CEVA makes further progress in second quarter 2018 [Forwarder]
CEVA Logistics AG
Results for the Second Quarter and Half Year ended 30 June 2018
- Revenue up 5.1% year on year in constant currency
- Adjusted EBITDA of $77 million, up $7 million year on year
- EBITDA margin improved by 30bps in constant currency, driven by Freight Management
- Good business momentum following IPO
- Developing partnership with CMA CGM following regulatory approvals
- Refinancing underway, expected to be completed early August
Baar, Switzerland, 27 July, 2018 - CEVA Logistics AG ("CEVA" or the "Company"), one of the leading asset-light third-party logistics companies, announced today its results for the second quarter and the first half ended 30 June 2018.
Key Financials for Q2
($ million) Q2 2018 Q2 2017 Change YoY Change YoY constant FX
Revenue 1,848 1,721 +7.3% +5.1%
EBITDA (a) 66 59 +11.9% +13.5%
EBITDA margin 3.6% 3.4% +20 bps +30 bps
Adjusted EBITDA (b) 77 70 +10.0% +11.6%
Key Financials for H1
($ million) H1 2018 H1 2017 Change YoY Change YoY constant FX
Revenue 3,638 3,317 +9.7% +5.2%
EBITDA (a) 119 104 +14.4% +15.5%
EBITDA margin 3.3% 3.1% +20 bps +30 bps
Adjusted EBITDA (b) 143 124 +15.3% +15.3%
(a) EBITDA excludes specific items and share-based compensation cost
(b) Adjusted EBITDA includes the proportional contribution of the ANJI-CEVA joint venture and excludes specific items and share-based compensation cost
"CEVA continues to perform well. We now have achieved seven consecutive quarters of strong top-line growth and stronger EBITDA" said Xavier Urbain, CEO of CEVA Logistics. "We continue to reduce our cost base, work on productivity and address our underperforming activities. In the first half of the year, margin growth has been skewed towards Freight Management, we expect Contract Logistics to make more progress in the second half of the year as we have largely addressed the issues. We are committed to further improving our margins and are moving in the right direction."
"Whilst still early days, initial benefits from the deleveraging through the IPO are already materializing. We have increased business with some existing clients and are engaged in a number of promising discussions. In general, we have good momentum in business development. We are also making progress in developing our partnership with our new strategic shareholder CMA CGM."
"Looking ahead, we are confident in further improving our performance this year and in meeting our medium-term targets."
Revenue in Freight Management increased by 8.1% in the second quarter 2018, year on year; in constant currency, revenue growth was 5.4%.
CEVA had good volume growth in Ocean, up 8.3% in the second quarter and ahead of market growth. Air volumes were softer, as in Q1, mainly from the earlier loss of certain customers. However, the implementation of important new contracts which were won during the spring tender season will drive volume growth going forward.
Freight Management EBITDA increased by $7 million year on year to $27 million driven by improved yields in Air, increased productivity and progress in reducing losses in other FM activities. Profits were adversely impacted by increased cost in our US Ground business due to driver shortages, the impact of which is expected to reduce in coming quarters as we take mitigating actions. EBITDA margin improved by 70 bps to 3.2%.
For the first half year 2018, revenue in Freight Management increased by 7.0% year on year in constant currency and EBITDA was $42 million, up $12 million year on year.
Revenue in Contract Logistics increased by 6.8% in the second quarter 2018 year on year; in constant currency, revenue increased by 4.7%.
The acceleration of revenue growth was driven by good volumes in existing contracts as well as the implementation of new business won previously; we had important contract start-ups in consumer/retail, automotive spare parts, technology and e-commerce.
Contract Logistics EBITDA was stable at $39 million. Improvements in productivity at many of the large, focus contracts were offset by issues in a limited number of operations in Italy and in the US. The issues have now been largely addressed and are expected to have a reduced impact over the second half of 2018. Our low margin contract initiative is also gaining traction. As such, we anticipate margins to trend upwards in the second half of 2018.
For the first half year 2018, revenue in Contract Logistics increased by 3.8% year on year in constant currency and EBITDA was $77 million, up $4 million year on year in constant currency. EBITDA margin improved by 10 bps year on year in constant currency.
Good Business Momentum
We continue to see good momentum in business development. CEVA has won more business across all business lines the first six months of 2018 compared to the same period in the prior year with total new business wins approximately 10% higher. We have won or extended a number of important contracts in automotive, industrials, technology, consumer and e-commerce.
