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CEVA Restructuring Includes CEO Switch

The CMA CGM Group is entering "a second phase" in its efforts to restructure CEVA Logistics' balance sheet. A year after it launched its tender offer for CEVA Logistics, the CMA CGM Group said it was strengthening CEVA in a bid to return the forw

Benzinga · 01/17/2020 16:05

The CMA CGM Group is entering "a second phase" in its efforts to restructure CEVA Logistics' balance sheet.

A year after it launched its tender offer for CEVA Logistics, the CMA CGM Group said it was strengthening CEVA in a bid to return the forwarder to profitability.

"After an initial transitional phase of reorganization, which made it possible to deploy new processes and define an ambitious strategy for a return to profitability, CEVA Logistics is implementing its second phase of development," said a CMA CGM statement.

The new business plan will see the development of new products, a network in Africa and Southeast Asia, a digitalization plan and investment in IT tools with a particular focus on freight management.

The French carrier's strategy also includes the departure of current CEVA CEO Nicolas Sartini. He is being replaced by Mathieu Friedberg, senior vice president for the Commercial and Agencies network of the CMA CGM Group and previously CEO of Delmas and CMA CGM Logistics, the logistics entity of the CMA CGM Group before the acquisition of CEVA Logistics.

"I would like to thank Nicolas Sartini for having successfully accompanied the first phase of CEVA's transformation," said Rodolphe Saadé, chairman and chief executive officer of the CMA CGM Group.

"Thanks to his recognized expertise and leadership and to his strengthened team, Mathieu Friedberg will successfully complete the second phase of the strategic plan," Saadé said.

Guillaume Col has been appointed chief operating officer. He was previously general manager for France and North Africa at Kuehne + Nagel.

CMA CGM is hoping a change in management will help it return CEVA to profit. A sharp reduction in costs helped CMA CGM boost profits in the third quarter, but the purchase of the forwarder continued to weigh heavily on the bottom line of the container shipping and logistics conglomerate.

CMA CGM's core earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.012 billion in the third quarter were almost three times higher than the $364.5 million reported in the third quarter of 2018, while the carrier also reported an EBITDA margin of 13.3%, up from just 6% a year earlier.

When announcing its results in November, CMA CGM denied the completion of its multibillion purchase of CEVA was overburdening the company with debt. However, it did confirm it would continue to divest in a bid to raise $2 billion by next year.

In December, the shipping giant confirmed it had signed a binding agreement to sell a portfolio of 10 port terminals to Terminal Link for $968 million. The transaction is expected to close in the spring, pending approval by antitrust authorities.

Image Sourced from Pixabay