CEVA Logistics upgrades its 2021 expectations. Strategic partnership with CMA CGM - Acquisition of CMA CGM Log Montag, 26. November 2018 - 07:01

CEVA Logistics AG / Key word(s): Acquisition
CEVA Logistics upgrades its 2021 expectations. Strategic partnership with
CMA CGM - Acquisition of CMA CGM Log

26-Nov-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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Baar, Switzerland, 26 November, 2018 - CEVA Logistics AG ("CEVA" or the
"Company") announced today its revised strategic plan which includes three
key levers to accelerate top-line growth and improve profitability: the
launch of a strategic partnership with CMA CGM and the acceleration of
turnaround efforts with the support of CMA CGM's corporate transformation
expertise, the leveraging of the CMA CGM's overall platform to accelerate
revenue growth, and the acquisition of CMA CGM's freight management
activities ("CMA CGM Log").

Key highlights of the revised strategic plan:

  * CEVA's 2021 revenue target above US$ 9 billion, reflecting a 5% average
    annual organic growth and the contribution of CMA CGM Log of US$ 630
    million

  * Stronger footprint in Ocean Freight Management

  * Upgraded 2021 management expectations on Adjusted EBITDA raised from US$
    380 million to US$ 470-490 million

  * Acquisition of CMA CGM Log for US$ 105 million (cash free/debt free)
    paid in cash

  * Appointment of Nicolas Sartini as Chief Operating Officer and Deputy CEO
    as of 1 January, 2019

  * Intensified business relationship with CMA CGM while keeping an arm's
    length governance

"With the support of our strategic partner CMA CGM, I am proud to open a new
chapter for CEVA Logistics and announce that we can accelerate our
transformation and turnaround action plan in the next three years and
beyond. This can be achieved by a combination of our commercial and sales
focus, cross selling with CMA CGM customers, our own productivity actions,
the integration of CMA CGM Log within CEVA and sharing resources with CMA
CGM in the field of procurement and administrative functions. I am very
happy to welcome Nicolas who has successfully turned around the APL shipping
company as my Deputy and COO." says Xavier Urbain, CEO of CEVA Logistics.

A Realistic Enhanced Margin Improvement Trajectory
CEVA has been on a transformation journey since 2014 with a commitment to
strengthening its approach to new business development, transform its IT
infrastructure and improve the company's operational performance and
productivity through increased standardization and streamlined processes. At
the time of the IPO, CEVA had been halfway through this journey and has
continuously been pursuing these actions since. The strategic partnership
with CMA CGM now opens up significant opportunities to accomplish this
journey more rapidly, secure a more robust execution and take advantage of
CMA CGM's customer base and turnaround expertise.

The combination of CMA CGM's and CEVA's expertise in corporate
transformations is expected to deliver faster and more sustainable
efficiency.
The revised management expectations rely on the following three key
initiatives:

  * Acceleration: Accelerate CEVA's transformation by leveraging CMA CGM's
    operational and commercial expertise and benefit from cross-selling
    opportunities

  * Efficiency: Leverage CMA CGM's platform to generate cost efficiencies in
    terms of back-office optimization

  * CMA CGM Log: Strengthen CEVA's footprint in Ocean Freight Management
    through the acquisition of CMA CGM's Freight Management activities.

CEVA will remain an independent and standalone listed company. This
strategic partnership is aligned with CMA CGM's strategy to offer end-to-end
logistics solutions to its customers, pioneering the development of
integrated logistics solutions, while retaining an arm's length business
relationship with CEVA.

Management expects that these three key initiatives will result in an
incremental US$ 100 million of Adjusted EBITDA by 2021 compared to the
objective set at the IPO. As a result, management expects an Adjusted EBITDA
range of US$ 470 to 490 million by 2021. In terms of EBITDA margin, the
objective remains to achieve more than 5% in the longer term when full
benefits materialize.

CEVA's Board of Directors will formally confirm these management
expectations when the Public Tender Offer prospectus presented by CMA CGM is
issued.