The IPO is already showing a positive impact on business development, and the tone of conversation with many of our existing and prospective clients has shifted markedly. We have already secured the first wins and contract renewals which would not have happened without the IPO.
The second quarter of 2018 shows the progress CEVA is making in its transformation with continued good revenue growth and improved EBITDA.
Revenue in the second quarter 2018 was $1,848 million, up 7.3% year on year or 5.1% in constant currency. For the first six months of 2018, revenue was up 5.2% year on year in constant currency. Increased volume in existing contracts as well as new business implementations accounted for the growth despite certain contract losses. Revenue grew well across most sectors, particularly in industrials and healthcare but also in consumer/retail/
e-commerce and automotive.
Adjusted EBITDA in the second quarter 2018 was $77 million, up $7 million year on year. EBITDA margin was 3.6% in the second quarter 2018, an improvement of 30 basis points in constant currency. For the first six months of 2018, Adjusted EBITDA was $143 million up $19 million or 15% year on year.
CMA CGM partnership
CMA CGM has obtained all regulatory approvals for its investment in CEVA. We expect that the CMA CGM securities will be converted into registered shares by no later than 13 August 2018.
Both companies have worked closely together over the past weeks to exploit partnership opportunities in a number of areas, particularly to offer integrated end-to-end solutions and expand geographic coverage. The first contracts have been concluded, where CEVA was introduced to clients from CMA CGM, and further discussions are ongoing.
While CEVA will seek to exploit the opportunities from this partnership, all dealings with CMA CGM will be structured at arm's length and CEVA will continue to work closely with all its ocean carriers in the interest of its clients.
Repayment of Debt and Refinancing
CEVA has used a substantial part of the proceeds from the IPO on SIX Swiss Exchange and the concurrent private placement to CMA CGM in May to repay debt. As a consequence, net debt as of 30 June 2018 was reduced to $1,132 million compared to $2,228 million as of 31 March 2018.
The Company is currently in the process of raising new facilities to refinance the majority of our existing debt at lower interest rates and longer maturities. We have successfully placed a new $475 million Term Loan (TLB; at L+375bps with leverage step-down to L+350bps) and a new $585 million Revolving Credit and Ancillary Facility (at L+237.5bps). We have upsized the TLB in view of strong demand to provide the Company with even more headroom. CEVA has also announced a private offering of EUR300 million of senior secured notes. The refinancing is expected to complete early August, subject to market conditions.
Following the deleveraging from the IPO proceeds and refinancing, CEVA expects to reduce its finance charges by more than $100 million annually, subject to prevailing interest rates and currency drawings.
The Company is committed to further deleveraging with a target of 1.5x-2.0x net debt/adjusted EBITDA in the medium-term.
CEVA is expecting good growth and continued margin progression in the second half of 2018; management is confident to meet expectations, subject to no changes in market conditions.
Medium-term, CEVA is confirming its targets to grow revenue above market and to increase EBITDA margins from the 3.3% achieved in 2017 to at least 4%; this should result in an additional approximately $100 million in Adjusted EBITDA.
Posted at 08:13 パーマリンク
DHL strengthens its position in automotive logistics [Integrator]
DHL Freight has been awarded an extension of its contract with the BMW Group and will continue to manage the vehicle manufacturer's overland transport in 17 countries covered by the companies' previous contract.
DHL Freight wins contract with the BMW Group
Successful renewal of existing business and expansion of collaboration
Custom-tailored Connected Supply Chain solution to monitor and optimize flow of goods
Bonn - DHL Freight has been awarded an extension of its contract with the BMW Group and will continue to manage the vehicle manufacturer's overland transport in 17 countries covered by the companies' previous contract. As a result of the tender, DHL Freight also won an expansion of the collaboration, taking on supply chain management of the BMW Group in seven additional areas. A new DHL Freight custom-made logistics solution was successfully implemented as part of the contract conclusion.
"This achievement represents another step towards Freight 2020, our strategy to become the provider of choice in overland transport by offering the best quality and reliability for the customers who depend on us," declares Uwe Brinks, DHL Freight. "With BMW, we set out to create a solution specifically designed for their needs, one that would provide complete transparency throughout the supply chain, allowing the customer a consolidated overview of extremely complex processes. We have achieved this with Connected Supply Chain, a solution that gives BMW and their partners at DHL Freight the ability to manage potential issues and identify opportunities for further optimization."
