Supply chain manager Ceva Holdings said the successful implementation of a new business strategy that strengthens local leadership has helped to boost its fourth-quarter revenue and sharpen its competitive edge.
In a statement, Ceva said revenue in the fourth quarter ended December 31, 2014 rose 3.5% to US$2.029 billion in constant currency and down 1.3% as reported. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 33.9% year-over-year, excluding a one-time pension curtailment gain in the fourth quarter of 2013. Adjusted EBITDA including the pension curtailment was down 2.6% year-over-year.
Ceva said its recent performance demonstrates that its strategy, executed in three distinct phases throughout 2014, continues to gain traction. Freight volume trends “remained healthy” in the quarter, with airfreight volume growing 6%, outpacing the market. In ocean freight, controlled volume was up more than 10% year-over-year, outperforming the market.
Contract logistics realized above-market EBITDA of 6.5% in fourth quarter. The unit’s revenue was up 1.4% in constant currency in the quarter and grew 15.4% sequentially.
“The fourth quarter caps a productive year of building Ceva’s competitive advantage,” said Xavier Urbain, group CEO. “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 (airfreight and ocean freight) and contract logistics to enhance customer value.”
Entering 2015, the company said its new business pipeline is up significantly for both freight and contract logistics. Total new business wins for 2014 were up 14% year-over-year. Total freight wins were up 18% year-over-year, with ocean freight wins up 30% year-over-year and airfreight wins showing growth of 14% year-over-year. Total contract logistics wins were up 2% year-over-year.
Ceva recently launched an independent global healthcare sector—previously a sub-sector of consumer and retail—to leverage the company’s presence in this market, with revenues of more than $300 million annually. It 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 January 1, 2015, the company implemented a new local-based operating model, announced in late 2014, to improve the operational efficiency of its global network. The new structure eliminated region-based structures globally, and moved to a 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 said.
It also enables the company to quickly identify and invest in new capabilities to improve its service and differentiate itself from the competition. The transformation is expected to generate annual savings of $50 million to $60 million with a one-time cost of about $30 million.
