CEVA Group plc, Announces Record Revenue and Strengthening Profit Figures in its Third Quarter Financial Results

CEVA Group plc, Announces Record Revenue and Strengthening Profit Figures in its Third Quarter Financial Results 

• Record revenue of €1.82 billion, an increase of 32% year-on-year
• EBITDA of €86 million -- up 26% from last year

HOOFDDORP, The Netherlands, Nov. 15, 2010 /PRNewswire-Asia/ -- CEVA Logistics, a leading global supply chain management company, has today reported record revenue and robust EBITDA performance in its Quarter Three, 2010 results. 

"I am pleased with the strong performance of the Group in the Third Quarter.  The actions we have taken to recover Freight Management margins and our ongoing focus on Contract Logistics profitability have resulted in a Quarter Three performance which gives us confidence that the Full Year will be in line with our expectations," said John Pattullo, CEO, CEVA.  "These results reflect the hard work of our teams and show strong improvements in all areas of our business."

Three months ended 30 September 2010

Key Financials at actual exchange rates

Key Financials at 2009 constant exchange rates

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.

In the Third Quarter the business reported sequential revenue growth across both Freight Management and Contract Logistics.  Freight Management revenues continued to grow in line with management expectations and have now returned to pre-2008 levels.  Contract Logistics revenue continued to show growth, even with the seasonal holiday period during the Quarter.  In line with CEVA's strategic focus the contract logistics operations in the Consumer sector continued to exhibit good growth with 19% year-on-year improvement.  Against the background of strong revenue increases, CEVA retained relentless focus on working capital.  As a result, the increase in working capital was only €5 million sequentially at €62 million (Q2: €57 million). 

EBITDA of €86 million was achieved in the Quarter, an increase of 26% on the same period last year.  This was very much driven by CEVA's success in reversing the previously reported Freight Management margin impacts and the ongoing focus on Contract Logistics profitability.

CEVA have seen a robust performance across all regions.  The Americas recorded a particularly strong Quarter with revenue and EBITDA showing year-on-year increases of 37% and 20% respectively.  This reflects CEVA's recent focus on improving performance in this region.  The SEMEA region also performed well as a result of the impact of several major new business wins, including a €60 million per annum retail contract with Migros in Turkey, which started to deliver profit in the Quarter.

Revenue in the Third Quarter of 2010 was driven by growth in the Consumer and Retail sectors and continued improvement in the Automotive market.  New contract wins of note include Wales & West Utilities in the UK, Daikin in Spain, Rui Star in South Africa, Honda in Italy and Koctas in Turkey.  

At the end of the Quarter, and in common with other international logistics firms, CEVA announced that the company had entered into a plea agreement with the Antitrust Division of the United States Department of Justice (DOJ) to resolve the DOJ's ongoing investigation into anti-competitive activity in the freight forwarding industry.  Under the terms of the agreement, CEVA accepted a fine of US$4.5 million.  As previously reported, CEVA made provision for this figure in 2009 and the amount is not material.

During the Quarter CEVA have progressed several important transformational projects which will support CEVA's mid and long term development.  "We are pleased with the results of these transformational projects which include upgrading systems and processes within our Freight Management Network and some of our global support functions and leveraging scale in air and ocean procurement.  These programs are key foundations to enable us to drive CEVA forward for future success," concluded Pattullo.

CEVA will communicate the company's Quarter Four and Full Year 2010 Results in March, 2011.

CEVA - Making business flow

CEVA Logistics provides world class supply chain solutions for large and medium-size national and multinational companies across the globe. As an industry leader, CEVA offers customers complete supply chain design and implementation in contract logistics and freight management, alone or in combination. CEVA's integrated global network has facilities in over 170 countries and more than 46,000 employees; all dedicated to delivering consistently excellent operations and supply chain solutions. For the year ending 31 December 2009, the Group reported revenues of €5.5 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
Rebecca Salt
Tel: +44-7795-314010
Email: Rebecca.Salt@cevalogistics.com