Quarter Two 2018 CEVA Logistics AG - www.cevalogistics.com

 
CEVA Logistics AG

Quarter Two 2018

                    www.cevalogistics.com
CEVA Logistics AG
Quarter Two, 2018
Interim Financial Statements

Table of Contents

Unaudited Condensed Consolidated Three Months Income Statement ....................................................................................... 2
Unaudited Condensed Consolidated Six Months Income Statement ............................................................................................ 3
Unaudited Condensed Consolidated Statement of Comprehensive Income ................................................................................. 4
Unaudited Condensed Consolidated Balance Sheet ...................................................................................................................... 5
Unaudited Condensed Consolidated Statement of Cash Flows ..................................................................................................... 6
Unaudited Condensed Consolidated Statement of Changes in Equity .......................................................................................... 7
Notes to the Unaudited Condensed Consolidated Interim Financial Statements ......................................................................... 8

Cautionary statement: This document contains forward looking statements which are subject to risk factors associated with, amongst others,
the economic and business circumstances occurring from time to time in the countries and markets in which the Group (as defined below)
operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of
variables, which could cause actual results to differ materially from those currently anticipated.

                                                                                                                                                                     1
Unaudited Condensed Consolidated Three Months Income Statement
                                                                                               THREE MONTHS ENDED 30 JUNE                THREE MONTHS ENDED 30 JUNE²
$ millions                                                               Note                                        2018                                       2017
                                                                                        Before       Specific                      Before       Specific
                                                                                specific items    items and                specific items    items and
                                                                                       and SBC          SBC1         Total        and SBC          SBC1         Total

Revenue                                                                   6            1,848             -         1,848          1,721             -          1,721

Work contracted out                                                                     (923)             -          (923)          (858)            -          (858)
Personnel expenses                                                                      (570)          (12)          (582)          (520)          (9)          (529)
Other operating expenses                                                                (289)          (18)          (307)          (284)           6           (278)
Operating expenses excluding depreciation, amortization and impairment                (1,782)          (30)        (1,812)        (1,662)          (3)        (1,665)

EBITDA                                                                    6               66           (30)           36             59            (3)            56

Depreciation                                                                             (14)            -            (14)           (13)           -            (13)
Amortization and impairment                                                              (17)            -            (17)           (14)           -            (14)

Operating income                                                                          35           (30)             5            32            (3)            29

Finance income                                                                             2              -             2              2             -             2
Finance expense                                                                          (53)          (23)           (76)           (57)         (12)           (69)
Foreign exchange gain/(loss)                                                              28              -            28            (13)            -           (13)
Net finance income / (expense)                                                           (23)          (23)           (46)           (68)         (12)           (80)

Net result from joint ventures                                                             4             -              4              5            -              5

Profit/(Loss) before income taxes                                                         16           (53)           (37)           (31)         (15)           (46)

Income tax income/(expense)                                               8              (11)            3              (8)            1             -             1
Profit/(Loss) for the period                                                               5           (50)           (45)           (30)         (15)           (45)

Attributable to:
Non-controlling interests                                                                                                -                                          -
Equity holders of the Company                                                                                         (45)                                       (45)

Earnings per share (in US$)                                              10
Basic & Diluted                                                                                                     (1.15)                                     (3.91)
Basic - adjusted                                                                        0.13                                       (2.61)
Diluted - adjusted                                                                      0.13                                       (2.61)
¹ Refer to Note 7 for details on specific items and non-cash share based compensation costs (SBC)
2
    Accounting for a capital reorganization relating to the legal merger of CEVA Logistics AG and CEVA Holdings LLC has been applied

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                                        2
Unaudited Condensed Consolidated Six Months Income Statement

                                                                                                  SIX MONTHS ENDED 30 JUNE                 SIX MONTHS ENDED 30 JUNE²
$ millions                                                               Note                                         2018                                      2017
                                                                                        Before        Specific                      Before      Specific
                                                                                specific items     items and                specific items   items and
                                                                                       and SBC           SBC1         Total        and SBC         SBC1         Total

Revenue                                                                   6            3,638               -         3,638         3,317             -         3,317

Work contracted out                                                                    (1,798)             -        (1,798)        (1,627)            -       (1,627)
Personnel expenses                                                                     (1,119)          (16)        (1,135)        (1,020)         (16)       (1,036)
Other operating expenses                                                                 (602)          (21)          (623)          (566)           2          (564)
Operating expenses excluding depreciation, amortization and impairment                 (3,519)          (37)        (3,556)        (3,213)         (14)       (3,227)

EBITDA                                                                    6              119            (37)            82           104           (14)           90

Depreciation                                                                              (33)             -           (33)           (25)           -           (25)
Amortization and impairment                                                               (34)             -           (34)           (28)           -           (28)

Operating income                                                                           52           (37)            15            51           (14)           37

Finance income                                                                               3             -             3              3             -             3
Finance expense                                                                          (112)          (23)          (135)         (104)          (12)         (116)
Foreign exchange gain/(loss)                                                                10             -            10            (20)            -           (20)
Net finance income / (expense)                                                             (99)         (23)          (122)         (121)          (12)         (133)

Net result from joint ventures                                                              9              -             9              9            -             9

Profit/(Loss) before income taxes                                                         (38)          (60)           (98)           (61)         (26)          (87)

Income tax income/(expense)                                               8               (17)            3             (14)          (15)            -           (15)
Profit/(Loss) for the period                                                              (55)          (57)          (112)           (76)         (26)         (102)

Attributable to:
Non-controlling interests                                                                                                 -                                         -
Equity holders of the Company                                                                                         (112)                                     (102)

Earnings per share (in US$)                                              10
Basic & Diluted                                                                                                      (4.42)                                    (8.87)
Basic & Diluted - adjusted                                                              (2.17)                                      (6.61)
¹ Refer to Note 7 for details on specific items and non-cash share based compensation costs (SBC)
2
    Accounting for a capital reorganization relating to the legal merger of CEVA Logistics AG and CEVA Holdings LLC has been applied

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                                         3
Unaudited Condensed Consolidated Statement of Comprehensive Income
                                                                                       THREE MONTHS ENDED 30 JUNE                  THREE MONTHS ENDED 30 JUNE
$ millions                                                                                                   2018                                        2017
                                                                                              Specific                                    Specific
                                                                       Before specific     items and               Before specific     items and
                                                                       items and SBC             SBC1        Total items and SBC             SBC1        Total

Profit/(Loss) for the period                                                        5           (50)           (45)           (30)         (15)           (45)

Items that will not be reclassified to Profit and Loss:
Remeasurements of retirement benefit obligations                                    -               -             -             -            -              -

Items that may be reclassified subsequently to Profit and Loss:
Tax effects of items in OCI                                                          -             -               -             -            -              -
Currency translation adjustment                                                   (55)             -            (55)           (2)            -            (2)
Total comprehensive income/(loss) for the period, net of income tax               (50)          (50)          (100)           (32)         (15)           (47)

Attributable to:
Non-controlling interests                                                                                         -                                          -
Equity holders of the Company                                                                                 (100)                                       (47)

Total comprehensive profit/(loss) for the period                                                              (100)                                       (47)

                                                                                         SIX MONTHS ENDED 30 JUNE                    SIX MONTHS ENDED 30 JUNE
$ millions                                                                                                   2018                                        2017
                                                                                              Specific                                    Specific
                                                                       Before specific     items and               Before specific     items and
                                                                       items and SBC             SBC1        Total items and SBC           SBC1          Total

