A.P. Møller - Mærsk A/S delivers revenue growth in a challenged market [Shipping Line]
n the second quarter of 2018, A.P. Møller - Mærsk A/S showed progress in the strategic business transformation, reporting revenue growth at the same time as realising synergies through further business integration.
Revenue grew 24% to USD 9.5bn across segments, 5.7% excluding the effect from Hamburg Süd. Revenue growth was seen in key areas such as Logistics & Services, which among others was positively affected by increase in service of our customers supply chain management and in Gateway & Towage.
At the same time, the company realised synergies from the integration of Hamburg Süd and from the increased collaboration across existing transport, logistics and ports businesses, contributing positively to the profitability.
"With revenue up 24% in Q2, we continued to deliver strong growth. The acquisition of Hamburg Süd of course was a positive contributor to growth in our Ocean segment, and we are pleased with the organic growth in non-Ocean. We expect revenue of around USD 40bn in 2018, up almost 50% since 2016," says Søren Skou, CEO of A.P. Møller - Mærsk A/S and continues:
"We also delivered a sharp improvement in unit cost in Ocean, after a Q1 that was negatively impacted by inflow of capacity from the acquisition of Hamburg-Süd and network issues. Profitability was significantly impacted by higher bunker prices in Q2 and remained at unsatisfactory levels. For the rest of the year we expect improvements in our profitability driven by lower unit cost and higher freight rates."
Lower unit costs were mainly driven by a reduction in network costs in Ocean, comprising network changes and increase in loaded volume.
Furthermore, in Q2 the revenue in Ocean grew 25% to USD 7bn, 0.6% excluding Hamburg Süd, and volumes grew 26%, 4.3% excluding Hamburg Süd, which is in line with estimated market growth of around 4%.
Guidance for 2018 including sensitivities
As reported on 7 August 2018, the underlying profit after financial items and tax amounted to earnings before interests, tax, depreciations and amortisations (EBITDA) in A.P. Møller - Mærsk A/S of USD 883m was negatively impacted by increased bunker costs in Ocean. Combined with the development in freight rates and uncertainties related to trade tensions it led to an adjustment in the expectation for EBITDA for the full-year 2018 to reach in the range of USD 3.5 - 4.2bn.
The organic volume growth in Ocean for the full year is still expected slightly below the estimated average market growth of 2-4% for 2018. Further, guidance is maintained on gross capital expenditures (capex) around USD 3bn and a high cash conversion (cash flow from operations compared with EBITDA).
The guidance continues to be subject to uncertainties due to the current risk of further restrictions on global trade and other factors impacting container freight rates, bunker prices and rate of exchange
Posted at 19:18 パーマリンク
A.P. Møller - Mærsk A/S to pursue a separate listing of Maersk Drilling [Shipping Line]
A.P. Møller - Mærsk A/S (A.P. Moller - Maersk) has decided to pursue a separate listing of Maersk Drilling Holding A/S (Maersk Drilling) on Nasdaq Copenhagen A/S in 2019.
Having evaluated the different options for Maersk Drilling, A.P. Moller - Maersk has concluded that listing Maersk Drilling as a standalone company presents the most optimal and long-term prospects for its shareholders, offering them the possibility to participate in the value creation opportunity of a globally leading pure play offshore drilling company with long-term development prospects.
The process has been initiated to ensure that Maersk Drilling is operationally and organisationally ready for a listing in 2019. As part of the preparation, debt financing of USD 1.5bn from a consortium of international banks has been secured for Maersk Drilling to ensure a strong capital structure after a listing. Further details for a listing will be announced at a later stage.
Separation of the oil & oil related businesses
The decision on the future of Maersk Drilling marks a milestone in the business transformation of A.P. Moller - Maersk towards becoming an integrated transport & logistics company as announced on 22 September 2016.
The target was set to find new viable solutions for the oil and oil related businesses within 24 months. During the past two years solutions for Maersk Oil and Maersk Tankers have been found and today the plan to list Maersk Drilling is announced.
For Maersk Supply Service, the pursuit of a solution will continue. However due to challenging markets, the timing for defining a solution is difficult to predict.