Connected Supply Chain (CSC) depicts the entire supply chain digitally, delivering real-time, end-to-end visibility and management control to all relevant stakeholders. Aspects such as order and status data are visible via a central portal, and orders receive a single reference number from beginning to end. Drivers can access the system via a mobile application designed specifically for them. DHL Freight's solution was developed together with AXIT, a specialist for in cloud-based IT solutions for managing cross-enterprise logistics processes, in order to feed CSC with the relevant information.
The transparency and control afforded by CSC give BMW a real-time overview of developments. They can identify potential risks or emergency situations immediately and rapidly counteract them with the support of DHL Freight. As part of the solution, DHL Freight has established a Control Tower, where all streams of goods in Europe are monitored, providing a unique opportunity to consolidate complex data and identify areas where operations may be optimized. BMW can thereby identify potential for savings and monitor the performance of suppliers and carriers in real-time.
DHL Freight's new contract with the BMW Group covers the management of about 90,000 shipments per month within a simultaneously dependable and highly flexible network. Temperature-controlled shipping and dedicated transports are available in all areas covered by the contract.
Posted at 21:32 パーマリンク
Panalpina opens new logistics center in Singapore [Forwarder]
Panalpina, the Swiss freight forwarding and logistics company, has opened a new, purpose-built logistics center in Singapore. Strategically located at Pioneer View, the new facility is constructed over six floors and offers 25,800 m2 of usable warehouse space, which is equivalent to 3.5 FIFA-standard football pitches.
Speaking at the official opening of the facility, Panalpina CEO Stefan Karlen said: “Singapore is a very important consolidation hub for ocean and air freight. The nation-state is investing in the expansion of its ports, and a fifth runway is under construction at Changi Airport.” Karlen also stressed that 96 of Panalpina’s top 100 global customers have a base in Singapore.
“Against this backdrop, Panalpina plans to offer Air and Ocean Freight services including value-added logistics services to companies, particularly in the energy, healthcare, high tech, manufacturing, consumer and retail, as well as fashion industries.”
The majority of the space of the multi-purpose facility is already rented out to customers, and Karlen was keen to underline the importance of technologies to the Singapore facility, as well as to the company as a whole.
Panalpina plans to test and use many new technologies in Singapore, including the Internet of Things (IoT), augmented reality, and various automation systems. The new facility could also run 3D printers on behalf of customers, meaning it could one day become a hub for distributed manufacturing.
Karlen, who himself was once based in Singapore, took the time to meet and chat with Panalpina’s front-line staff, as well as with attending dignitaries, including His Excellency, Mr Fabrice Filliez, Swiss Ambassador to Singapore.
Posted at 22:20 パーマリンク
Kuehne + Nagel strengthens pharma logistics offering in Chile with new Logistics Hub [Forwarder]
Expanding KN PharmaChain network with strong local footprint
Fully integrated laboratory and distribution centre
Eco-friendly through use of geothermal energy
As of August 2018, a new Logistics Hub in Santiago de Chile will benefit the growing pharma & healthcare industry in South America with a dedicated warehousing solution. This provides Kuehne + Nagel’s global KN PharmaChain network, the multi-modal logistics solution for temperature-controlled door-to-door transportation, with an enhanced regional footprint. The new facility further underlines Kuehne + Nagel’s continuous commitment to expand its GXP compliant warehousing and forwarding services worldwide.
While eco-friendly built and equipped, the Logistics Hub complies with the highest security standards and state-of-the-art technology to increase current operational capacities. The facility will provide an area of 17,600 sqm for storage and distribution of temperature-sensitive products, which can be extended to 23,300 sqm, including a cold chamber to handle temperature requirements of 15 to 25°C and 2 to 8°C. A renewed laboratory for quality control allows customers to comply with the regulatory requirement to carry out local analysis of imported pharmaceutical products. Additionally, GMP compliant repackaging and relabelling areas following Chilean and international specifications will be available as value added services.
The Logistics Hub will use clean energy via a geothermal system to keep the temperature of its general area between 15 to 25°C. By occupying the air that circulates through the subfloor a significant reduction of energy consumption will be achieved.
“With more than 40 years demonstrating commitment to the Chilean market, this cutting-edge facility will leverage the knowledge and experience of our specialised teams and enable Kuehne + Nagel to offer its unique pharma solutions to an extended customer base. This investment is in line with our strategic ongoing commitment to the pharma & healthcare industry globally strengthening our position as a leading player in pharma logistics”, said Ingo Goldhammer, President of Kuehne + Nagel South & Central America.
Posted at 22:15 パーマリンク
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