CEVA has reported its results for the three months ended 30 September 2015 with a 13.1 per cent decline in revenue (down 2.4 per cent at constant foreign exchange) to US$1.7 billion for an adjusted EBITDA of $80 million, up 27 per cent.
“CEVA’s new operating model continues to pay off,” said Xavier Urbain, CEO of CEVA. “Despite overall industry headwinds, our performance in the Third Quarter was robust and we continue to defend our position in a generally soft market. Our focus on process and product improvement for all business lines has allowed us to increase profitability in spite of difficult industry volume evolution.”
Freight Management continued to deliver strong EBITDA performance in Q3, up 125 per cent year-on-year in constant currency. Global demand for freight transportation has declined due to headwinds from the air and ocean freight market, CEVA said. Consequently, air freight volumes declined 4.0 per cent year-on-year and ocean freight volumes declined 5.7 per cent year-on-year.
Despite volume declines, year-on-year net revenue for air increased by per cent as a result of an improved procurement setup in a declining rate environment and ocean delivered sustainable net revenue.
“CEVA’s focus on specific trade lanes and those where we have a strong presence, such as selected Trans-Pacific and Asia-Europe routes, allowed us to gain share,” the group said. Freight management’s business pipeline increased 13 per cent over the previous year, and its hit rate increased to 30 per cent compared to 28 per cent in the previous quarter, it said. CEVA recently contracted two multi-year deals with major customers to offer Global 4PL Control Tower and Lead Logistics Provider solutions with an overall annual business value of some $80 million.
The group’s contract logistics division maintained industry-leading adjusted EBITDA margins of 6.2 per cent in Q3, up from 5.5 per cent in the previous quarter, driven by effective space management and improved productivity, CEVA said. Contract logistics revenue is flat like-for-like, year-on-year in constant currency.
The Contract logistics business pipeline advanced 5.0 per cent year-on -year, with a hit rate that increased sequentially to 25 from 21 per cent over the previous quarter. This progress was backed by significant wins in the consumer & retail and healthcare sectors. In the UK CEVA signed four, ten-year warehousing and transport contracts for leading fashion retailers Coast, Karen Millen, Oasis and Warehouse which amount to over $40 million annually.
CEVA’s overall business pipeline continued to be strong in Q3 with a 9.0 per cent increase over the previous year. CEVA continues to proactively invest in its field sales team, which has grown by some 20 per cent compared to the same period last year, with a solid focus on increasing sales to small and medium-sized enterprises as well as multinational companies.
