GEFCO Group, a global provider of industrial supply chain services and the European leader in automotive logistics, today announced its 2017 full year results following another strong 12-month performance. Group revenue was €4.4bn, up 5.1% from €4.2bn in 2016, with earnings before interest, taxes, depreciation and amortisation (EBITDA) accelerating by 16% to €201m.
- Turnover increased by 5.1% to €4.4bn
- EBITDA increased by 16% to €201m
- Market Clients sales led with growth of 8.1%, supported by strong development of Global and Major Accounts
- EBITDA growth underpinned by higher gross profit, good performance across all the divisions and a good level of cost control
- Overland division – improvement plan delivering profit through network and cost optimisation
- Freight Forwarding division – improvement plan delivering profit through strong sales growth to new customers and trade lane specialisation
-Group balance sheet remains strong
Luc Nadal, Chairman of the Management Board of GEFCO, said: “2017 has been another strong year for GEFCO with progression in both our revenue and profitability, reflecting the strength of our offering to customers and our ongoing drive for operational excellence.
“Our strategy continues to deliver growth, as demonstrated by an improvement of over 8% year on year in revenue from Market Clients. Our operational excellence programme, commenced in 2014, has made strong progress in turning around the company’s historically loss-making divisions, and reached a milestone in 2017 with both our Overland and Freight Forwarding business returning to profit.”
Strong growth in Market Clients sales
GEFCO’s attractive offering made solid gains across all divisions, with a significant portion of the Group’s top line growth coming from a strong performance in the Market Clients segment (i.e. accounts outside of the historical and stable PSA and General Motors mandates). The group increased these revenues by 8.1% with significant contract wins within the automotive market coming from Jaguar-Land Rover, Volkswagen, Tesla, Audi, Volvo, Renault-Nissan, and also Carglass and London EV Company. GEFCO also continued its rapid expansion in non-automotive with new contracts in Food, Retail and Fashion (Amazon, Baron de Rothschild, Kiabi, LC Waikiki and L’Oréal), Energy (Gazprom Neft-Supply), Aerospace (Safran), Industrial Manufacturers (Severstal), Life Sciences and Healthcare (Fresenius, Procter and Gamble), recognising the unique skills and capabilities within the organisation. Non-automotive sales now represent over a third of GEFCO’s [non-PSA revenue].
Divisional improvement plans delivering success
2017 marked a milestone in the group’s long-term improvement strategy with both the Overland and Freight Forwarding business returning to profit. Both divisions were underperforming when the new management team arrived in 2013, and have since improved margins every year as a result of GEFCO’s drive for operational excellence.
The focus has been on rigorous KPIs, operating excellence, global monitoring, increased innovation and internal communication to test and share best practices.
GEFCO Industrial Services showcases vertical integration
GEFCO has continued its strategy of moving into adjacent verticals where value can be created for clients.
Deep integration with clients provides GEFCO with greater access to vertical opportunities than that afforded to the competition. As such, it is increasingly possible to identify efficiencies and create value through a combination of logistical services, industrial operations and materials controls.
Accordingly, 2017 saw GEFCO take its first step into high value modular sub assembly with the capture of a profitable tender for dashboard preparation.
Focus on innovation
This year has seen an acceleration of GEFCO’s strategy towards innovation. The company’s stance has long been to anticipate change rather than respond to it. Accordingly, GEFCO has this year implemented innovation initiatives throughout the organisation and established an Innovation Lab specifically to find, encourage and explore internal ideas
GEFCO will also remain focused on its “test and learn” approach to examining new relevant technologies that enter the marketplace to determine their ability to help clients or improve efficiencies. Pilot schemes in a wide range of processes are underway, including data analytics (such as IoT, Big Data, Artificial Intelligence, Blockchain), Meta Platforms and automation around production means. These pilots have yielded demonstrable progress including low frequency track & trace devices, Artificial Intelligence applications in route and flows optimisation processes, Blockchain projects to secure and digitalise administrative processes, and robots for car handling.
Additionally, the company has this year formalised partnerships with several incubators and accelerators including the recently announced Techstars network to explore the longer-term changes facing the industry.