CEVA has reported revenues of $6,646m in 2016, a decline of 4.5% year-on-year, or 1.2% on a constant currency basis.
Revenues fell in both their operating divisions. Freight Management revenue contracted by 5.7% to $3,002m, while Contract Logistics saw a fall of 3.5% to $3,644m. Geographically speaking, Americas revenues fell the most in percentage terms (6.1%) followed by, Asia Pacific (4.1%) and Europe (3.3%).
In Freight Management, CEVA asserted that “volumes increased significantly throughout the year and were ahead of market growth”. Air Freight tonnage improved by 6.7% year-on-year, while the number of TEUs CEVA managed increased by 4.1%. The company stated that it won market share on Asian trade lanes in both modes of transport. In terms of profitability, CEVA remarked that its efforts throughout 2016 on tradelane management, procurement, productivity improvements and automation resulted in a 12.5% increase in EBITDA on a constant currency basis. For the comparable measure that CEVA provided in its financial statements, EBITDA before specific items and SBC, earnings were up by $1m to $65m.
CEVA also highlighted that the rollout of its integrated freight management system, OFS, went smoothly in the US and is now completed globally. It hoped to now realise benefits to productivity and service quality from having a single global system.
As for Contract Logistics, CEVA described the year as one of two halves. In the second half of the year, the division grew by 2.5% in constant currency terms on the back of new business wins and volume growth on existing contracts. In contrast, the first half of the year saw CEVA suffer from weaker performance on certain contracts and start-up issues. The company claims to have “largely addressed these issues”. EBITDA before specific items and SBC was $147m, down by $23m year-on-year, however the division remains considerably more profitable relative to Freight Management.
CEVA’s CEO Xavier Urbain commented: “Overall, 2016 was a year of significant progress in the transformation of CEVA, during which we had some important business wins, successfully addressed legacy issues and we continued to build a much stronger platform. The strong improvement in results, in many of our markets, were overshadowed by weaker performance in some countries, which we continue to address. We enter 2017 in a stronger position and I am confident that we will have a much better performance with our excellence program leading to further cost savings.”