Chairman of the A.P. Moller - Maersk Board of Directors, Jim Hagemann Snabe says:
"The Maersk Drilling team has done a remarkable job operating the business at a time of high uncertainty and is well positioned to become a successful company on Nasdaq Copenhagen. The announcement of the intention to list Maersk Drilling completes the decision process on the structural solutions for the major oil and oil related businesses. Yet another important step in delivering on the strategy."
Capital structure and proceeds from the oil & oil related businesses
A.P. Moller - Maersk remains committed to maintaining its investment grade rating which is demonstrated by increased capital discipline over the last two years combined with maintaining a high financial flexibility.
Net cash proceeds to A.P. Moller-Maersk from separation of Maersk Oil, Maersk Tankers and now expected Maersk Drilling is around USD 5bn. Maersk Drilling's separate financing is expected to release cash proceeds of around USD 1.2bn to A.P. Moller - Maersk.
In addition, A.P. Moller-Maersk sold Total S.A. shares for an aggregated amount of around USD 1.2bn during July 2018. This represents the increase in value since signing of the sale of Maersk Oil in August 2017. A.P. Moller - Maersk retains 78.3 million shares in Total S.A. with a current aggregated value of around USD 5bn.
Subject to maintaining investment grade rating it is now expected that:
Maersk Drilling will be demerged via a listing in 2019 with distribution of Maersk Drilling shares to A.P. Moller - Maersk's shareholders
Following the demerger of Maersk Drilling a material part of the remaining Total S.A. shares will be distributed to A.P. Moller - Maersk's shareholders in cash dividends, share buy-backs or as a distribution of the Total S.A shares directly
Growing, digitizing and integrating across transport and logistics
The overall transport and logistics business has grown significantly over the last two years - both organically and inorganically through the acquisition of Hamburg Süd. A turnover close to USD 40bn is expected for 2018, equaling an increase of almost 50 percent since 2016. The non-Ocean business is as planned growing organically at a higher pace than the Ocean business.
Synergies are being realised as expected and the business is on track to deliver around USD 1bn by end 2019 from integration of Hamburg Süd and increased collaboration across the transport and logistics business.
"With the decision made on Maersk Drilling, A.P. Moller - Maersk can stay focused on transitioning into an integrated transport and logistics company and developing solutions to meet our customers end-to-end supply chain management needs. New value adding services as well as customer experience are improving continuously based on digital solutions. We will continue to grow revenue with a specific focus on non-Ocean revenue and at the same time improve our current unsatisfactory level of profitability," says CEO of A.P. Moller - Maersk, Søren Skou.
Chairman of the A.P. Moller - Maersk Board of Directors, Jim Hagemann Snabe continues:
"The Board initiated the fundamental business transformation of A.P. Moller - Maersk almost two years ago. This is a massive undertaking touching all parts of our company globally and I would like to thank the management for progressing on many strategic efforts in parallel."
Posted at 19:17 パーマリンク
CEVA makes further progress in second quarter 2018 [Forwarder]
CEVA Logistics AG
Results for the Second Quarter and Half Year ended 30 June 2018
- Revenue up 5.1% year on year in constant currency
- Adjusted EBITDA of $77 million, up $7 million year on year
- EBITDA margin improved by 30bps in constant currency, driven by Freight Management
- Good business momentum following IPO
- Developing partnership with CMA CGM following regulatory approvals
- Refinancing underway, expected to be completed early August
Baar, Switzerland, 27 July, 2018 - CEVA Logistics AG ("CEVA" or the "Company"), one of the leading asset-light third-party logistics companies, announced today its results for the second quarter and the first half ended 30 June 2018.
Key Financials for Q2
($ million) Q2 2018 Q2 2017 Change YoY Change YoY constant FX
Revenue 1,848 1,721 +7.3% +5.1%
EBITDA (a) 66 59 +11.9% +13.5%
EBITDA margin 3.6% 3.4% +20 bps +30 bps
Adjusted EBITDA (b) 77 70 +10.0% +11.6%
Key Financials for H1
($ million) H1 2018 H1 2017 Change YoY Change YoY constant FX
Revenue 3,638 3,317 +9.7% +5.2%
EBITDA (a) 119 104 +14.4% +15.5%
EBITDA margin 3.3% 3.1% +20 bps +30 bps
Adjusted EBITDA (b) 143 124 +15.3% +15.3%
(a) EBITDA excludes specific items and share-based compensation cost
(b) Adjusted EBITDA includes the proportional contribution of the ANJI-CEVA joint venture and excludes specific items and share-based compensation cost
"CEVA continues to perform well. We now have achieved seven consecutive quarters of strong top-line growth and stronger EBITDA" said Xavier Urbain, CEO of CEVA Logistics. "We continue to reduce our cost base, work on productivity and address our underperforming activities. In the first half of the year, margin growth has been skewed towards Freight Management, we expect Contract Logistics to make more progress in the second half of the year as we have largely addressed the issues. We are committed to further improving our margins and are moving in the right direction."
