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27.07.2018 – 07:07

CEVA Logistics AG

EQS-Adhoc: CEVA makes further progress in second quarter 2018


EQS Group-Ad-hoc: CEVA Logistics AG / Key word(s): Half Year Results
CEVA makes further progress in second quarter 2018

27-Jul-2018 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.

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Press Release

CEVA makes further progress in second quarter 2018

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 Q2 2018 Q2 2017 Change YoY Change YoY constant FX
($ million)

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 H1 2018 H1 2017 Change YoY Change YoY constant FX
($ million)

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."


Freight Management
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.

Contract Logistics
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.

Financial results
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.

Outlook
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.

Investor call
CEVA Logistics will hold an investor call and webcast today at 12.00 CET to
present its second quarter and first half 2018 results. To participate, please
dial-in the following number:
Switzerland: +41 44 580 03 09
UK: +44 20 3365 3210
US: +1 (866) 349 6093
Global: +31 20 341 82 49

Webcast:https://www.kpnwebshow.nl/3fy5gm9k

Documents
CEVA Logistics Q2 2018 report and presentation are available under :
http://www.ir.cevalogistics.com/websites/ceva/English/3000/results-centre.html

The recording of the investor call will be available at the above address after
the call.

-End-

Notes to Editors:

1. All references to EBITDA exclude specific items and share-based compensation
cost

For additional information please contact:

Investors:
Pierre Bénaich
SVP Investor Relations
pierre.benaich@cevalogistics.com
+41 41 547 0048

Media:
David Urbach
SVP Corporate Development
david.urbach@cevalogistics.com
+41 799 333 083

Cathy Howe
Pilot Marketing
ch@pilotmarketing.co.uk
Tel: +44 (0)208 941 5381

CEVA - Making business flow
CEVA Logistics, a global asset-light third-party logistics company, designs and
operates industry leading supply-chain solutions for large and medium-size
national and multinational companies. Its integrated network in Freight
Management and Contract Logistics spans more than 160 countries. Approximately
56,000 employees are dedicated to delivering effective solutions across a
variety of industry sectors where CEVA applies its operational expertise to
provide best-in-class services. CEVA generated revenue of $7 billion and
adjusted EBITDA of $280 million in 2017. CEVA Logistics is listed on SIX Swiss
Exchange under ticker symbol CEVA. For more information, please
visitwww.cevalogistics.com.

Safe Harbour Statement:

This news release contains specific forward-looking statements. These
forward-looking statements include, but are not limited to, discussions
regarding the proposed refinancing described above, its guidance for 2018 and
beyond, discussions regarding industry outlook, CEVA's expectations regarding
the performance of its business or joint ventures, its liquidity and capital
resources, and other non-historical statements. These statements can be
identified by the use of words such as "believes" "anticipates," "expects,"
"intends," "plans," "continues," "estimates," "predicts," "projects,"
"forecasts," and similar expressions. All forward-looking statements are based
on management's current expectations and beliefs only as of the date of this
news release and, in addition to the assumptions specifically mentioned in the
above paragraphs, there are a number of factors that could cause actual results
and developments to differ materially from those expressed or implied by these
forward-looking statements, including the effect of local and national economic,
credit and capital market conditions, a downturn in the industries in which we
operate (including the automotive industry and the air freight business), risks
associated with CEVA's global operations, fluctuations and increases in fuel
prices, CEVA's substantial indebtedness, restrictions contained in its debt
agreements and risks that it will be unable to compete effectively. Further
information concerning CEVA and its business, including factors that potentially
could materially affect CEVA's financial results, is contained in the annual and
quarterly reports of CEVA Logistics AG (and its predecessor CEVA Holdings LLC),
available on the Company's website, which investors are strongly encouraged to
review. Should one or more of these risks or uncertainties materialise or the
consequences of such a development worsen, or should underlying assumptions
prove incorrect, actual outcomes may vary materially from those forecasted or
expected. CEVA disclaims any intention or obligation to update publicly or
revise such statements, whether as a result of new information, future events or
otherwise.

Disclaimer:
The notes have not been and will not be registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and may not be offered or sold in
the United States absent registration or an applicable exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.

The notes will be offered and issued only (i) in the United States, to persons
who are "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) and (ii) outside the United States, to persons who are not "U.S.
persons" (as defined in Rule 902 under the Securities Act) in reliance on
Regulation S of the Securities Act other than retail investors in the European
Economic Area, whereby a retail investor is defined as a person who is one (or
more) of: (i) a retail client as defined in point (11) of Article 4(1) of
Directive 2014/65/EU, as amended; or (ii) a customer within the meaning of
Directive 2002/92/EC, as amended, where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in Directive 2003/71/EC, as amended.

This announcement is for information purposes only and shall not constitute an
offer to sell or the solicitation of an offer to buy the notes and shall not
constitute an offer, solicitation or sale of any notes in any jurisdiction in
which such offering, solicitation or sale would be unlawful. The notes are not
being offered to potential purchasers in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. As regards the United Kingdom, this
announcement, and any other material related thereto, is being distributed for
information purposes only and its distribution is not, nor is it intended to be,
a communication of an invitation or inducement to engage in investment activity.
Without prejudice to the foregoing, this announcement and other material are
directed only at persons who: (i) fall within the definition of investment
professional under article 19(5) of the United Kingdom Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial
Promotion Order"); or (ii) are high net-worth entities and other persons falling
within article 49(2)(a) to (e) of the Financial Promotion Order; or (iii) are
persons falling within article 43 of the Financial Promotion Order; or (iv) are
persons to whom an invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act 2000
(as amended)) in connection with the issue or sale of any notes may otherwise be
lawfully communicated or caused to be communicated (all such persons together
being referred to as "Relevant Persons"). This announcement is directed only at
Relevant Persons and must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or investment activity to which this press
release relates is available only to Relevant Persons and will be engaged in
only with Relevant Persons.

This announcement is not a public offering or an offer of securities to the
public in any jurisdiction, including, but not limited to Switzerland or any
European Economic Area member state that has implemented Directive 2003/71/EC,
and any amendments thereto (together with any applicable implementing measures
in any member state).

MiFID II professionals/ECPs-only / No PRIIPs KID - Manufacturer target market
(MIFID II product governance) is eligible counterparties and professional
clients only (all distribution channels). No PRIIPs key information document
(KID) has been prepared as not available to retail in EEA.

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End of ad hoc announcement------------------------------------------------------

708525  27-Jul-2018 CET/CEST