LATEST NEWS
30/10/07
Geodis: Third-quarter revenue growth of 32%
• Accelerated third-quarter revenue growth of 32%, including 7% like-for-like
• Ongoing reorganisation of the Group and implementation of the development and restructuring plans announced previously
• Three-year targets confirmed
THIRD-QUARTER 2007 REVENUE
Growth accelerated in third-quarter 2007 compared to the year-earlier period, with revenue up 31.6%, including 7% growth based on a comparable scope of consolidation and at constant exchange rates.
All geographical segments contributed to the increase.
1. In France, revenue grew 8%. The Groupage and Express businesses continued to expand rapidly, outperforming the market with growth of 9.1% like-for-like on the back of 9.3% in the first-half, again led by a steady rise in volumes and the policy of passing on higher costs – mainly for diesel – to customers. Logistics third-quarter revenues rose 4.4% like-for-like. The improvement, which reversed the trend observed in first-half 2007, was attributable to the start-up of new contracts.
Freight Forwarding and Industrial Projects revenues in France continued to grow rapidly, rising 17.7% at the end of September 2007. Geodis Bourgey Montreuil’s Full Truckload revenues were 3.6% higher, mainly reflecting new contracts in the automotive sector and robust momentum in the manufacturing sector.
2. The Europe region (excluding France) returned to growth in the third quarter. Revenue rose 2.6% like-for-like, with most countries in the region participating in the increase.
3. Revenue outside Europe grew more rapidly in third-quarter 2007, rising 17.9% on a reported basis and 22.1% like-for-like, versus 6.4% and 14.9% respectively in the first half. Asia made a strong contribution to the increase, with like-for-like revenue growth of 37% in the third quarter compared with 18% in the first half of the year, led by China and Hong Kong.
4. Wilson’s revenue contribution amounted to €228.5 million in the third quarter versus €217.1 million in the second quarter and €133.5 million in February and March 2007.
CONSOLIDATED REVENUE FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007
Consolidated revenue rose 25.2% in the first nine months of 2007 compared with the year-earlier period, primarily as a result of the Wilson acquisition. Like-for-like revenue was up 5.1%.
SIGNIFICANT EVENTS OF THE THIRD QUARTER
Integration of Wilson is proceeding according to plan
At the end of September 2007, no major risks had been identified in relation to the Wilson integration process, which should be completed by the end of the year. Integration costs are in line with forecasts provided by the Group at the time of the acquisition.
Relations with the Geodis-Wilson network’s partners have stabilised and there are no significant departures to report from Wilson’s management teams, who now share responsibility for managing the Group’s new Freight Forwarding division. The Geodis-Wilson network has retained all its major customers and also won new business, including a contract with AstraZeneca covering five European countries.
In July 2007, an agreement was signed with the majority shareholder of Wilson’s local correspondent in India, Wilson-Sandhu, providing for the sale of the Group’s 15% interest in the company. Following implementation of this agreement, the Group’s only representative in India will be its subsidiary Geodis-Wilson India.
The new organization structure based on business divisions is being implemented and the restructuring plans announced previously have been launched
As announced at the time of publication of its first-half 2007 results, Geodis took measures in the third quarter to reorganise its operations into business divisions. In Germany, a process was launched in September for the closure of the loss-making Julich groupage site. Currently employing 86 people, the site will be shut down at the end of the year. In Spain, a reorganisation plan based on voluntary departures and early retirement was presented to employee representatives on 27 September. A total of 66 jobs are being eliminated. The aim of the plan, which is being implemented by the new management team, is to accelerate the return to break-even in 2009. The cost of these measures will be recognised in the second half of 2007.
The Group has taken up new opportunities to develop the land-based transport business in France
In September, Geodis extended the reach of its Express transport network in France by acquiring 46 Express, while also pursuing the Groupage branch renewal plan in France.
The Group has announced the acquisition of Rohde & Liesenfeld (R&L), which will extend and deepen Geodis’s international networks
On 28 September, Geodis announced the acquisition of German-based Rohde & Liesenfeld (R&H), the Geodis network’s main partner since 2002. R&L is an international air and sea freight-forwarding group.
The acquisition of R&L will broaden the geographical reach of the Geodis-Wilson network, which will become a major player in the industry by gaining a significant foothold in Germany. The transaction will also enable Geodis to serve new international markets – particularly South Africa, where R&L is well established – and substantially deepen its presence in Latin America. In addition, the Group will benefit from R&L's expertise in handling industrial projects, especially in the oil and gas industry. R&L is expected to achieve 2007 revenue of €270 million (excluding customs duty). Its enterprise value has been estimated at €90 million and Geodis will acquire the shares for €77 million, to be financed by debt. The transaction, which is subject to the approval of the competition authorities, is expected to be completed at the beginning of 2008.
RECENT DEVELOPMENTS AND OUTLOOK
Positive business trends
The third quarter saw a confirmation of the trends observed since the beginning of the year, with sharp rises in both domestic groupage volumes in France and in Geodis-Wilson freight forwarding volumes.
Thanks to the signature of the Mattel contract and the extension of the partnership with ERP in Italy – which will have an impact on 2008 revenue – as well as the start-up of new contracts and the renewal of existing contracts, such as with Pearl in Germany on behalf of IBM, the Group is now in a position to anticipate a return to more sustained growth in Contract Logistics.
Scaling back on property holdings
The rationalisation of the Group’s property assets continued during the period. The capital gains to be recognised in 2007 on disposals completed to date or currently in progress should cover the exceptional integration and restructuring costs incurred during the year. On 26 October, the Group’s Dutch subsidiary Geodis Vitesse agreed to sell a group of warehouses at the Venlo logistics platform in the Netherlands to LaSalle Investment Management for around €40 million. The proceeds are to be received before the end of the year.
Geodis confirms previously announced three-year targets
Geodis is implementing this year all the development, restructuring and reorganisation measures needed to meet its three-year targets.