Profit/(Loss) for the period                                                      (55)          (57)          (112)           (76)         (26)          (102)

Items that will not be reclassified to Profit and Loss:
Remeasurements of retirement benefit obligations                                    -               -             -             -            -              -

Items that may be reclassified subsequently to Profit and Loss:
Tax effects of items in OCI                                                          -             -               -            -             -             -
Currency translation adjustment                                                   (16)             -            (16)           30             -            30
Total comprehensive income/(loss) for the period, net of income tax               (71)          (57)          (128)           (46)         (26)           (72)

Attributable to:
Non-controlling interests                                                                                         -                                          -
Equity holders of the Company                                                                                 (128)                                       (72)

Total comprehensive profit/(loss) for the period                                                              (128)                                       (72)
¹ Refer to note 7 for details on specific items and non-cash share based compensation costs (SBC)

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                                 4
Unaudited Condensed Consolidated Balance Sheet

                                                                                                        AS AT 30 JUNE       AS AT 31 DECEMBER¹
$ millions                                                                          Note                         2018                     2017

ASSETS
Non-current assets
Intangible assets                                                                                               1,409                   1,448
Property, plant and equipment                                                                                     167                     169
Investments in joint ventures                                                        13                           104                      98
Deferred income tax assets                                                                                        110                     108
Prepayments                                                                                                        45                      44
Other non-current assets                                                                                          113                     106
Total non-current assets                                                                                        1,948                   1,973

Current assets
Inventory                                                                                                          20                      18
Trade and other receivables                                                                                     1,113                   1,053
Prepayments                                                                                                        85                      65
Contract assets                                                                       3                           142                        -
Accrued income                                                                                                       -                    131
Income tax receivable                                                                                              12                      12
Cash and cash equivalents                                                                                         327                     295
Assets held for sale                                                                 12                             4                        -
Total current assets                                                                                            1,703                   1,574

TOTAL ASSETS                                                                                                    3,651                   3,547

EQUITY
Capital and reserves attributable to equity holders
Share capital                                                                         9                             4                       1
Share premium                                                                                                     783                        -
Convertible securities                                                                                            378                        -
Other reserves                                                                                                  2,312                   2,319
Accumulated deficit                                                                                            (3,110)                 (2,997)
Attributable to equity holders of the Company                                                                     367                    (677)

Non-controlling interests                                                                                           3                       3

Total Group equity                                                                                               370                     (674)

LIABILITIES
Non-current liabilities
Borrowings                                                                           11                         1,422                   2,197
Deferred income tax liabilities                                                                                     9                       8
Retirement benefit obligations                                                                                    107                     111
Provisions                                                                                                        130                     125
Other non-current liabilities                                                                                      56                      60
Total non-current liabilities                                                                                   1,724                   2,501

Current liabilities
Borrowings                                                                           11                            37                     187
Provisions                                                                                                         64                      68
Trade and other payables                                                                                        1,398                   1,449
Contract liabilities                                                                  3                            40                        -
Income tax payable                                                                                                 18                      16
Total current liabilities                                                                                       1,557                   1,720

TOTAL EQUITY AND LIABILITIES                                                                                    3,651                   3,547
¹ Accounting for a capital reorganization relating to the legal merger of CEVA Logistics AG and CEVA Holdings LLC has been applied

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                            5
Unaudited Condensed Consolidated Statement of Cash Flows

                                                                       THREE MONTHS     THREE MONTHS SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                       ENDED 30 JUNE    ENDED 30 JUNE               JUNE                JUNE
$ millions                                                   Note              2018             2017                  2018             2017

Profit/(Loss) before income taxes                                               (37)             (46)                  (98)             (87)

Adjustments for:
Depreciation, amortization and impairment                                        31               27                    67               53
Finance income                                                                    (2)              (2)                   (3)              (3)
Foreign exchange (gains) and losses                                             (28)              13                   (10)              20
Finance expense                                                                  76               69                  135               116
Share of profit from equity accounted joint venture                               (4)              (5)                   (9)              (9)
Share based compensation costs                                                     6                2                     9                5

Changes in provisions:
Retirement benefit obligations                                                     -                 -                   (2)              (1)
Long-term Provisions                                                               -               (3)                    7               (4)

Changes in working capital:
Inventory                                                                         (5)               -                    (4)              (2)
Trade and other receivables                                                     (15)             (52)                  (32)             (29)
Prepayments and accrued income / contract assets                                 55              (16)                  (49)             (29)
Trade and other payables including contract liabilities                         (32)              90                   (34)             (10)

Changes in non-current prepayments                                                (3)              (3)                   (3)              (3)
Changes in non-current assets and liabilities                                     (6)              (2)                   (5)              (5)
Cash generated (used for) / from operations                                      36               72                   (31)              12

Interest cost paid                                                              (53)             (40)                   (87)            (71)
Other financing cost paid                                                       (28)               (7)                  (33)            (15)
Net income taxes paid                                                             (7)              (6)                  (13)            (17)
Net cash (used for) / from operating activities                                 (52)              19                  (164)             (91)

Capital expenditure                                                             (32)             (26)                  (53)             (51)
Proceeds from sale of property, plant and equipment                               1                2                     1                3
Interest received                                                                  -               3                     3                5
Net cash (used for) / from investing activities                                 (31)             (21)                  (49)             (43)

Issuance of shares                                                                 1                 -                    1                 -
IPO proceeds (gross)                                                          1,198                  -               1,198                  -
IPO transaction costs                                                            (16)                -                  (16)                -
Repayment of borrowings                                        11              (988)             (82)               (1,017)              (98)
Proceeds from non-current borrowings                           11                  5               (5)                   64               19
Proceeds from current borrowings                               11                  8              87                     14             112
Net cash (used for) / from financing activities                                 208                  -                 244                33

Change in cash and cash equivalents                                             125                (2)                 31              (101)
Cash and cash equivalents at beginning of period                                203              239                  295               333
Foreign exchange impact on cash and cash equivalents                              (1)              (3)                  1                 2
Cash and cash equivalents at end of period                                      327              234                  327               234

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                               6
Unaudited Condensed Consolidated Statement of Changes in Equity

                                                                                                                                       Attributable
                                                                                                                                         to equity        Non-
                                                                           Share       Convertible         Other     Accumulated      holders of the   controlling         Total Group
$ millions                                              Share capital    Premium        Securities       reserves       deficit         Company         interest              equity
Balance as at 1 January 2017¹                                       1              -                 -        2,258        (2,800)             (541)              3                (538)
Currency translation adjustment                                      -             -                 -           30               -               30               -                 30
Share based compensation reserve                                     -             -                 -            5               -                5               -                  5
Loss attributable to equity holders for the period                   -             -                 -             -          (102)            (102)               -               (102)
Balance at 30 June 2017                                             1              -                 -        2,293        (2,902)             (608)              3                (605)

Restated as at 1 January 2018 2                                     1              -                 -       2,319          (2,998)           (678)               3               (675)
IPO proceeds                                                        3         817              378                 -              -          1,198                 -             1,198
IPO transaction costs                                                -        (34)                -                -              -             (34)               -                (34)
Currency translation adjustment                                      -           -                -             (16)              -             (16)               -                (16)
Share based compensation reserve                                     -           -                -               9               -               9                -                  9
Loss attributable to equity holders for the period                   -           -                -                -          (112)           (112)                -              (112)
Balance at 30 June 2018                                             4         783              378           2,312          (3,110)            367                3                370
1 Accounting  for a capital reorganization relating to the legal merger of CEVA Logistics AG and CEVA Holdings LLC has been applied. Refer to Note 2 for details
of the capital reorganization accounting treatment
2 Refer to Note 3 for details on the restatement due to IFRS adjustments

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                                                      7
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
     1.    General Information

CEVA Logistics AG (the “Company”) was established as a holding company on 21 February 2018 in Switzerland. The address of its registered
office is Grabenstrasse 25, 6340 Baar, Switzerland. The founder of the Company was CEVA Holdings LLC. On 3 May 2018 CEVA Holdings LLC
legally merged with CEVA Logistics AG, with CEVA Logistics AG being the surviving entity that then listed on the SIX Swiss Exchange.

