CEVA Says Top-Line Growth “Accelerating”

CEVA Holdings has reported its third quarter results, posting an adjusted EBITDA of $75 million, up 19.0% vs. Q2, but flat year-on-year. The company says that top-line growth is accelerating – from both Air and Ocean volumes, and Contract Logistics. Volume growth has driven Freight Management EBITDA up 20.8% year on year. Margin increases have seen Contract Logistics EBITDA growth of 15.2% vs. Q2.

“CEVA’s top line performance continued in Q3. We have experienced good growth in Contract Logistics revenue driven by market share gains. Our Freight Management business line continues to outperform also, with volume growth in Air of 10.6% and Ocean of 4.4% both representing sequential improvements. We have had a number of customer wins in Q3 and our new business pipeline is strong. This demonstrates that our strategy is working and delivering results,” said Xavier Urbain, CEO.

“Our Operational Excellence Program is being implemented successfully and is anticipated to generate benefits that will accelerate in upcoming quarters. I am confident that the actions we continue to implement will drive robust performance in both our revenue and margins in 2017,” he continued.

Group Financial Performance

Revenue was $1,679 million in the third quarter, up 0.9% in constant currency driven by strong volume growth partially offset by declines in rates in Freight Management and good revenue growth in Contract Logistics.

Adjusted EBITDA was $75 million in the third quarter, up 19.0% sequentially and flat versus previous year in constant currency. Market share gains and cost reductions drove this performance.

Headroom as at 30 September 2016 was $524 million, an increase versus the $517 million in the prior year.

Freight Management

In Q3, Air volumes experienced an increase of 10.6% against a soft market. This can be attributed to a mix of new business and an increasing share of wallet with existing customers in numerous sectors and strong development in selected trade lanes. Ocean volumes grew at 4.4% despite an ongoing weak demand in the overall market. While revenue was down 1.4% in constant currency, reflecting unstable rates, EBITDA improved to $27 million, representing a YoY increase of $5 million in constant currency.

Contract Logistics

Robust developments in our Contract Logistics model resulted in good top line growth of 3.0% YoY in constant currency due to new business wins in multiple sectors, with continued successes in Healthcare, Consumer & Retail and Industrial. EBITDA was $38 million, down against previous year but much better than in Q2 with a 15.2% improvement as we continue to drive operational excellence and have made progress on performance issues in a limited number of facilities. Continued sales efforts and closing of facilities allowed a reduction in empty space in warehouses from 6.3% to 4.9%.