and above recent initiatives like Program UNO, where business processes have been standardized to achieve best-in-class customer service.
Net working capital increased to EUR 9 million in the quarter, primarily due to seasonality. We continue to focus on improving net working capital and in particular reducing overdue receivables. Cash generated from operations during the Second Quarter improved to EUR 22 million (2011: EUR 17 million).
As previously announced, CEVA’s balance sheet was strengthened significantly in the first quarter via a transformational refinancing, eliminating over EUR 500 million of CEVA indebtedness and over EUR 350 million of CEVA Investments Limited securities. On 2 May 2012, CEVA refinanced its synthetic letter of credit facility due 2013 by increasing its existing tranche B term loan due 2016 by US$150 million. As a result of these transactions, CEVA has strengthened its balance sheet and lowered interest costs.
All commentary based on actual results unless stated otherwise.
- Excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.
CEVA – Making business flow
CEVA Logistics, one of the world’s leading, non-asset based supply chain companies, designs and implements industry leading solutions for large and medium-size national and multinational companies. Approximately 51,000 employees are dedicated to delivering effective and robust supply chain solutions across a variety of sectors and CEVA applies its operational expertise to provide best-in-class services across its integrated network, with a presence in over 170 countries. For the year ended 31 December 2011, the Group reported revenues of EUR 6.9 billion. For more information, please visit www.cevalogistics.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT of 1995:
The statements included in this news release, and other statements that are not historical facts, may contain forward-looking statements. In addition to the assumptions specifically mentioned in the above paragraphs, there are a number of other factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, the actual effects of recent and future regulatory changes and technological developments, globalization, levels of spending in major economies, the economic downturn in Asia, Europe and the US, including the economic downturn in the automotive sector, levels of marketing and promotional expenditure, actions of competitors and joint venture partners, employee costs, future exchange and interest rates, changes in tax rates, unexpected costs of future business combinations or dispositions and other factors detailed in risk factors and elsewhere in CEVA most recent Annual Reports. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s annual and quarterly reports, available on the Company’s website. Should one or more of these risks or uncertainties materialize or the consequences of such a development worsen, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. CEVA disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
For more information contact:
CEVA Group Marketing Communications
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