CEVA Logistics AG and its subsidiaries (collectively, the “Group” or “CEVA”) design, implement and operate complete end-to-end Freight
Management and Contract Logistics solutions for multinational and small and medium sized companies on a local, regional and global level.
CEVA Logistics AG is the immediate parent of CEVA Group Plc, a company incorporated on 9 August 2006 in England and Wales as a UK public
company with limited liability.

On 4 May 2018, CEVA Logistics AG completed an IPO on the SIX Swiss Exchange with gross proceeds of CHF 821 million (US$ 820 million),
which successfully closed on 8 May 2018. At the same time, CEVA Logistics AG sold mandatory convertible securities to CMA CGM S.A. (“CMA
CGM”) in the amount of CHF 379 million (US$ 378 million), which will be converted to shares of CEVA Logistics AG upon the receipt of
regulatory approvals obtained on 9 July 2018, and the satisfaction of certain other conditions.

These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors of
CEVA Logistics AG on 27 July 2018.

     2.    Basis of Preparation

The unaudited condensed consolidated interim financial information for the three and six months ended 30 June 2018 has been prepared
on a going concern basis and in accordance with IAS 34, ‘Interim financial reporting’. The unaudited condensed consolidated interim financial
information should be read in conjunction with the annual financial statements of CEVA Holdings LLC (predecessor entity to CEVA Logistics
AG following legal merger) for the year ended 31 December 2017, which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union and in accordance with IFRIC interpretations. As from the merger the
preparation of the consolidated interim financial report is in conformity with IFRS as issued by the International Accounting Standards Board
(IASB) and comply with Swiss law. We have not identified any material differences between EU-IFRS and IFRS as issued by the IASB.

In order to effect the merger of CEVA Holdings LLC with the Company, the series A1 and A2 preference shares of CEVA Holdings LLC were
first converted into common shares of CEVA Holdings LLC. This resulted in 1.15 million CEVA Holdings LLC common shares. The holders of
these common shares were then entitled to receive 10 common shares of CEVA Logistics AG for each CEVA Holdings LLC common share held
after conversion of the A1 and A2 preference shares. This resulted in 11.5 million shares of CEVA Logistics AG being issued on merger and
prior to IPO.

Under the principles of capital reorganization accounting, the Company has reported the whole prior period results and statement of
comprehensive income of CEVA Holdings LLC and its subsidiaries rather than including them only from the capital reorganization date but
has reflected the new equity structure of CEVA Logistics AG from 1 January 2017 in doing so. This gives rise to a difference on consolidation,
called the capital reorganization reserve, which is included within other reserves as shown in the table below:

                                                     Preferred stock,                                             Attributable
                                                      Common stock                                                  to equity        Non-
                                                      and Additional                    Other    Accumulated     holders of the   controlling     Total Group
$ millions                                            paid in capital Share Capital   reserves      deficit        Company         interest          equity
CEVA Holdings LLC - Balance as of 1 January 2017                1,443             -          816       (2,800)            (541)              3            (538)
Merger                                                         (1,443)           1         1,442             -                -               -               -
CEVA Logisitcs AG - Balance as of 1 January 2017                     -           1         2,258       (2,800)            (541)              3            (538)

For the current reporting and comparatives, the financial statements of the individual Group entities were combined on a line-by-line basis
by adding together comparable items of assets, liabilities, equity and income and expenses. Balances, transactions and unrealized gains or
losses on transactions between the combined and consolidated entities, including their subsidiaries, were eliminated in full.

     3.    Accounting Policies

The accounting policies applied are consistent with those applied in the consolidated financial statements of CEVA Holdings LLC (predecessor
entity to CEVA Logistics AG following legal merger) as at and for the year ended 31 December 2017, and as described in those consolidated
financial statements which can be found at www.cevalogistics.com, except as described above.

New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first time for the financial year beginning on 1 January 2018:
 IFRS 2, “Share Based Payments” – Clarifies the accounting for cash-settled share-based payment transactions that include a performance
  condition, the classification of share-based payment transactions with net settlement features, and the accounting for modifications of
  share-based payment transactions from cash-settled to equity-settled. This standard does not have any material impact on the financial
  statements.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                                 8
 IFRS 9, “Financial Instruments” – Addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS
  9 was issued in November 2009 and October 2010, and further amended in July 2014. It replaces the parts of IAS 39 that relate to the
  classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories:
  those measured as at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification
  depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the
  instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair
  value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other
  comprehensive income rather than the income statement, unless this creates an accounting mismatch. IFRS 9 relaxes the requirements for
  hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item
  and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes.
  Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. IFRS 9 also introduces a single
  impairment model and removes the need for a triggering event to be necessary for recognition of impairment losses.
  The Group concluded that the classification and measurement basis for its financial assets and liabilities will be largely unchanged by
  adoption of IFRS 9. The main impact of adopting IFRS 9 arose from the implementation of the expected loss model regarding trade debtors.
  The calculated impact at 1 January 2018 under the “simplified approach” is US$3 million. No material impact on profit for future periods is
  expected.
 IFRS 15, “Revenue from Contracts with Customers”. This new standard on revenue recognition supersedes IAS 18 Revenue, IAS 11
  Construction Contracts and related interpretations. The new standard establishes uniform requirements regarding the nature, amount,
  timing, and time period of revenue recognition. Revenue is recognized when a customer obtains control of a good or a service and thus has
  the ability to direct the use and obtain the benefits from the good or service. The standard provides a principles-based five-step model that
  must be applied to all categories of contracts with customers.
  The Group carried out a review of existing contractual arrangements as part of this process. We concluded that IFRS 15 does not have a
  material impact on the Contract Logistics Business. Regarding the Freight Management business, the timing of revenue recognition from
  certain types of contracts did change because according to IFRS 15 revenue is recognised overtime instead of at a point in time. As a result,
  accrued income and trade and other payables balances are affected by US$13 million and US$11 million. This led to an increase of US$2
  million in retained earnings. No material impact on profit for future periods is expected.
  IFRS 15 requires contract assets and liabilities to be presented separately. The Group has presented US$142 million as contract assets and
  US$40 million as contract liabilities as of 30 June 2018 on separate balance sheet lines (US$3 million non-current contract assets is included
  in the non-current prepayments as of 30 June 2018). In prior periods, the amounts were presented as accrued income or included within
  trade and other payables respectively.
 IFRIC 22, “Foreign Currency Transactions and Advance Consideration”- This interpretation addresses foreign currency transactions: the date
  of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset
  or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or
  receipt. The new interpretation requires application for annual periods beginning on or after 1 January 2018. No material impact is expected.

