Ceva Logistics has reported €1 billion ($1.44 billion) in new business wins in its financial results for the first half of 2011 on its way to €3.4 billion in revenue (up 5.2%) and earnings before interest and tax at €152m, an increase of 29.9%. Automotive was described as an important factor in the growth, although there is concern in the second half of the year about the impact from recent turmoil in the financial markets on consumer spending in the second half.
Ceva’s second quarter results also showed some slackening in the freight sector, with second quarter revenues at €1.7 billion, a fall of 1.8%. However the company stated that revenue would have been up 3.8% except for factors including the weakening of the US dollar against the euro.
The company said it was able to maintain revenues by increasing freight management business wins by 17% year-on-year, with a strong showing from the automotive sector across all regions.
Automotive business represented just over a quarter of the company’s business last year, equal to 26% in terms of year-on-year revenue, and contributed strongly to the improvement, said the company. While the proportion of automotive revenue has been roughly stable in recent years for Ceva, the proportion before the recession of 2008-2009 had been around 32%.
According to Rubin McDougal, chief financial officer at Ceva, the company has seen increases in its automotive businesses in each region of the world, including the US and northern Europe but with particularly strong showings in China and Brazil.
“I was in Brazil the week before last and the auto plants there are all running, in some cases, at their limit,” he told Automotive Logistics, adding that major customers including Fiat, GM and VW all had “pronounced market shares” in that country, and all had plans to add new capacity, though he would not talk about specific volumes.
The company began the first half with an $8m, three-year contract to supply Honda’s division in Brazil and has since seen contract gains with Chrysler, Mercedes, Fiat and others.
Last month, Ceva also renewed an inbound logistics contract with Honda UK for three years (read more here).
Modest growth ahead
Commenting on the turmoil in the financial markets McDougal said that Ceva had seen no connection between it and activity in the supply chain.
“There is always a delay affect, be it good or bad,” he admitted, but said: “Our current view is for modest growth to continue through the course of the year and modest growth is not a bad scenario.”
Ceva’s year-on-year improvements, including the €1 billion of new business wins in the first six months of the year, were led by activity in China and through its Century customers: a group of approximately 100 large global customers who represent over 50% of revenue.
“Of the Century account, 17% are what we consider to be auto accounts,” said McDougal, adding that they represented “the who’s who of the auto industry” including tier one suppliers and carmakers including GM and Fiat.
Amongst Ceva’s tier one accounts are a number of tyre manufacturers and the company has recently signed with Michelin in Thailand for a further three years. See this week’s Global round up for more details.
One of Ceva’s most important customers, Fiat, recently revealed to Automotive Logistics that it is building an in-house freight forwarding function that is intended to replace some of the services traditionally provided by third party logistics providers, including Ceva (read more here). Both Fiat and Ceva have said that the companies continue to work closely together. McDougal declined to comment on the Fiat contract.
