CEVA Holdings LLC - Results for the Full Year ended 31 December 2017

• Revenue of $7 billion for Full Year 2017, up 5.4% in constant currency
• Adjusted EBITDA of $280 million for Full Year, up $31 million in constant currency
• Good fourth quarter with strong growth and improved profits
• Excellence Program rigorously executed and more than $120 million annualized cost savings delivered
• Full Year operating cash flow of $209 million, up $66 million vs. previous year
• Robust liquidity position with headroom of $578 million at year end

Hoofddorp, the Netherlands, 23 February, 2018 – 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 full year and fourth quarter of the year ended 31 December, 2017.
 

 ^{(a)  Adjusted EBITDA includes the proportional contribution of the ANJI-CEVA joint venture and excludes specific items and share-based compensation cost}

“I am pleased to report a strong finish to a good year” says Xavier Urbain, CEO of CEVA. “Our Excellence Program has delivered important cost savings and has supported much better profits despite market headwinds. At the same time, revenue growth across Contract Logistics and Freight Management has been very good. With stronger revenue, profits and cash flow, we have delivered on all our objectives.”

“CEVA's competitive position has much improved as evidenced by the important business wins we have had in recent months. Through the transformation we have initiated in 2014, CEVA is a much stronger company now. However, we still have ample opportunities to improve margins and deliver even better service to our clients – this is what we are working on.”

“I am confident that we can keep the momentum and can continue to improve our results going forward”.
 

Freight Management

In Q4, the peak season once again was challenging with tight capacity in airfreight, notably on the China-US routes.  Air freight volumes in 2017 were up 11.6% year on year with particularly strong Q4 performance on transpacific trade lanes. CEVA also maintained solid yields with yields up 8.5% versus prior year in Q4 due to pricing and procurement measures.

Ocean freight also had a good Q4 with volumes up 6.9% year on year. 

The Excellence Program has resulted in important process and cost improvements; productivity was up 12.9% in ocean freight. Additional process automation is expected to drive further productivity improvements.

Overall, freight management revenue was $3.3 billion in 2017, up 8.6% in constant currency, whilst net revenue was $875 million, stable versus last year. Cost savings allowed us to offset the temporary net revenue margin pressure from rate increases. As such, EBITDA was $76 million, up $13 million in constant currency.
 

Contract Logistics

Revenue growth was 2.8% in constant currency and accelerated vs prior years. Contract Logistics had a number of important business wins in recent months which, once implemented, are expected to support the growth in 2018. We experienced strong customer traction in a number of verticals, notably consumer & retail including e-commerce, industrials and automotive.

EBITDA for the full year stood at $154 million, up $9 million in constant currency. Normalised for property disposals in 2016, the underlying improvement is $25 million which reflects the focus on productivity improvement in key contracts through the Excellence Program.

Financial results

Revenue in Q4 was $1,895 million, up 5.7% in constant currency vs prior year, the fifth consecutive quarter of strong growth. Full year revenue was $6,994 million, up 5.4% in constant currency.

Adjusted EBITDA was $71 million in Q4 and $280 million for the full year, up $31 million in constant currency. The underlying profitability improvement was even stronger but partially offset by the temporary margin pressure from market conditions in freight management and the increase in variable compensation related to the good performance in the year. 

Operating cash flow in 2017 was $209 million, up $66 million from the prior year, reflecting better profits and working capital inflows from stronger focus and ongoing initiatives.

Headroom from cash and cash equivalents and committed facilities as of 31 December 2017 was $578 million. 

For more information, please contact:

David Urbach
SVP Corporate Development
david.urbach@cevalogistics.com
+41 799 333 083

Pilot Marketing
Derek Jones dj@pilotmarketing.co.uk
Cathy Howe ch@pilotmarketing.co.uk
London, UK
+44 20 8941 5381

CEVA - Making business flow
CEVA Logistics, one of the world’s leading non-asset based supply-chain management companies, designs and implements industry leading solutions for large and medium-size national and multinational companies. Approximately 42,000 employees in more than 160 countries are dedicated to delivering effective and robust supply-chain solutions across a variety of sectors where CEVA applies its operational expertise to provide best-in-class services across its integrated network. 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 or joint ventures, its liquidity and capital resources, its guidance for 2018 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 Air freight 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.