Restated opening balance sheet 1 January 2018
IFRS 9 and IFRS 15 are adopted by using the modified retrospective method without restating comparatives. The following tables show the
adjustments recognized for each individual line item regarding the changes as described above. Line items that were not affected by the
changes have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. The
adjustments are explained in more detail by above.
                                                               AS AT 31 DECEMBER 2017     IFRS 9 adjustment    IFRS 15 adjustment   AS AT 1 JANUARY 2018
$ millions

ASSETS
Trade and other receivables                                                    1,053                    (3)                    -                  1,050
Accrued income                                                                   131                      -                  13                     144
Total current assets                                                           1,574                    (3)                  13                   1,584

TOTAL ASSETS                                                                   3,547                    (3)                  13                   3,557

EQUITY
Capital and reserves attributable to equity holders
Share capital                                                                      1                      -                     -                     1
Other reserves                                                                 2,319                      -                     -                 2,319
Accumulated deficit                                                           (2,997)                   (3)                    2                 (2,998)
Attributable to equity holders of the Company                                   (677)                   (3)                    2                   (678)

Total Group equity                                                              (674)                   (3)                    2                   (675)

LIABILITIES
Trade and other payables                                                       1,449                     -                   11                   1,460
Total current liabilities                                                      1,720                     -                   11                   1,731

TOTAL EQUITY AND LIABILITIES                                                   3,547                    (3)                  13                   3,557

New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2019,
and have not been applied in preparing these unaudited condensed consolidated interim financial statements:
 IFRS 16, “Leases” – The new standard addresses the definition of a lease, recognition and measurement of leases and establishes principles
  for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                         9
from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees such as CEVA. The standard replaces IAS 17
  “Leases”, and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2019.
  The Group is currently working on implementing a new system that will help track all its leases so as to produce a full impact assessment of
  IFRS 16: a significant impact is expected that will increase reported EBITDA, as current operating lease charges will be replaced by additional
  depreciation and finance charges. On the balance sheet, both assets and liabilities will increase significantly from 1 January 2019. The Group
  does not intend to retrospectively adopt this standard;
 IFRIC 23, "Uncertainty over income tax treatments" - This interpretation clarifies the accounting for uncertainties in income taxes, and to be
  applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is
  uncertainty over income tax treatments under IAS 12. IFRIC 23 is effective for annual reporting periods beginning on or after 1 January 2019.
  No material impact is currently expected.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

     4.     Critical Accounting Estimates and Judgments

The preparation of financial statements in accordance with generally accepted accounting principles under IFRS requires the Group to make
estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure
of contingent assets and liabilities in the financial statements. Estimates and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The resulting accounting estimates will, by definition, rarely equal the related actual results. Actual results may differ significantly from these
estimates, the effect of which is recognized in the period in which the facts that give rise to the revision, become known.

In preparing these unaudited condensed consolidated interim financial statements, the significant judgments made by management in
applying the Group’s accounting policies and the key sources of estimation uncertainty, were the same (being impairment of goodwill, income
taxes, retirement benefits, provisions for onerous contracts, provisions and contingent liabilities) as those that applied to the consolidated
financial statements of CEVA Holdings LLC (predecessor entity to CEVA Logistics AG following legal merger) as at, and for, the year ended 31
December 2017.

     5.     Financial Risk Management

The Group’s operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial
position, results of operations and cash flows. The Group’s risk management objectives and policies are consistent with those disclosed in
the consolidated financial statements as at, and for, the year ended 31 December 2017.

The Group operates internationally and generates foreign currency exchange risks arising from future commercial transactions, recognized
assets and liabilities, investments and divestments in foreign currencies other than the US dollar, the Group’s reporting currency. The main
exchange rates are shown below:

                                                   2018                                                    2017
                                            June closing Three Month Average   Six Month Average    June closing Three Month Average   Six Month Average

British pound                                   0.7572               0.7351              0.7273         0.7678               0.7818              0.7935
Euro                                            0.8559               0.8387              0.8267         0.8754               0.9097              0.9243
Chinese yuan                                    6.6171               6.3787              6.3708         6.7793               6.8603              6.8767

As a result of our global operations, our business, results of operations and financial condition may be materially adversely affected by
fluctuations in currency exchange rates. For example, we are subject to currency risks because our revenues may be generated in different
currencies from the currencies in which our related costs are incurred, and because our cash flow may be generated in currencies that do
not match our debt service obligations. In addition, our reporting currency is the U.S. dollar, and therefore our reporting results are subject
to translational risks relating to currency exchange rate fluctuations. Given the volatility of exchange rates, our failure to effectively hedge
or otherwise manage such currency risks effectively may materially adversely affect our financial condition and results of operations.

     6.     Segment Information

The Group’s operating and reporting segments are its Freight Management and Contract Logistics businesses which are the main focus of
the Group’s chief operating decision maker (“CODM”), the Executive Board of the Group (the “Executive Board”). This is the primary way in
which the CODM is provided with financial information. The Group’s internal organization and management structure is also aligned to the
two businesses. All reporting to the CODM analyses performance by Freight Management and Contract Logistics business activity, and
resources are allocated on this basis. Disclosure has been included in the segment note to reflect these operating segments. As additional
information the Group has also provided geographical information on its results.

The Executive Board considers the operations from a business perspective. In addition, information from a geographical perspective has also
been presented, which reflects the cluster basis on which the Company administers the operations of its business.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                         10
Operating segments
        Freight Management, which includes the provision of international air, ocean, ground, customs brokerage, deferred air and pickup
         and delivery, and other value-added services; and
        Contract Logistics, which includes the provision of inbound logistics, manufacturing support, outbound/distribution logistics and
         aftermarket logistics.

Additional geographical information
The Group is operating on a worldwide basis in the following geographical areas:
        Americas – comprising North America; Central America; and South America clusters;
        Asia Pacific – comprising South East Asia; Mekong; India sub-continent; Australia and New Zealand; Greater China; and North Asia
         clusters;
        Europe – comprising UK, Ireland and Nordics; Benelux; France; Germany; Central and Eastern Europe; Italy; Iberia; and BAMECA
         (includes the Balkans, the Middle East and Africa) clusters.

The Executive Board assesses the performance of the operating segments (including joint ventures) based on EBITDA before specific items and
SBC. Interest income and expenditure are not included in the result for each operating segment that is reviewed by the Executive Board. The
information provided to the Executive Board is measured in a manner consistent with that in the financial statements.

