CEVA hampered by exchange rates in Q1 but reports underlying growth

CEVA has announced its financial results for the first quarter ended March 31, 2015. It reported revenue of $1.78bn, a decline of 4.8% year-on-year. The company also recorded adjusted EBITDA of $51m, an increase of 18.6% over the first quarter of 2014. Accordingly CEVA’s margin stood at 2.87%.

CEVA stated that the headline figures were significantly affected by currency fluctuation and stated that adjusted results show growth across the business. In constant currency CEVA states that revenue actually grew by 4.6% while EBITDA improved by 23.3%.

Revenue from freight management was up at incurred exchange rates and up 6.1% in constant currency. Volume trends showed sustained growth in the quarter, with air freight volume growing 5.2% and ocean freight up 5.0% year-over-year.

In the first quarter, freight management realized EBITDA improvement, reflecting continued market share gains and focus on enhancing efficiency and profitability. Contract logistics realized an EBITDA margin of 4.9% in the first quarter, with revenue up 3.4% in constant currency.

“The decision to move to a business line/ cluster operating model has energized the company,” said Xavier Urbain, CEO of CEVA. “We are seeing the visible impact of the operational improvements, ongoing streamlining of processes and greater responsiveness to our customers’ needs enabled by the new operating model. Our customers are responding favourably, as demonstrated by our first quarter performance.”

Productivity improvements remain a key focus of the company. A competence centre for ground transport has been launched to drive volume growth, increase productivity and reduce cost per mile. Processes in freight management have been streamlined and show improved productivity per employee.

Business development has also been strengthened, notably through a global route development management programme to drive field sales and the newly independent healthcare sector which continued to generate growth in the first quarter. During the First Quarter, the freight management new business pipeline grew materially, ending the quarter 55% above the prior year while the contract logistics pipeline advanced 15% year-over-year. CEVA states that its new business pipeline remains robust in both freight management and contract logistics.