CEVA Group plc Announce Results for the Full Year to 31 December 2011

Hoofddorp, The Netherlands, 6 March 2012 – CEVA Logistics, one of the world’s leading non-asset based supply chain management companies, has reported record revenues and strong EBITDA growth for the year ended 31 December 2011. This robust performance was underpinned by the company’s continuing drive to increase operational efficiency, add incremental business with key customers in target sectors and reduce costs.In early 2012, the group completed a transformational equity and debt funded financing, which eliminated over €850 million of debt, strengthened the balance sheet, and positioned CEVA well for future growth.

Highlights of the year

• Record revenue of €6.9 billion
• Strong EBITDA growth of 10% (13% at constant exchange rates)
• Over €850 million of debt eliminated, other debt maturities extended and interest reduced
• New wins of €1.8 billion exceeding our target.

Commenting on the results, John Pattullo, CEO said: “2011 was a year of strong progress for CEVA.  We improved our financial performance substantially in the first half year and have maintained top line performance in a more challenging economic environment in the second half.  This was helped by the structural improvements we made through the year, our continued focus on cost and ongoing improvements in our operations.  Our recent transformational financing has strengthened our balance sheet and positions us well for profitable growth in the future.”

Year ended 31 December 2011

Key Financials (€ millions)		Actual Exchange Rates		Constant Exchange Rates
	2010	2011	Change	2011	Change
Revenue	6,847	6,895	0.7%	7,047	2.9%
EBITDA before specific items1	292	321	9.9%	330	13.0%

¹EBITDA excludes the impact of specific items which are significant non-recurring items such as restructuring and certain legal expenses.

In the Full Year we increased revenue by 1% to €6,895 million.  At constant exchange rates, revenue increased by 3%, driven by an 8% increase in our Contract Logistics business and a 2% decrease in our Freight Management business. The slower Freight Management revenue performance was partly due to a decline in transportation rates (resulting in lower revenue charged to customers), along with softer airfreight volumes.

EBITDA before specific items increased by 10% to €321 million in 2011.  We estimate the flooding in Thailand had a net impact of approximately €7 million.  At constant exchange rates, there was 13% EBITDA growth (15% excluding the flood), driven by Contract Logistics volumes and strong margin improvement in Freight Management, partly due to our structural improvement programs.  As a result, we increased our EBITDA margin to 4.7% (2010: 4.3%).  Our management of working capital continues to be effective, with Net Working Capital at year end improving to €(76) million (2010: €(26) million).

As one of the market leading players in Thailand we worked closely with our customers to ensure their factories maintained the ability to produce at full capacity for as long as possible.  We integrated customers’ IT servers into our network, and re-routed shipments or shipped straight from factory/warehouse. Through these prompt actions, CEVA helped maintain business for our customers over this critical period.  We are now seeing a return to normality in our Thai business.

Oceanfreight was one of the highlights of 2011.  Our continued strategic focus on this area delivered a 17% increase in total Ocean volumes.  During the year we strengthened our Ocean team with several significant new hires, launched our Less-Than-Containerload service and expanded many of our existing Ocean services.

In 2011, we increased our new business pipeline by over 17% and, in Freight Management particularly, we have achieved an increasingly strong conversion rate of targets into new business wins.  Our retention rate for 2011 was over 90%.  As a result, we have achieved a more balanced sector portfolio.  Wins were also spread across the globe, and we now have over 40% of our business in high growth areas, such as Asia Pacific, Latin America, the Middle East and Africa.

On 1 February 2012, CEVA Group plc (“CEVA”), together with its parent CEVA Investments Limited (“CIL”), successfully completed a debt and equity funded financing. Through this transaction we eliminated over €500 million of CEVA indebtedness as well as €355 million of CIL securities, materially reduced annual interest expense, significantly extended our debt maturity profile and improved our credit ratings.  This transaction has strengthened the balance sheet substantially, and positioned us well for future growth.

As we head into 2012, we expect the economic uncertainty of the last few months to continue.  We believe that we have identified and prioritized the right actions to continue to strengthen our business model, even with this external background, and build our market position so that we outperform our peer group in 2012.

For more information contact:

CEVA Group Marketing & Communications
Rebecca Salt
+44 7795 314010
[email protected]