Operating segments
The segment results for the three months ended 30 June 2018 and 30 June 2017 are as follows:
                                                                                                              THREE MONTHS ENDED 30 JUNE
$ millions                                                                                                                          2018
                                                                                                Freight         Contract
                                                                                           Management           Logistics           Total

Total segment revenue                                                                              853              996             1,849
Inter-segment revenue                                                                                 -              (1)                (1)
Revenue from external customers                                                                    853              995             1,848

EBITDA before specific items and SBC                                                                27                39               66
Specific items and SBC                                                                                                                (30)
EBITDA                                                                                                                                 36
Depreciation, amortization and impairment                                                                                             (31)
Operating income                                                                                                                        5
Net finance income / (expense)                                                                                                        (46)
Net result from joint ventures                                                                                                          4
Profit/(Loss) before income taxes                                                                                                     (37)
EBITDA before specific items and SBC, as a % of revenue                                           3.2%              3.9%             3.6%

                                                                                                              THREE MONTHS ENDED 30 JUNE
$ millions                                                                                                                          2017
                                                                                                Freight         Contract
                                                                                           Management           Logistics           Total

Total segment revenue                                                                              789              933             1,722
Inter-segment revenue                                                                                 -              (1)                (1)
Revenue from external customers                                                                    789              932             1,721

EBITDA before specific items and SBC                                                                20                39               59
Specific items and SBC                                                                                                                  (3)
EBITDA                                                                                                                                 56
Depreciation, amortization and impairment                                                                                             (27)
Operating income                                                                                                                       29
Net finance income / (expense)                                                                                                        (80)
Net result from joint ventures                                                                                                           5
Profit/(Loss) before income taxes                                                                                                     (46)
EBITDA before specific items and SBC, as a % of revenue                                           2.5%              4.2%             3.4%

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                              11
The segment results for the six months ended 30 June 2018 and 30 June 2017 are as follows:
                                                                                                             SIX MONTHS ENDED 30 JUNE
$ millions                                                                                                                       2018
                                                                                               Freight       Contract
                                                                                          Management         Logistics           Total

Total segment revenue                                                                           1,656           1,983            3,639
Inter-segment revenue                                                                                -              (1)              (1)
Revenue from external customers                                                                 1,656           1,982            3,638

EBITDA before specific items and SBC                                                                42             77              119
Specific items and SBC                                                                                                              (37)
EBITDA                                                                                                                               82
Depreciation, amortization and impairment                                                                                           (67)
Operating income                                                                                                                     15
Net finance income / (expense)                                                                                                    (122)
Net result from joint ventures                                                                                                        9
Profit/(Loss) before income taxes                                                                                                   (98)
EBITDA before specific items and SBC, as a % of revenue                                          2.5%            3.9%             3.3%

                                                                                                             SIX MONTHS ENDED 30 JUNE
$ millions                                                                                                                       2017
                                                                                               Freight       Contract
                                                                                          Management         Logistics           Total

Total segment revenue                                                                           1,491           1,828            3,319
Inter-segment revenue                                                                                -              (2)              (2)
Revenue from external customers                                                                 1,491           1,826            3,317

EBITDA before specific items and SBC                                                                30             74              104
Specific items and SBC                                                                                                              (14)
EBITDA                                                                                                                               90
Depreciation, amortization and impairment                                                                                           (53)
Operating income                                                                                                                     37
Net finance income / (expense)                                                                                                    (133)
Net result from joint ventures                                                                                                        9
Profit/(Loss) before income taxes                                                                                                   (87)
EBITDA before specific items and SBC, as a % of revenue                                          2.0%            4.1%             3.1%

Geographical information
The geographical results for the three months ended 30 June 2018 and 30 June 2017 are as follows:
                                                                                                             THREE MONTHS ENDED 30 JUNE
$ millions                                                                                                                         2018
                                                                               Americas       Asia Pacific       Europe            Total

Total segment revenue                                                              616               467           765            1,848
Inter-segment revenue                                                               (1)                 -            1                 -
Revenue from external customers                                                    615               467           766            1,848

EBITDA before specific items and SBC                                                12                29            25               66
Specific items and SBC                                                                                                              (30)
EBITDA                                                                                                                               36
Depreciation, amortization and impairment                                                                                           (31)
Operating income                                                                                                                      5
Net finance income / (expense)                                                                                                      (46)
Net result from joint ventures                                                                                                        4
Profit/(Loss) before income taxes                                                                                                   (37)

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                           12
THREE MONTHS ENDED 30 JUNE
$ millions                                                                                                                                2017
                                                                                 Americas         Asia Pacific          Europe            Total

Total segment revenue                                                                 581                 449              693              1,723
Inter-segment revenue                                                                   (1)                  -              (1)                 (2)
Revenue from external customers                                                       580                 449              692              1,721

EBITDA before specific items and SBC                                                    17                 16                26                 59
Specific items and SBC                                                                                                                           (3)
EBITDA                                                                                                                                          56
Depreciation, amortization and impairment                                                                                                      (27)
Operating income                                                                                                                                29
Net finance income / (expense)                                                                                                                 (80)
Net result from joint ventures                                                                                                                    5
Profit/(Loss) before income taxes                                                                                                              (46)

The geographical results for the six months ended 30 June 2018 and 30 June 2017 are as follows:
                                                                                                                       SIX MONTHS ENDED 30 JUNE
$ millions                                                                                                                                 2018
                                                                                  Americas         Asia Pacific          Europe            Total

Total segment revenue                                                               1,201                 912            1,526              3,639
Inter-segment revenue                                                                   (1)                  -                -                 (1)
Revenue from external customers                                                     1,200                 912            1,526              3,638

EBITDA before specific items and SBC                                                    22                 50                47               119
Specific items and SBC                                                                                                                         (37)
EBITDA                                                                                                                                          82
Depreciation, amortization and impairment                                                                                                      (67)
Operating income                                                                                                                                15
Net finance income / (expense)                                                                                                               (122)
Net result from joint ventures                                                                                                                   9
Profit/(Loss) before income taxes                                                                                                              (98)

                                                                                                                       SIX MONTHS ENDED 30 JUNE
$ millions                                                                                                                                 2017
                                                                                 Americas         Asia Pacific           Europe            Total

Total segment revenue                                                               1,132                 848            1,339              3,319
Inter-segment revenue                                                                   (1)                  -               (1)                (2)
Revenue from external customers                                                     1,131                 848            1,338              3,317

EBITDA before specific items and SBC                                                    21                 34                49               104
Specific items and SBC                                                                                                                         (14)
EBITDA                                                                                                                                          90
Depreciation, amortization and impairment                                                                                                      (53)
Operating income                                                                                                                                37
Net finance income / (expense)                                                                                                               (133)
Net result from joint ventures                                                                                                                   9
Profit/(Loss) before income taxes                                                                                                              (87)

      7.     Specific Items and SBC

                                                                      THREE MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                                 30 JUNE            30 JUNE                JUNE                JUNE
$ millions                                                                          2018               2017               2018                2017

Personnel expenses                                                                    12                    9                16                  16
Other operating expenses                                                              18                  (6)                21                  (2)
Items affecting EBITDA                                                                30                    3                37                  14
Finance expenses                                                                      23                  12                 23                  12
Total (income)/expense before income taxes                                            53                  15                 60                  26
Tax expense                                                                           (3)                    -               (3)                   -
Total (income)/expense                                                                50                  15                 57                  26

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                     13
The following table provides a detailed split on the specific items and SBC:

                                                                              THREE MONTHS ENDED THREE MONTHS ENDED SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                                         30 JUNE            30 JUNE                JUNE                JUNE
$ millions                                                                                  2018               2017               2018                2017

Restructuring and transformation                                                                5                  9                  7                  15
Litigation and legacy tax                                                                     (1)                (9)                 (1)                 (7)
Other                                                                                            -                 1                   -                   1
Subtotal specific items excluding IPO                                                           4                  1                  6                    9
IPO related operating costs                                                                   18                    -                20                     -
Share based compensation (non-cash)                                                             8                  2                 11                    5
Items affecting EBITDA                                                                        30                   3                 37                  14
Finance expenses                                                                              23                 12                  23                  12
Total (income)/expense before income taxes                                                    53                 15                  60                  26
Tax expense                                                                                   (3)                   -                (3)                    -
Total (income)/expense                                                                        50                 15                  57                  26

Restructuring and transformation
For the three months ended 30 June 2018 restructuring and transformation costs arose predominantly in the Italian and North American
clusters as part of the ongoing cost reduction initiatives. For 2017, severance costs and provisions were incurred, mainly in the North
American, Benelux, Italian, German and UKIN clusters.

