HOOFDDORP, Netherlands, Nov. 30, 2012 /PRNewswire/ -- CEVA Logistics, one of the world's leading non-asset based supply chain management companies, today reports results for the three months ended 30 September 2012.
Summary
Marvin O. Schlanger, CEO, said: "Weak economic conditions continued to weigh on customer sentiment in the Third Quarter. With no real prospect of a significant and sustained market recovery in the short term, we continue to focus our efforts on cost control to maintain our efficiency and on new business development to secure our future revenues and ensure we are ready to take advantage of any improvements in global markets."
"Our Business Development activity has accelerated, resulting in our best quarter for contract wins since 2009. This is an important endorsement from the market of our unique operational capabilities and excellent service and value proposition."
He added: "This was a disappointing quarter in terms of our profit performance. We are addressing the decline in profitability with a comprehensive plan to reduce overhead costs and improve contract performance. We are targeting a net benefit of approximately euro100 million from these actions."
Three quarters ending 30 September 2012
| Key Financials (euro millions) | |||
| 2011 | 2012 | Change | |
| Revenue | 5,154 | 5,364 | 4.1% |
| Adjusted EBITDA (Note 2) | 238 | 206 | (13.4%) |
| Note 1: All references to EBITDA are to Adjusted EBITDA. Note 2: Excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses. |
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In the first nine months revenue for the Group increased 4.1% to euro5,364 million (2011: euro5,154 million). Freight Management (FM) revenues increased 5.0%, while Contract Logistics (CL) grew 3.3%. EBITDA declined 13.4% to euro206 million, mostly driven by weak performance in our CL business.
In the Third Quarter, revenue for the Group increased 5.1% to euro1,844 million (2011: euro1,755 million). FM revenues increased 6.4%, while CL grew 3.3%. Progress in FM was largely due to strong growth in our Oceanfreight business, particularly out of Asia Pacific and the Americas where we saw customers shifting significant volumes from Air to Ocean. Despite this structural shift to Oceanfreight, net revenue margins in Airfreight remained strong.
EBITDA in the Third Quarter declined to euro70 million, primarily as a result of continuing weakness in our CL performance, particularly in Southern Europe, Middle East and Africa (SEMEA). In the FM business, net revenue increases did not fully compensate for upward cost pressure.
Similarly the additional working capital requirements associated with increased Oceanfreight volumes and normal-course seasonality were significant elements of the euro13 million increase in Group working capital from the Second Quarter. Cash generated from operations during the Third Quarter amounted to euro22 million compared to euro40 million last year.
The Group is addressing the decline in profitability with a three-pronged cost reduction plan focused on SG&A costs, FM direct costs and fixing underperforming contracts. The reduction in FM direct costs is in part enabled by our successful execution of Program UNO, which helped to standardize processes across FM operations worldwide. CEVA's strong commitment to operations excellence and customer focus will remain unchanged.
As previously announced, John Pattullo retired as CEO on 12 October, and has been replaced by Marvin O. Schlanger. Pattullo continues to serve on CEVA's Board of Directors.
All commentary based on actual results unless stated otherwise.
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 euro6.9 billion. For more information, please visit www.cevalogistics.com
SAFE HARBOR STATEMENT:
This news release may contain forward-looking statements. These statements include, but are not limited to, discussions regarding industry outlook, the Company's expectations regarding the performance of its business, its liquidity and capital resources, its guidance for 2012 and beyond, and the other non-historical statements. These statements can be identified by the use of words such as "believes" "anticipates," "expects," "intends," "plans," "continues," "estimates," "predicts," "projects," "forecasts," and similar expressions. All forward-looking statements are based on management's current expectations and beliefs only as of the date of this press release and, in addition to the assumptions specifically mentioned in the above paragraphs, there are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including the effect of local and national economic, credit and capital market conditions, a downturn in the industries in which we operate (including the automotive industry and the airfreight business), risks associated with the Company's global operations, fluctuations and increases in fuel prices, the Company's substantial indebtedness, restrictions contained in its debt agreements and risks that it will be unable to compete effectively. 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, which investors are strongly encouraged to review. 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:
Anita Wei
Anita.wei@cevalogistics.com
+86-21-2310-7688
