CEVA Group Plc Announces 2008 Full Year ResultsBy Prne, Gaea News Network
Wednesday, March 18, 2009
HOOFDDORP, Netherlands - Successful completion of TNT Logistics/EGL integration
- Organic revenue growth of 5.3% exceeds market growth
- Record new business wins of EUR1.7 billion
- “In our first full year as an integrated business, we have performed
well in difficult trading times and believe we have the momentum and
capability to drive the business forward. We intend to achieve this by
focusing on three areas: gaining market share, focused cost containment and
strengthening our core capabilities,” commented CEVA Logistics CEO John
CEVA Logistics, a leading global supply chain management company, today
announced consolidated revenues of EUR6.3 billion for fiscal year 2008 (2007:
EUR4.8 billion) and strong organic growth of 5.3%, exceeding market growth of
2% - 3%(1).
Consolidated Key Financials
EUR millions 2008 2007 Growth
Revenue 6,329 4,785 32.3%
EBITDA before specific items(2) 320 301 6.3%
Pro-forma Key Financials
EUR millions 2008 2007(3) Growth
Revenue 6,329 6,298 0.5%
EBITDA before specific items(2) 320 378 (15.3%)
In CEVA’s first full year of operating as a combined entity following the
merger with EGL in August 2007, it is clear that providing customers with
integrated freight management and contract logistics around the world has
benefited the Group as it announces record new business wins of EUR1.7
billion. The pipeline for potential new business is at its strongest ever as
many companies seek to focus on core competencies by outsourcing supply chain
operations. CEVA’s 2008 rate of converting pipeline opportunities to wins is
also at an all time high.
In 2008, we completed the integration of our business into one operating
unit under the CEVA brand. We now have an integrated business model in all
regions with combined regional teams driving both contract logistics and
freight management businesses. This has enabled us to reduce regional
overheads and to offer a truly integrated proposition to our customers.
Evidencing the success of our business strategy, our cross selling of
services in 2008 increased to a new high of EUR230 million.
CEVA has not been immune to the economic slow down. In Q4 2008 we saw a
reversal in recent revenue and profit growth trends. The main contributory
factors were customer volumes reducing particularly in airfreight and the
inbound automotive sector. This resulted in revenue of EUR1,567 million
(2007: EUR1,680 million) and EBITDA of EUR57 million (2007: EUR100 million)
for the quarter.
EUR millions Q4 2008 Q4 2007 Growth
Revenue 1,567 1,680 (6.7%)
EBITDA before specific items(2) 57 100 (43%)
The Group’s senior management are working hard to offset the ongoing
impact of the world’s turbulent economy with a number of cost containment
programs. In addition to the cost saving programs, such as LEAN and
Procurement that were implemented in 2008, management has recently launched
new cost saving programs, which are expected to deliver in excess of an
incremental EUR100 million of reduced costs in 2009.
The business has no material debt repayments due until November 2012.
Cash generated from operations amounted to EUR300 million in 2008, which was
more than sufficient to meet interest and tax requirements but before
specific items. Total committed headroom at the year end stood at EUR217
million. Throughout 2009 CEVA will continue working to add new liquidity
facilities and further reduce working capital.
The business continues to focus on building its capabilities in order to
deliver greater value for customers. This has included ongoing development of
the Company’s Operations Excellence program which includes: applying bespoke
LEAN methodologies to realize efficiency through waste reduction, Zero Defect
Start-ups, a rigorous project management methodology and Smart Solutions -
products developed on the basis of experience gathered from around the world.
The outlook for the first quarter of 2009 continues to follow the same
trends as seen in Q4 2008. Over the first two months of 2009, CEVA has
continued to see relatively weak overall transaction volumes and reduced
freight flows, broadly consistent with the prior quarter (especially in
automotive-related sectors), and we expect more of the same for the remainder
of Q1. Based on these current trends, CEVA currently expects Q1 2009 revenues
in the range of EUR1.3 billion to EUR1.4 billion and EBITDA before specific
items of EUR27 million to EUR37 million. CEVA also expects to have total debt
net of cash of between EUR2.6 billion to EUR2.7 billion at the end of Q1 2009
(31 December 2008: EUR2.5 billion). Of this increase, EUR110 million is
anticipated due to the strengthening of the US dollar.
In conclusion, the first full year as an integrated business has shown
overall good performance in difficult trading times. CEVA stands committed to
meeting current challenges and believes it is well positioned for continued
(1) Based on market information; IATA, Drewry, Merge Global, annual
reports, press releases and company estimates etc.
(2) EBITDA excludes the impact of specific items which are significant
non-recurring items such as restructuring and integration costs,
rebranding, costs and certain legal expenses.
(3) The 2007 financials are shown as if the acquisition of our freight
management business had occurred on 1 January 2007 instead of the
actual acquisition date of 2 August 2007.
Source: CEVA Logistics
For more information: CEVA Group Marketing & Communications, Rebecca Salt, +44(0)7795-314010
Tags: Hoofddorp, Netherlands