Taking over the running of a UK logistics business in the middle of a recession is not the easiest task and Leigh Pomlett admits: “It’s been a challenging four or five months. The recession has affected our volumes and we have had to take vigorous action to manage it.”
Pomlett had no hesitation about joining John Pattullo, his old DHL boss, at Ceva. “I was sitting in the garden minding my own business one Sunday afternoon when John gave me a call and suggested that I might like to join him at Ceva.”
“With DHL I had been working all over the world for a number of years and I had wanted to come home, so this was perfect for me,” he says.
Ceva’s results for 2009 highlight the scale of the challenge, with sales globally down by 13 per cent to 5.5bn euros and EBITDA down 28 per cent to 233m euros. In response, the group cut its costs by some 125m euros.
Having had to deal with the effects of the recession, he is now looking forward to growing the business. “We have had some restructuring so we have done the cost reduction. But the last quarter was quite strong and business has started to grow.
“January and February have been encouraging and we are not planning any further restructuring.”
And he can point to some notable contract wins. In February Ceva won a three-year contract to provide a white glove two-person home delivery service for Multiyork, the furniture manufacturer, in a deal that involves some 16,000 deliveries a year.
It renewed its newspaper distribution contracts with the Telegraph Media Group, Express Newspapers and Sport Newspapers, although it was outbid on its iconic News International contract in a 12-way competitive pitch.
In the automotive sector it picked up a contract to manage the delivery of spare parts to approximately 200 BMW and Mini dealers across the UK using a specialist collaborative delivery service, specific to the requirements of moving automotive parts overnight.
Volumes in Ceva’s important automotive sector have been growing over the past few months, but it has also seen increases in its technology and industrial business.
The group reported that new business wins in 2009 were up ten per cent on 2008 and a programme of cross-selling wins generated revenue of more than 550m euros.
However, Pomlett is not getting carried away by the successes, pointing out that the UK is nowhere near back to the business levels of 2007 – 2008.
“We’ve looked at the business long and hard,” he says. “There is growth in industrial, particularly aerospace, and we have had some big contracts in consumer and retail. But growth is tough – we have been involved in some hard negotiations.”
Customers have been responding to the recession in different ways, he says. Some sectors have been very badly affected by the recession while others have hardly been affected at all.
“There are some positive messages. You shouldn’t assume that customers have all been hit in the same ways. Some customers have hardened prices and been successful.”
Pomlett points out that the restructuring that has taken place means that the business is a lot leaner and fitter than before the recession. The agenda for Ceva now is growth.
The group has set out some clearly defined goals for the coming year. In particular it wants to increase its share of business with its top 100 global customers by cross-selling its range of logistics and forwarding services globally.
It plans to increase its presence in the ocean freight market where it is a relatively small player despite strong growth.
In contract logistics it has targeted the consumer and technology sectors as strong opportunities. Ceva has a relatively small share of the consumer market, while it sees technology as one of the fastest growing sectors with generally above average margins.
Looking for growth means responding to any market challenges, Pomlett says. And he points to the importance of strengthening relationships with customers.
“We want to get closer to the customer than ever before. Customers are challenging us more. I have seen more change in the past few months than in the past 30 years that I have been in this business,” he says.
“We are pushing the boundaries of what we have done before. That’s encouraging. It gives us the opportunity to add value and move away from commodity services to greater added-value.
“Ceva is operationally extremely good – we implement new business extremely well. I want that to be a platform for growth.”
Leigh Pomlett is executive vice president for Ceva Logistics’ UK and Ireland business – joining the company in September last year.
He has spent some 30 years in transport and logistics. He started his career at the BRS division of the National Freight Consortium, which went on to become Exel Logistics.
He held a number of senior positions at Exel including president of the automotive division globally.
He was also responsible for the acquisition of Tibbett & Britten.
Exel itself was acquired by DHL in 2005 and Pomlett became chief executive, mainland Europe, for DHL Supply Chain before leaving in January 2009.