March 03, 2015: CEVA Holdings LLC one of the world's leading non‐asset based supply chain management companies, today reported results for the three months ended 31 December 2014.
CEVA's performance in the Fourth Quarter demonstrates that the Company's strategy, executed in three distinct phases throughout 2014, continues to gain traction. Freight Management volume trends remained healthy in the quarter, with Air Freight volume growing six percent, outpacing the market. In Ocean Freight, controlled volume was up more than 10% year-over-year, outperforming the market. Successful implementation of complex new business contributed positively to Q4 revenue growth.
"The Fourth Quarter caps a productive year of building CEVA's competitive advantage," said Xavier Urbain, CEO of CEVA. "We enter 2015 with an executive management team of seasoned industry leaders and a go-to-market strategy based upon Business Lines in Freight Management (Air Freight and Ocean Freight) and Contract Logistics to enhance customer value. On 1 January, 2015, we implemented our new local-based operating model to drive operations excellence in our global network and to be a more responsive and innovative partner to our customers. Our customers' reaction to our progress is highly positive, as evidenced by Q4's top line growth."
Fourth Quarter revenue of $2,029 million was up 3.5% in constant currency and down 1.3% as reported. Adjusted EBITDA was up 33.9% year-over-year, excluding a one-time pension curtailment gain in Q4 2013. Adjusted EBITDA including the pension curtailment was down 2.6% year-over-year.
Contract Logistics realized above market EBITDA of 6.5% in Q4. Contract Logistics revenue was up 1.4% in constant currency in the quarter and grew 15.4% sequentially.
Entering 2015, the Company's new business pipeline is up significantly for both Freight Management and Contract Logistics. Total new business wins for 2014 were up 14% year-over-year. Total Freight Management wins were up 18% year-over-year, with Ocean Freight wins up 30% year-over-year and Air Freight wins showing growth of 14% year-over-year. Total Contract Logistics wins were up two percent year-over-year.
CEVA recently launched an independent global Healthcare sector – previously a sub-sector of Consumer and Retail – to leverage the Company's significant presence in this market, with revenues of more than $300 million annually. CEVA has established business in each of the Healthcare industry's recognized sub-sectors of Medical Disposables, Medical Devices, Vaccines and Biotech, Pharmaceutical and Medical Equipment.
On 1 January, 2015, CEVA implemented its new operating model, announced in late 2014, eliminating region-based structures globally, and moving to an innovative structure that supports CEVA's global Business Lines with 17 local geographic clusters of countries featuring uniform governance and business rules.
The new model increases the responsibility of local leadership – those who are closest to the market and to the customer – allowing for faster decision-making in support of our customers and greater agility and responsiveness to emerging and established market opportunities. It also enables the Company to quickly identify and invest in new capabilities to better serve our customers and differentiate from the competition. The transformation is expected to generate annual savings of $50 million to $60 million with a one-time cost of approximately $30 million that has been booked as a specific item.