Acceleration
CEVA expects to accelerate its transformation and will introduce
value-enhancing initiatives, most notably:

  * Cross-selling with CMA CGM, strengthen key account relations and
    increase "share of wallet", while diversifying to medium and small size
    customers, focus on the value-add segments like cold chain logistics and
    LCL (Less Than Container Load), develop fast-growing sectors
    (E-commerce, Retail) organically and penetrate new geographic areas with
    strong growth potential (Asia, Middle East, Africa)

  * Reinforcing CEVA's management with some of CMA CGM's highly experienced
    managers in the field of company turnaround, a streamlined organization
    simplifying the current matrix organization, with increased control from
    the central level

  * Improving operators' productivity as a result of process improvements
    and technology, accelerated SG&A efficiency, leverage shared service
    centers across functions/geographies, accelerated deployment of IT tools
    (WMS-Warehouse Management System, TMS-Terminal Management System).

Efficiency
CEVA expects to leverage CMA CGM's overall platform to realize efficiency
improvements. Back-office functions synergies have been already identified,
including savings on current outsourcing contracts, transfer of functions to
shared service center and more efficient billing and cash collection. On the
procurement side, savings on services and consumables are also expected to
contribute to savings.

CMA CGM Log
CEVA has agreed in principle, subject to regulatory approvals, confirmatory
due diligence and legally required consultation processes, to acquire 100%
of CMA CGM's freight management activities for a total consideration (cash
free/debt free) of US$105 million paid in cash. Closing of the CMA CGM Log
acquisition is expected in the second quarter of 2019 following completion
of the Public Tender Offer by CMA CGM for CEVA.

CMA CGM Log expects to generate revenues of US$ 630 million and an EBITDA of
US$ 16 million. The company has 1,200 employees in 32 countries via
directly-owned entities and has cooperation agreements in 26 additional
countries. CMA CGM Log has a significant presence in high growth markets
including India, China, Australia and the US.

The integration of CMA CGM Log into CEVA Freight Management Business line is
expected to significantly reinforce CEVA's footprint in Ocean Freight
Management with 170,000 additional controlled TEUs, addressing CEVA's target
to reach close to 1,000,000 TEUs and enable expansion of its product
offering in the field of Sea FCL (Full Container Load) and LCL (Less than
Container Load), Customs Clearance, carrier haulage and Air freight
Forwarding. The combination of CMA CGM Log and CEVA's Freight Management
Business is expected to result in significant cost synergies.

Appointment of Nicolas Sartini
Nicolas Sartini has been appointed as Chief Operating Officer and Deputy CEO
as of 1 January, 2019. He has been acting as CEO of APL since CMA CGM's
takeover of APL in June 2016. In this role, Nicolas Sartini has been
instrumental to the quick turnaround of APL between 2016 and 2018 and will
bring to CEVA a wealth of expertise in the field. Prior to joining APL, he
held various positions within CMA CGM as Group Senior Vice President.
Nicolas Sartini graduated from the Paris-based Ecole des Hautes Etudes
Commerciales business school in 1983.

Update on the Public Tender Offer
On 26 November, 2018 CMA CGM has published its pre-announcement for the
Public Tender Offer on CEVA shares. CMA CGM will offer to CEVA shareholders
to either:

  * Remain invested in CEVA, capturing the expected significant value
    creation potential embedded in the new strategic plan or

  * Exit in the context of CMA CGM's public tender offer at a value of CHF
    30 per share in cash.

Publication of the prospectus including the report of the board of directors
of CEVA, which will include its recommendation to all shareholders, is
expected in mid-January 2019.

It is CEVA's and CMA CGM's objective to maintain CEVA's listing on the SIX
Swiss Exchange with a significant free float and with governance principles
in line with best practices for Swiss listed companies. The Public Tender
Offer process is expected to close in April 2019.

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

For additional information please contact:
Investors:
Pierre Benaich
SVP Investor Relations
pierre.benaich@cevalogistics.com
+41 41 547 0048

Media:
Matthias Hochuli
Group Head of Marketing and Communications
matthias.hochuli@cevalogistics.com
+41 41 547 00 52

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 visit www.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.


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End of ad hoc announcement

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