"Whilst still early days, initial benefits from the deleveraging through the IPO are already materializing. We have increased business with some existing clients and are engaged in a number of promising discussions. In general, we have good momentum in business development. We are also making progress in developing our partnership with our new strategic shareholder CMA CGM."
"Looking ahead, we are confident in further improving our performance this year and in meeting our medium-term targets."
Revenue in Freight Management increased by 8.1% in the second quarter 2018, year on year; in constant currency, revenue growth was 5.4%.
CEVA had good volume growth in Ocean, up 8.3% in the second quarter and ahead of market growth. Air volumes were softer, as in Q1, mainly from the earlier loss of certain customers. However, the implementation of important new contracts which were won during the spring tender season will drive volume growth going forward.
Freight Management EBITDA increased by $7 million year on year to $27 million driven by improved yields in Air, increased productivity and progress in reducing losses in other FM activities. Profits were adversely impacted by increased cost in our US Ground business due to driver shortages, the impact of which is expected to reduce in coming quarters as we take mitigating actions. EBITDA margin improved by 70 bps to 3.2%.
For the first half year 2018, revenue in Freight Management increased by 7.0% year on year in constant currency and EBITDA was $42 million, up $12 million year on year.
Revenue in Contract Logistics increased by 6.8% in the second quarter 2018 year on year; in constant currency, revenue increased by 4.7%.
The acceleration of revenue growth was driven by good volumes in existing contracts as well as the implementation of new business won previously; we had important contract start-ups in consumer/retail, automotive spare parts, technology and e-commerce.
Contract Logistics EBITDA was stable at $39 million. Improvements in productivity at many of the large, focus contracts were offset by issues in a limited number of operations in Italy and in the US. The issues have now been largely addressed and are expected to have a reduced impact over the second half of 2018. Our low margin contract initiative is also gaining traction. As such, we anticipate margins to trend upwards in the second half of 2018.
For the first half year 2018, revenue in Contract Logistics increased by 3.8% year on year in constant currency and EBITDA was $77 million, up $4 million year on year in constant currency. EBITDA margin improved by 10 bps year on year in constant currency.
Good Business Momentum
We continue to see good momentum in business development. CEVA has won more business across all business lines the first six months of 2018 compared to the same period in the prior year with total new business wins approximately 10% higher. We have won or extended a number of important contracts in automotive, industrials, technology, consumer and e-commerce.
The IPO is already showing a positive impact on business development, and the tone of conversation with many of our existing and prospective clients has shifted markedly. We have already secured the first wins and contract renewals which would not have happened without the IPO.
The second quarter of 2018 shows the progress CEVA is making in its transformation with continued good revenue growth and improved EBITDA.
Revenue in the second quarter 2018 was $1,848 million, up 7.3% year on year or 5.1% in constant currency. For the first six months of 2018, revenue was up 5.2% year on year in constant currency. Increased volume in existing contracts as well as new business implementations accounted for the growth despite certain contract losses. Revenue grew well across most sectors, particularly in industrials and healthcare but also in consumer/retail/
e-commerce and automotive.
Adjusted EBITDA in the second quarter 2018 was $77 million, up $7 million year on year. EBITDA margin was 3.6% in the second quarter 2018, an improvement of 30 basis points in constant currency. For the first six months of 2018, Adjusted EBITDA was $143 million up $19 million or 15% year on year.
CMA CGM partnership
CMA CGM has obtained all regulatory approvals for its investment in CEVA. We expect that the CMA CGM securities will be converted into registered shares by no later than 13 August 2018.
