A fresh shape for CEVA Logistics under Saadé’s helm
The CMA CGM new governance is to accelerate the company’s strategic transformation
CEVA Logistics AG’s Annual General Meeting (AGM) just held approved all resolutions and appointed a new Board of Directors; the company also announced results for the first quarter 2019.
Among the key resolutions was the proposal to renew governance following CMA CGM’s successful completion of its Public Tender Offer to acquire CEVA.
Rodolphe Saadé, Chairman and Chief Executive Officer of CMA CGM, was elected as Chairman of the CEVA Board of Directors, with Rolf Watter acting as Vice-Chairman.
Marvin O. Schlanger, Victor Balli, Rosalind Rivaz and John F. Smith did not stand for re-election; Rolf Watter, Daniel Hurstel and Emanuel R. Pearlman were re-elected for a 1-year term of office until the AGM 2020. Three new Board members were elected: Farid Salem, Michel Sirat and Béatrice de Clermont-Tonnerre. The 3 independent directors are Rolf Watter, Manny Pearlman and Béatrice de Clermont-Tonnerre.
KPMG was elected as independent auditor for the next one year term of office until the AGM 2020.
Nicolas Sartini, who currently is Group Chief Operating Officer and Deputy CEO, was appointed Chief Executive Officer as from June 1st, to replace Xavier Urbain who will become Executive Advisor to Rodolphe Saadé.
In the first quarter of 2019, revenue increased by 1.1% in constant currencies to US$1,698 million.
On a reported basis, the revenue in the first quarter declined by 5.2% year-on-year due to negative translation of foreign currencies such as the BRL, the TRY, the EUR and the AUD into USD.Revenue at Anji-CEVA Joint Venture (owned 50% by CEVA) amounted to US$369 million, an increase of 6.6% compared to same period of 2018; in constant currency, it increased by 13.2%.
The Group’s EBITDA was US$134 million in the first quarter of 2019. On a pre-IFRS 16 basis the Group’s EBITDA represented US$36 million resulting in an EBITDA margin of 2.1%.
EBITDA continues to be negatively impacted by the performance in Contract Logistics in Italy as the contract issues are in the process of being solved on one contract whilst an additional provision of US$10 million was created for the second challenging contract.
In addition, despite stronger yields (Net revenue per tonne), Air Freight has experienced a relatively slow start to the year with weaker volumes than in the same period last year.
Furthermore, the translation effect of some currencies into US$, as mentioned above for revenue, negatively impacted EBITDA by a further US$3 million in the first quarter of 2019.
Pre-IFRS 16 EBITDA at Anji-CEVA Joint Venture for first quarter 2019 was US$22 million. Group Adjusted EBITDA (on a pre-IFRS 16 basis) amounted to US$47 million.
CEVA experienced continued strong momentum with new business wins up 12% in the first quarter of 2019.
Significant new contracts and extensions were won in the first three months: automotive contracts in Benelux, Asia and Americas regions, consumer & retail contracts in North America, IMEA and Asia regions, technology and industrial contracts in North America.
The strategic partnership with CMA CGM is also delivering additional revenues. This cooperation will be further improved with the opening of a CEVA operational center in Marseilles to bring together CEVA’s management teams and support functions, i.e. 200 jobs (creation and transfer).
Therefore CEVA is confirming its medium term targets for 2021: revenue target above US$9 billion, reflecting a 5% average annual organic growth and the contribution of CMA CGM Logistics of US$630 million; upgraded 2021 management expectations on Adjusted EBITDA raised from US$380 million to US$470-490 million pre-IFRS 16 implementation.
Management expectations remain that 2019 will see progress in line with the 2021 objectives, including improvement in EBITDA margin and in free cash flow.