News / Gefco 2020 revenue hit hard by pandemic, but cost-cutting eased the pain

Global car sales and production decimated by the pandemic resulted in automotive logistics specialist Gefco today reporting that its €3.8bn ($4.6bn) 2020 revenue represented a decline of 17.3% on 2019.

Chairman Luc Nadal said: “Our revenues declined at the height of major disruptions in global business, but during the second half of 2020, we were able to increase our activities in line with customers’ production ramp-up schedules.

“We are pleased with our ability to maintain a robust operating margin in this difficult context,” he added.

Revenue for its finished vehicle logistics (FVL) unit declined 21.9% to €1.55bn, but it was a performance largely in line with the automotive industry, which saw a 22% decrease in European production, according to IHS Markit.

Gefco noted that the final quarter of 2020 was on par with the same period in 2019.

The larger overland transport & contract logistics division saw revenue decline 18.1%, on a like-for-like basis, to €1.83bn, but this was “less impacted than FVL  due to our diversified customer portfolio”.

Its air and sea freight forwarding division reported a 1.6% increase in revenue, to €339.8m, on the back of increased volumes of medical equipment and PPE ordered in response to the pandemic.

And Pavel Ilichev, executive vice president of finance & strategy, said cost cuts had mitigated the worst of the revenue declines. He said: “We experienced a 19.7% decrease in revenues due to disruptions in our customers’ businesses around the world, but maintained a significant 3.7% operating margin, against 4.3% in 2019.

“When the crisis began in March with no end in sight, we took measures to limit the financial impact by reinforcing strict financial controls throughout the organisation. Moreover, our asset-light business model continued to offer elasticity in fixed and variable costs, and we benefited from government support to safeguard employment in a number of countries.

“Gefco’s unprecedented positive free cash flow strengthened our liquidity position, and we had no requirement to seek additional funding,” he added.