Analysis: CMA CGM and AF-KLM – a strong signal to the market
CMA CGM has clearly been busy behind the scenes for some time – highly secret ...
CMA CGM is now fully in control of Ceva, holding more than 98%, and is filing a claim to cancel any outstanding shares.
Following yesterday’s AGM, Ceva announced management changes that will see chief executive Xaiver Urabin, who has turned around the business, become executive advisor to the new chairman, CMA CGM’s Rodolphe Saadé.
Ceva’s new CEO will be group chief operating officer Nicolas Sartini, while Apollo-appointed Marvin Schlanger, who had a brief period as chief executive and chairman of Ceva, has not been re-elected to the board, marking the firm’s final move from its uncomfortable private equity-owned past.
Ceva also announced its first-quarter results, which saw revenues take a 5% hit on negative currency moves. At constant currencies, revenues increased 1.1% to $1.7bn. Group ebitda was $134m in the first quarter
Ceva said: “Ebitda continues to be negatively impacted by the performance of Contract Logistics in Italy, as the contract issues are in the process of being solved on one contract whilst an additional provision of $10m was created for the second challenging contract.
“In addition, despite stronger yields, 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 dollars, negatively impacted ebitda by a further $3m in the first quarter.”
On a pre-IFRS 16 basis, revenues in Contract Logistics fell 8.7% to $901m, but Ceva said it “handled solid volumes in some contracts”, and added that the retention rate had “significantly improved”.
Revenue in freight management, on a pre-IFRS 16 basis, fell 0.7% to $797m, but increased by 3.8% on a constant currency basis.
Ocean volumes rose 6.2% to 192,900 teu, ahead of market growth, perhaps hearalding good things to come through its new owner.
Ocean yield, in net revenue per teu, was $288 , up from $226 per teu in the previous quarter. But air volumes fell 6.9% year on year, “mainly from downtrading of some tradelanes and a selective approach to new business”, said Ceva. Air yield in net revenue per ton rose 2.2% to $806.
Crucially, Ceva’s net debt of $2.42bn, or $1.26bn on a pre-IFRS 16 basis, was down 43%.
“This decrease is in line with the significant de-leveraging following the initial public offering,” it said.
New business wins were up 12%, with new or extended automotive contracts in Benelux, Asia and Americas regions; consumer & retail contracts in North America, IMEA and Asia regions, and technology and Industrial contracts in North America.
Ceva added: “The strategic partnership with CMA CGM is also delivering additional revenues.”
Overall, it said, the company had performed in line with its roadmap and targets, while its new strategic plan with the shipping line would “drive an improvement in CEVA’s financial performance and help it turn around quickly”.
Ceva is to open an operational centre in Marseilles for management and support teams, totalling 200 jobs.
Its targets for 2021 remain unchanged, with expected revenues of more than $9bn, through 5% average organic growth and the addition of CMA CGM Logistics. It has upgraded its 2021 management expectations on adjusted ebitda from $380m to $470-490m in pre-IFRS 16 implementation.
Meanwhile, Rolf Watter will serve as vice-chairman and has been re-elected to the board for a year, along with Daniel Hurstel and Emanuel Pearlman. Farid Salem, Michel Sirat and Béatrice de Clermont-Tonnerre are new board members.
Group results for Q1 2019
|Key Financials for the First Quarter
|Change YoY constant FX
|(USD million)||Reported||Impact||Pre-IFRS 16||Reported||Pre-IFRS 16||Pre-
|Ebitda margin||7.9%||5.8%||2.1%||3.0%||-90 bps||-90 bps|
|Net debt as of March 31||2,427||1,161||1,266||2,228||-43.2%|
(a) Ebitda excludes specific items and share-based compensation cost (SBC) in the table and in the whole document.
(b) Adjusted ebitda includes the 50 % share of the Anji-CEVA joint venture and excludes specific items and share-based compensation cost.