Litigation and legacy tax
Litigation and legacy tax includes settlement payments received in the North America cluster, offset by costs relating to the CIL litigation and
independent contractors litigation in California. For 2017, the Group received a settlement payment related to an anti-trust claim.

IPO related operating costs
IPO related operating costs includes certain legal, accountancy and other professional fees incurred for external advice in relation to the IPO.

Share based compensation
Non-cash share based compensation costs are recognized in a similar manner as specific items. These relate to the issuance of shares in CEVA
Holdings LLC (predecessor entity to CEVA Logistics AG following legal merger) and grant of equity awards to certain members of management
under the CEVA Holdings LLC 2013 Long-Term Incentive Plan in July 2016. Additionally, a one-time grant was awarded to certain members
of management as a result of the IPO in April 2018. These costs are included within personnel expenses.

Finance expenses
Finance expenses include the accelerated write-off of capitalized debt issuance costs (US$8 million), as well as breakage fees (US$13 million)
relating to the debt that has been repaid and cancelled, and other finance costs relating to refinancing transactions pre IPO.

      8.     Income Tax

For the first six months ended 30 June 2018 the effective tax rate is (14.3)% (first six months ended 30 June 2017: (17.2)%) and is based on
an entity by entity calculation of forecasted effective tax rates for the full year. The difference between the expected tax rate (the Group’s
overall expected tax rate is calculated as the weighted average tax rate based on earnings before tax of each subsidiary and can change on a
yearly basis) and the effective tax rate is mainly due to uncertainty regarding the future utilization of losses or temporary differences, for
which no deferred tax asset has been recognized.

      9.     Share Capital

                                                                                                               Number of common
                                                                                                                           shares           Nominal value

1 January 2018¹                                                                                                                 -
Issued share capital during the year                                                                                    41,361,537                 CHF 0.10
30 June 2018                                                                                                            41,361,537                 CHF 0.10

Authorised and issued share capital as per 30 June 2018                                                                 41,361,537                 CHF 0.10
¹ On 3 May 2018 CEVA Logistics merged with CEVA Holdings LLC and was the surviving parent Company of the Group. As a result of this capital reorganization
the share capital of CEVA Logistics AG has been reflected in the consolidated balance sheet as though the Company had always been the parent of the Group.
See Note 2 for further details.

On 21 February 2018, the Company was incorporated with 1,000,000 fully paid in registered shares with a nominal value of CHF 0.10 per
share issued at par value. On 10 April 2018, the Company issued 10,505,000 fully paid in registered shares with a nominal value of CHF 0.10
per share issued at par value.

The Company legally merged with CEVA Holdings LLC on 3 May 2018 with CEVA Logistics AG being the surviving entity.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                             14
On 8 May 2018, the Company successfully completed an IPO on the SIX Swiss Exchange and issued 29,856,537 new registered shares with a
nominal value of CHF 0.10 each for CHF 27.50 per share.

At the same time, CMA CGM made a strategic investment of CHF 379 million in convertible securities issued by CEVA in a concurrent private
placement. These securities, which have the same rights as shares, will convert to 13,779,826 registered shares once certain regulatory
approvals have been obtained or are mandatorily convertible into common shares (see Note 18 “Events after Balance Sheet Date”).

The proceeds from the IPO were primarily used to repay debt as disclosed in Note 11.

Each share has one vote. All shares have equal voting rights, and no preferential rights or similar entitlements exist.

        10. Earnings per share

Basic earnings per share is calculated by dividing the profit (loss) for the period attributable to shareholders of the Company by the weighted
average number of shares outstanding during the period. Diluted earnings per share is calculated by adjusting the weighted average number
of shares outstanding during the period for the diluting effect of our share based compensation plans.

The calculation (both basic and diluted EPS) as at 30 June 2018 includes the CMA CGM convertible security that is redeemable in shares as
this instrument is mandatorily convertible regardless of whether regulatory approval for CMA’s investment is given.

Adjusted earnings per share represents the basic / dilutive earnings per share excluding specific items and share based compensation
expenses.

Profit for the period

                                                                                                         THREE MONTHS ENDED THREE MONTHS ENDED
                                                                                                                    30 JUNE            30 JUNE
$ millions                                                                                                             2018               2017

    Profit/(Loss) before tax                                                                                                (37)                 (46)
    Income tax                                                                                                                (8)                  1
    Profit/(Loss) for the period                                                                                            (45)                 (45)
    Profit/(Loss) for the period attributable to noncontrolling interests                                                       -                   -
    Profit/(Loss) for the period attributable to shareholders of the Company                                                (45)                 (45)

                                                                                                         SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                                                                        JUNE                JUNE
$ millions                                                                                                             2018                2017

    Profit/(Loss) before tax                                                                                                (98)                  (87)
    Income tax                                                                                                              (14)                  (15)
    Profit/(Loss) for the period                                                                                          (112)                 (102)
    Profit/(Loss) for the period attributable to noncontrolling interests                                                      -                     -
    Profit/(Loss) for the period attributable to shareholders of the Company                                              (112)                 (102)

Weighted                                    average                            number                           of                            shares
                                                                                                         THREE MONTHS ENDED THREE MONTHS ENDED
                                                                                                                    30 JUNE            30 JUNE
Number of shares                                                                                                          2018 1               2017 2

Issued shares at April 1                                                                                             11,505,000          11,505,000
 Effect of issued shares during the period                                                                           18,909,140                    -
 Convertible securities to CMA CGM Group                                                                              8,727,224                    -
Shares for basic earnings per share for the period                                                                   39,141,364          11,505,000

 Effect of dilutive shares
  Share options                                                                                                        712,395                      -
 Shares for diluted earnings per share for the period                                                              39,853,759             11,505,000
1 538,900 potentially dilutive share options have been excluded from the computation of the diluted average number of shares outstanding as they would

have an anti-dilutive effect

2325,750 potentially dilutive share options have been excluded from the computation of the diluted average number of shares outstanding as they would
have an anti-dilutive effect

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                        15
SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                                                                          JUNE                JUNE
Number of shares                                                                                                           2018 1                 2017 2

 Issued shares at January 1                                                                                           11,505,000             11,505,000
  Effect of issued shares during the period                                                                            9,454,570                       -
  Convertible securities to CMA CGM Group                                                                              4,363,612                       -
 Shares for basic and diluted earnings per share for the period                                                       25,323,182             11,505,000
1 538,900 potentially dilutive share options have been excluded from the computation of the diluted average number of shares outstanding as they would

have an anti-dilutive effect

2325,750 potentially dilutive share options have been excluded from the computation of the diluted average number of shares outstanding as they would
have an anti-dilutive effect

Earnings and adjusted earnings per share
                                                                                                                  THREE MONTHS           THREE MONTHS
                                                                                                                  ENDED 30 JUNE          ENDED 30 JUNE
In $                                                                                                                       2018                   2017

