Strong sales help Ceva push up profits

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Ceva has reported a 25 per cent rise in sales and operating profit for 2010 after a strong performance in the last quarter.

EBITDA for the year rose from 233m euros in 2009 to 292m euros, while revenue rose from 5.5bn euros to 6.8bn euros

In the fourth quarter EBITDA was up 35 per cent on sales up 22 per cent. This follows a strong performance in the third quarter, leading chief executive John Pattullo to describe 2010 as a  year of two halves.

“I’m delighted with the progress made across the group in 2010. After a challenging start to the year, we have focused relentlessly on business basics and on driving a series of transformational projects,” he said.

Key to the second half improvement was a move to greater centralisation of buying in the freight management business which enabled it to address the issue of rising freight rates and margin compression seen in the first half.

The business is still only three years old and has been working on a number of large transformational projects. A key initiative in the Freight Management business is Project Uno which is designed to spread a consistent best practice across the business globally.

The Contract Logistics business has been focusing on continuous improvement (kaizen) along with lean processes. Pattullo said each operating unit was now set targets to come up with improvements each year. As a result, Ceva had developed a database of 7,000 “kaizens” which could be used to spread best practice across the group.

Pattullo pointed out that this kind of engineering-based operational work was common in manufacturing but logistics had been slower to take it up.

In Northern Europe sales were above 2009 levels “but economic recovery lagged somewhat as Europe encountered the Iceland volcanic ash cloud, the repercussions of cargo security threats and a particularly harsh early winter snowfall,” the group said. “Despite these factors we made quarter on quarter improvements in EBITDA as our program of initiatives gathered pace across the region.”

Asia Pacific and the Americas both performed strongly, the group said. “The Asia Pacific region was driven by strong performance in China and our joint venture in the automotive sector alone contributed 94m euros to the group’s revenue. We also expanded our relationship with one of the world’s largest cosmetics and beauty companies in Indonesia and India.  Growth in the Americas was broad-based.  A robust performance in the automotive sector underpinned good growth in Contract Logistics and we made excellent progress in Freight Management. 

Pattullo said: “We have a well defined operating model, a clear plan for future growth and have established good momentum as we enter 2011.  We are confident that we will continue to grow both revenue and profit in the coming months.”

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