Both companies have worked closely together over the past weeks to exploit partnership opportunities in a number of areas, particularly to offer integrated end-to-end solutions and expand geographic coverage. The first contracts have been concluded, where CEVA was introduced to clients from CMA CGM, and further discussions are ongoing.
While CEVA will seek to exploit the opportunities from this partnership, all dealings with CMA CGM will be structured at arm's length and CEVA will continue to work closely with all its ocean carriers in the interest of its clients.
Repayment of Debt and Refinancing
CEVA has used a substantial part of the proceeds from the IPO on SIX Swiss Exchange and the concurrent private placement to CMA CGM in May to repay debt. As a consequence, net debt as of 30 June 2018 was reduced to $1,132 million compared to $2,228 million as of 31 March 2018.
The Company is currently in the process of raising new facilities to refinance the majority of our existing debt at lower interest rates and longer maturities. We have successfully placed a new $475 million Term Loan (TLB; at L+375bps with leverage step-down to L+350bps) and a new $585 million Revolving Credit and Ancillary Facility (at L+237.5bps). We have upsized the TLB in view of strong demand to provide the Company with even more headroom. CEVA has also announced a private offering of EUR300 million of senior secured notes. The refinancing is expected to complete early August, subject to market conditions.
Following the deleveraging from the IPO proceeds and refinancing, CEVA expects to reduce its finance charges by more than $100 million annually, subject to prevailing interest rates and currency drawings.
The Company is committed to further deleveraging with a target of 1.5x-2.0x net debt/adjusted EBITDA in the medium-term.
CEVA is expecting good growth and continued margin progression in the second half of 2018; management is confident to meet expectations, subject to no changes in market conditions.
Medium-term, CEVA is confirming its targets to grow revenue above market and to increase EBITDA margins from the 3.3% achieved in 2017 to at least 4%; this should result in an additional approximately $100 million in Adjusted EBITDA.
Posted at 08:13 パーマリンク
DHL strengthens its position in automotive logistics [Integrator]
DHL Freight has been awarded an extension of its contract with the BMW Group and will continue to manage the vehicle manufacturer's overland transport in 17 countries covered by the companies' previous contract.
DHL Freight wins contract with the BMW Group
Successful renewal of existing business and expansion of collaboration
Custom-tailored Connected Supply Chain solution to monitor and optimize flow of goods
Bonn - DHL Freight has been awarded an extension of its contract with the BMW Group and will continue to manage the vehicle manufacturer's overland transport in 17 countries covered by the companies' previous contract. As a result of the tender, DHL Freight also won an expansion of the collaboration, taking on supply chain management of the BMW Group in seven additional areas. A new DHL Freight custom-made logistics solution was successfully implemented as part of the contract conclusion.
"This achievement represents another step towards Freight 2020, our strategy to become the provider of choice in overland transport by offering the best quality and reliability for the customers who depend on us," declares Uwe Brinks, DHL Freight. "With BMW, we set out to create a solution specifically designed for their needs, one that would provide complete transparency throughout the supply chain, allowing the customer a consolidated overview of extremely complex processes. We have achieved this with Connected Supply Chain, a solution that gives BMW and their partners at DHL Freight the ability to manage potential issues and identify opportunities for further optimization."
Connected Supply Chain (CSC) depicts the entire supply chain digitally, delivering real-time, end-to-end visibility and management control to all relevant stakeholders. Aspects such as order and status data are visible via a central portal, and orders receive a single reference number from beginning to end. Drivers can access the system via a mobile application designed specifically for them. DHL Freight's solution was developed together with AXIT, a specialist for in cloud-based IT solutions for managing cross-enterprise logistics processes, in order to feed CSC with the relevant information.
The transparency and control afforded by CSC give BMW a real-time overview of developments. They can identify potential risks or emergency situations immediately and rapidly counteract them with the support of DHL Freight. As part of the solution, DHL Freight has established a Control Tower, where all streams of goods in Europe are monitored, providing a unique opportunity to consolidate complex data and identify areas where operations may be optimized. BMW can thereby identify potential for savings and monitor the performance of suppliers and carriers in real-time.
DHL Freight's new contract with the BMW Group covers the management of about 90,000 shipments per month within a simultaneously dependable and highly flexible network. Temperature-controlled shipping and dedicated transports are available in all areas covered by the contract.
Posted at 21:32 パーマリンク
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