    Basic & Diluted                                                                                                        (1.15)                 (3.91)
    Basic - adjusted                                                                                                        0.13                  (2.61)
    Diluted - adjusted                                                                                                      0.13                  (2.61)

                                                                                                                    SIX MONTHS             SIX MONTHS
                                                                                                                  ENDED 30 JUNE          ENDED 30 JUNE
In $                                                                                                                       2018                   2017

    Basic & Diluted                                                                                                        (4.42)                 (8.87)
    Basic & Diluted - adjusted                                                                                             (2.17)                 (6.61)

Adjusted earnings
                                                                                                           THREE MONTHS ENDED THREE MONTHS ENDED
                                                                                                                      30 JUNE            30 JUNE
$ millions                                                                                                               2018               2017

    Profit/(Loss) for the period                                                                                             (45)                   (45)
    Specific items                                                                                                            53                     15
    Adjusted Income tax                                                                                                        (3)                     -
    Non-controlling interest                                                                                                     -                     -
    Adjusted profit/(loss) attributable to shareholders of the Company                                                          5                   (30)

                                                                                                           SIX MONTHS ENDED 30 SIX MONTHS ENDED 30
                                                                                                                          JUNE                JUNE
$ millions                                                                                                               2018                2017

    Profit/(Loss) for the period                                                                                            (112)                  (102)
    Specific items                                                                                                            60                     26
    Adjusted Income tax                                                                                                        (3)                     -
    Non-controlling interest                                                                                                     -                     -
    Adjusted profit/(loss) attributable to shareholders of the Company                                                       (55)                   (76)

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                           16
11. Borrowings

As at 30 June 2018 and 31 December 2017, the carrying amounts and fair value of borrowings were as follows:
                                                                                       30 JUNE                                                31 DECEMBER
$ millions                                                                                2018                                                        2017
                                       Carrying value   Level 1 fair   Level 2 fair   Total fair Carrying value   Level 1 fair   Level 2 fair     Total fair
                                                             value          value        value                         value          value          value

Non-current
Bank borrowings                                 973               -          990          990           1,165               -        1,138           1,138
Loan notes                                      423            443              -         443           1,008            995              -            995
Finance leases                                   26               -           26           26              24               -           24              24
Total non-current borrowings                  1,422            443         1,016        1,459           2,197            995         1,162           2,157

Current
Bank overdrafts                                  21               -            21          21             131               -          131             131
Loan Notes                                         -              -              -           -             39             39              -             39
Bank borrowings                                  11               -            11          11              13               -           13              13
Finance leases                                    5               -             5           5               4               -            4               4
Total current borrowings                         37               -            37          37             187             39           148             187

Total borrowings                              1,459            443         1,053        1,496           2,384         1,034          1,310           2,344

Unamortized debt issuance costs                  25                                                        38

Total principal debt                          1,484                                                     2,422

The fair value of the loan notes has been presented using the available market price (Level 1) at the balance sheet date. The bank borrowings'
fair value has been presented using a valuation technique based on prices of recent over-the-counter transactions for these borrowings
(Level 2). The average floating interest rate for the six months ended 30 June 2018 was 3.9% (six months ended 30 June 2017: 3.6%) and
7.0% (three months ended 30 June 2017: 6.1%) for Euro and for US dollar denominated loans respectively.

As at 30 June 2018 the weighted average period to maturity was 2.3 years.

April 2017 Exchange offer and March 2018 Tack-on bond

On 7 April 2017, CEVA successfully completed an exchange offer for the 4% First Lien Senior Secured Notes due 2018, where US$351 million
of the notes were exchanged for CEVA’s new 9.00% First Lien Senior Secured Notes due 2020 (the “New 9% Notes”). After the exchange
approximately US$39 million principal amount of 4% First Lien Senior Secured Notes were outstanding. In addition, CEVA entered into
agreements with certain holders to exchange US$16 million of 12.75% Senior Notes for New 9% Notes. After the exchange approximately
US$26.5 million principal amount 12.75% Senior Notes were outstanding.

The New 9% Notes will pay 6% cash and 3% PIK (payment-in-kind) interest per annum.

On 19 March 2018, CEVA successfully completed its offering of US$50 million, in aggregate principal amount of the New 9% Notes, in a
private offering. The new notes were issued as additional notes under an indenture, dated as of 7 April 2017. Proceeds from the issuance of
the tack-on bond were used to repay the outstanding US$39 million aggregate principal amount of its 4.0% Senior Notes on 1 May 2018 and
the balance was used for general corporate purposes.

May 2018 IPO
On 8 May 2018, CEVA Logistics AG successfully completed an initial public offering (IPO) on the SIX Swiss Exchange. The Company received
aggregate gross proceeds of CHF 1.2 billion (equivalent to US$1.2 billion) from the IPO and the private placement of the CMA CGM convertible
securities.
Since the closing of the IPO, the Company has used the net proceeds from the IPO to repay debt as follows:
     i.    To repay US$184 million of drawings under the Existing Term Loans outstanding, on 14 May 2018;
    ii.    To redeem in full the US$300 million principal amount of 7.0% First Lien Notes and US$325 million principal amount of 9.0% 1.5
           Lien Notes on 24 May 2018;
   iii.    To redeem in full the US$26 million principal amount of the 12.75% Senior Notes on 13 June 2018.

European Securitization due 2020
On 24 March 2016, the Company closed a €170 million (US$191 million) Pan-European Asset Backed Securitization (“the European
Securitization Facility”). The European Securitization Facility is a four year commitment (two year initially) from two banks and is based on
securitization of receivables from six European countries. As of 30 June 2018, the outstanding drawn amount under the facility was €150
million (US$175 million).

Australian Receivables Facility due 2020
On 22 May 2016, certain of the Company’s Australian subsidiaries of the Group renewed and extended CEVA’s A$40 million receivables
purchase facility. The renewal, among other things, extended the maturity of the facility to 30 April 2020 and amended certain economic
terms including facility margin. Additional amendments were made in 2017 which increased the facility limit to A$50 million. As of 30 June
2018, the outstanding drawn amount under the facility was A$41 million (US$30 million).
CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                             17
US ABL facility due 2020
On 19 November 2010, certain US subsidiaries of the Group (“the Originators”) and a new subsidiary, CEVA US Receivables, LLC (the
“Unrestricted Subsidiary”), entered into agreements establishing an Asset Backed Loan (ABL) Facility with an initial commitment amount of
US$200 million (the “ABL Facility”). On 30 November 2010, the committed amount of the ABL Facility was increased to US$250 million. The
ABL Facility was scheduled to mature on 31 December 2018, but was amended in November 2017 and now matures on 1 August 2020. The
commitment amount for the facility has been reduced to US$225 million. As at 30 June 2018, the outstanding drawn amount of the ABL
Facility was US$198 million.

Covenants
At the end of the quarter, if the outstanding amount under our US$250 million revolving credit facility exceeds 30% of the total facility, our
senior secured credit facilities require us to maintain a maximum ratio of secured first lien net debt to covenant EBITDA of 5.35 to 1.0,
calculated for the trailing four quarters (as determined under our senior secured credit facility agreement). As at 30 June 2018 there was no
debt outstanding under this facility.

The Group is in compliance with the covenants set forth in the documents governing its existing borrowings and believes that it has sufficient
liquidity to service its operating activities and continued growth ambitions for the foreseeable future.

