News Details :
News Details:
Headline : Switzerland : CEVA Logistics new governance to accelerate its strategic transformation
Summary : CEVA Logistics AG (CEVA or the Company) held its Annual General Meeting (AGM), which approved all resolutions and appointed a new Board of Directors. CEVA also announces its results for the first quarter of 2019.

New step in CEVAs Corporate Governance
CEVA held its Annual General Meeting (AGM) earlier. All resolutions were approved by shareholders. Among the key resolutions was the proposal to renew governance following CMA CGMs successful completion of its Public Tender Offer to acquire CEVA.

Rodolphe Saad elected Chairman of the Board of Directors
Rodolphe Saad, Chairman and Chief Executive Officer of CMA CGM, has been elected as Chairman of the CEVA Board of Directors, with Rolf Watter acting as Vice-Chairman.

Marvin O. Schlanger, Victor Balli, Dr. 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 one-year term of office until the AGM 2020. Three new Board members have been elected: Farid Salem, Michel Sirat and Batrice de Clermont-Tonnerre.

The three independent directors are Rolf Watter, Manny Pearlman and Batrice de Clermont-Tonnerre. Finally, KPMG has been elected as the independent auditor for the next one year term of office until the AGM 2020.

A new CEO for CEVA
Nicolas Sartini, who currently holds the position of Group Chief Operating Officer and Deputy CEO is appointed Chief Executive Officer as from June 1st. He will bring his experience and expertise to CEVA as it embarks on a new journey. He will replace Xavier Urbain who will become Executive Advisor to Rodolphe Saad.

Squeeze out procedure
After the settlement of the public tender offer and taking into account additional shares CMA CGM has subsequently purchased in the market, it now holds more than 98% of the share capital and voting rights of CEVA. CMA CGM will therefore proceed with the squeeze out procedure and will file the claim for cancellation of the remaining outstanding CEVA shares.

Growth in Revenue
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 the same period of 2018. In constant currency, the revenue increased by 13.2%.

Freight Management (on a pre-IFRS 16 basis)
Revenue in Freight Management decreased by 0.7% to US$797 million in the first quarter of 2019 (Q1 2018: US$803 million). In constant FX, revenue increased by 3.8% year-on-year. CEVA continued to experience good volume growth in Ocean, up 6.2 % year-on-year to 192,900 TEUs, ahead of market growth. Ocean yield (Net revenue /TEU), was a robust US$288 /TEU, which represents a strong increase compared with the fourth quarter of 2018 (US$226 /TEU). Air volumes decreased by 6.9% year-on-year, mainly from downtrading of some trade lanes and a selective approach to new business whilst Air yield (Net revenue per ton) has increased by 2.2% to 806 US$/t.

Contract Logistics (on a pre-IFRS 16 basis)
Revenue in Contract Logistics decreased by 8.7% to US$901 million in the first quarter of 2019 (Q1 2018: US$987 million) as significant currency impact has hit major geographies (Turkey, Brazil and Australia). In constant FX, revenue decreased by 1.1% year-on-year. The company handled solid volumes in some existing contracts. The retention rate in Contract Logistics has significantly improved in the first quarter of 2019.

Operating Result
The Groups EBITDA was US$134 million in the first quarter of 2019. On a pre-IFRS 16 basis the Groups 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 the first quarter of 2019 was US$22 million. Group Adjusted EBITDA (on a pre-IFRS 16 basis) in the first quarter of 2019 amounted to US$47 million.

Freight Management (on a pre-IFRS 16 basis)
EBITDA was down US$2 million year-on-year to US$13 million in the first quarter of 2019. EBITDA margin was down 30bps at 1.6% for the first quarter of 2019, compared to the same period of 2018. Meanwhile, productivity actions continued to deliver improvement in the File per Operator ratio in both Air (up 3%) and Ocean (up 3.5%).

Contract Logistics (on a pre-IFRS 16 basis)
Contract Logistics EBITDA was down by US$15 million to US$23 million for the first quarter of 2019 (Q1 2018: US$38 million). Despite productivity improvements in the majority of geographies and structural margin improvement in several low margin contracts, one of the two challenging contracts in Italy continued to weigh on the Groups overall performance, and an additional provision of US$10 million was taken as described above. In addition, unexpected factory shutdowns in the automotive sector have negatively impacted performance in Central Europe and Brazil. As a consequence, the EBITDA margin was down 130 bps in the first quarter of 2019 compared to the same period of 2018,to 2.6%.


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