CEVA Group Plc Reports 2006 Annual Results First Annual Disclosure After Acquisition by Apollo Management L.P. (1)

HOOFDDORP, The Netherlands, May 31 /PRNewswire/ -- CEVA Group Plc, the leading global pure play contract logistics company released its first annual report today, following its acquisition by Apollo Management L.P. on November 4, 2006. These statements represent a major milestone in the company's history and include the following highlights:

-- Aggregate revenue increased to EUR3,497 million from EUR3,354 million in 2005

-- Pro forma adjusted EBITDA increased to EUR237 million from EUR228 million in 2005

-- Operating income decreased to (EUR11) million from EUR97 million in 2005

-- EBITDA decreased to EUR78 million from EUR181 million in 2005

-- Operating income and EBITDA in 2006 were materially impacted by significant non-recurring acquisition and restructuring costs

-- Net loss was EUR106 million compared to a net loss of EUR227 million in 2005

-- Net cash flow was EUR220 million compared to EUR30 million in 2005

-- Maintained high contract renewal rates

-- Successful launch of our new brand CEVA in December 2006

Commenting on the 2006 results, CEO Dave Kulik said: "During the long and challenging sale process which took place during 2006, our revenue and operating results remained robust. We managed a smooth transition from being a division of TNT N.V. to standing on our own as a pure play logistics company. Most important, however, was our capability to maintain the close relationships with our customers, continuing an impressive renewal rate and winning significant new contracts in 2006. This continuing success is the result of the hard work and experience of our management and our employees - the same team that will continue moving CEVA to become the world's most favoured logistics company."

The revenue progression in 2006 was the result of growth in the Italy, Rest of World, and Rest of Europe regions. This was partially offset by a decline in the United Kingdom. In 2006, certain non-recurring charges relating to the termination and restructuring of contracts incurred in advance of the acquisition by Apollo Management L.P. significantly impacted operating expenses and the resulting EBITDA. Nevertheless, a strong focus on business fundamentals ensured strong cash generation during the year.

In the first quarter of 2007, CEVA announced that John Pattullo will take up the position of Chief Executive Officer in August 2007. Dave Kulik will then become Vice Chairman of CEVA.

At the end of May 2007, CEVA announced that it will acquire freight forwarding company EGL, Inc. for approximately US$2 billion. CEVA currently intends to finance the acquisition with a combination of debt, with up to approximately US$200 million of cash equity from CEVA's balance sheet and up to approximately US$100 million new cash equity from Apollo (US$65 mm minimum commitment). The combination will create the world's fourth largest integrated supply chain management company, with global capabilities in freight forwarding and contract logistics. It is anticipated that the transaction will close in the third quarter of 2007, and is subject to EGL shareholder approval, regulatory approval and certain other conditions."

    
    2006 FINANCIAL STATEMENTS
    CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME AND EXPENSE
    in EUR millions
                               Aggregated  Successor  Predecessor Predecessor
                                Successor   period       period       2005
                                   and      ended        ended
                               Predecessor December 31, November 3,
                                  2006       2006 (1)     2006
                                 (unaudited)    
    Revenues and other income     3,497.1    553.2       2,943.9     3,354.2
    Operating expenses            3,508.4    541.1       2,967.3     3,257.2
    Operating income                (11.3)    12.1         (23.4)       97.0
    Net financing costs             (76.5)   (27.0)        (49.5)      (79.3)
    Results from investments in
    associates                       (2.4)     0.1          (2.5)       35.7
    Loss before income taxes        (90.2)   (14.8)        (75.4)      (18.0)
    Income taxes                     (9.6)    (5.8)         (3.8)      (16.6)
    Loss from discontinued
    operations                       (6.4)       -          (6.4)     (192.0)
    Loss for the period            (106.2)   (20.6)        (85.6)     (226.6)

    Attributable to:
    Shareholders                   (108.4)   (21.8)        (86.6)     (227.3)
    Minority interests                2.2      1.2           1.0         0.7

(1) The company was incorporated on August 9, 2006 and had no operations until the acquisition of the logistics business from TNT N.V. on November 4, 2006.

    
    CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS
    in EUR millions
                                                  Successor      Predecessor
                                                  December 31,   December 31,
                                                      2006           2005
    Non-current assets                                1,647.3       1,334.4
    Current assets                                    1,113.6       1,090.8
    Assets classified as held for sale                      -          79.7
    Total assets                                      2,760.9       2,504.9

    Attributable to equity holders of the parent        285.6        (633.4)
    Minority interests                                   33.2           5.9
    Group equity                                        318.8        (627.5)
    Non-current liabilities                           1,548.6         523.8
    Current liabilities                                 893.5       2,382.7
    Liabilities classified as held for sale                 -         225.9
    Total equity and liabilities                      2,760.9       2,504.9

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