The Company has launched its refinancing during the third quarter (see Note 18 “Events after Balance Sheet Date”).

     12. Asset held for sale

The asset held for sale of US$4 million is related to the sale of a warehouse in the Benelux cluster.

The asset classified as held for sale is presented below:

                                                                                                           AS AT 30 JUNE            AS AT 30 JUNE
$ millions                                                                                                          2018                     2017

Assets held for sale
Property, plant and equipment                                                                                         4                          -
Total non-current assets                                                                                              4                          -

TOTAL ASSETS                                                                                                          4                          -

     13. Joint ventures

The Group has an investment totaling US$104 million as at 30 June 2018 (31 December 2017: US$98 million), being a 50% interest in ANJI-
CEVA Logistics Co. Ltd (“Anji-CEVA”) with its registered address at No. 258 Miquan Road, Anting Town, Jiading District, Shanghai City, P.R. of
China. Anji-CEVA principally engages in contract logistics activities, including warehousing, distribution, transportation, domestic freight,
technical consulting and training. For the three months ended 30 June 2018, CEVA’s share in Anji-CEVA’s net result was US$4 million (three
months ended 30 June 2017: US$4 million). For the six months ended 30 June 2018, CEVA’s share was US$9 million (six months ended 30
June 2017: US$9 million).

The consolidated balance sheet of Anji-CEVA as at 30 June 2018, 31 December 2017 and 30 June 2017 is as follows:

                                                                                               AS AT 30 JUNE AS AT 31 DECEMBER       AS AT 30 JUNE
$ millions                                                                                              2018              2017                2017

Current
Cash and cash equivalents                                                                               166                144               166
Other current assets                                                                                    676                410               432
Total current assets                                                                                    842                554               598

Financial liablities                                                                                      (11)                (7)               (3)
Other current liabilities                                                                               (787)              (532)             (580)
Total current liabilities                                                                               (798)              (539)             (583)

Non-current
Assets                                                                                                  168                170               150
Total non-current assets                                                                                168                170               150

Other liabilities                                                                                         (3)                  -                 -
Total non-current liabilities                                                                             (3)                  -                 -

NET ASSETS                                                                                              209                185               165

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                    18
The consolidated income statement of Anji-CEVA for the three and six months ended 30 June 2018 and 2017 is as follows:

                                                                                         THREE MONTHS ENDED 30 JUNE            SIX MONTHS ENDED 30 JUNE
$ millions                                                                                  2018               2017             2018               2017

Revenue                                                                                      387               293              733                538
Operating expenses excluding depreciation, amortization and impairment                      (365)             (272)            (686)              (498)
EBITDA                                                                                        22                21               47                 40

Depreciation,amortization and impairment                                                      (7)               (6)              (14)              (10)
Operating income                                                                              15                15                33                30

Net finance income/(expense) (including foreign exchange movements)                            1                 -                1                  -

Profit/(Loss) before income taxes                                                             16                15               34                 30

Income tax (expense) / Income                                                                 (6)               (4)              (11)               (8)
Profit/(Loss) for the period                                                                  10                11                23                22

Attributable to:
Non-controlling interests                                                                      3                 2                6                  4
Equity holders of the Company                                                                  7                 9               18                 18

The reconciliation from the net asset value to the carrying value of the joint ventures for the period ending 30 June 2018 and 2017 is as
follows:

$ millions                                                                                                            2018                       2017

Opening net assets - 1 January                                                                                         185                       149
Allocated to non-controlling interest                                                                                  (41)                      (35)
Adjusted opening net assets - 1 January                                                                                144                       114
Profit for the period                                                                                                   23                        22
Non-controlling interest                                                                                                 (6)                      (4)
Foreign exchange impact                                                                                                  (6)                        -
Closing net assets - 30 June                                                                                           155                       132
Interest in joint ventures at 50%                                                                                       78                        66
Goodwill in joint ventures                                                                                              26                        25
Carrying value 30 June                                                                                                 104                        91

The Company had no contingent liabilities towards the joint venture as at 30 June 2018 (31 December 2017: nil). There are no significant
restrictions on the ability of joint ventures to transfer funds to the Company in the form of cash dividends, or to repay loans or advances
made by the Company.

As part of the agreement in 2017 to renew the Anji-CEVA joint venture agreement it was agreed in principle that the joint venture parties,
CEVA and Anji Automotive Logistics Company Limited (Anji Logistics) (a subsidiary of Shanghai Automotive Industry Sales Corporation, or
SAIC), will be entitled to certain annual adjustment payments prior to or subsequent to the net profits distribution depending on certain
contributions made by the parties to the joint venture. During the quarter a formal agreement to this effect was entered into under which
JV pays a fee that is based on the difference between the ratio in joint venture revenue stemming from the SAIC-group versus non-SAIC-
group companies. This will be an operating expense and affect EBITDA; the economic consequences for CEVA are the same as if the
adjustment had been done subsequent to net profit distribution. For 2018 the JV will pay an annual adjustment payment to Anji-Logistics,
however, as the share of non-SAIC group revenues is expected to increase, the impact on CEVA is expected to reduce accordingly. As a result
of a strategic review that may occur in 2021 depending on the level of non-SAIC revenue achieved in 2020, the parties may amend the joint
venture agreement, including the profit sharing provisions, purpose of the joint venture and business transfers, or the parties may sell a
portion of their interests in the joint venture or the Anji-CEVA joint venture in its entirety. The agreement will have no impact on the dividend
CEVA will receive in 2018.

      14. Commitments

Operating lease commitments
The Group leases various offices and warehouses under non-cancellable operating lease agreements. The lease terms are generally between
one and six years and the majority of lease agreements are renewable at the end of the lease period at market rates.

The Group also leases various motor vehicles, office and computer equipment under operating lease agreements.

During the three months ended 30 June 2018, US$88 million was recognized as an expense in the income statement in respect of operating
lease rentals (three months ended 30 June 2017: US$83 million). For the six months ended 30 June 2018, US$178 million was recognized as
an expense (six months ended 30 June 2017: US$164 million).

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                        19
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
                                                                                                         AS AT 30 JUNE     AS AT 31 DECEMBER
$ millions                                                                                                        2018                  2017

Less than 1 year                                                                                                   332                     340
1-5 years                                                                                                          656                     688
Thereafter                                                                                                         146                     180
Total                                                                                                            1,134                   1,208
Of which guaranteed by third party / customers                                                                      78                     129

Of the future lease payments, US$747 million (31 December 2017: US$759 million) relates to commitments in relation to multi-user/shared
facilities, while the remainder of US$387 million (31 December 2017: US$449 million) is dedicated to specific customers/facilities.

Guarantees
In the normal course of our business, we provide bank guarantees or letters of credit to various customs authorities, landlords, suppliers and
insurance underwriters. The principal sources of the bank guarantees or letters of credit are CEVA's US$230 million synthetic letter of credit
facility (US$275 million previously) or the US$250 million revolving credit facility.

As at 30 June 2018, US$206 million (30 June 2017: US$269 million) of letters of credit and guarantees were issued, but undrawn, under the
synthetic letter of credit facility of US$230 million. At the same date, no letters of credit were issued under the US$250 million revolving
credit facility (30 June 2017: US$0 million).

The committed Senior Secured Facilities are secured by substantially all of the assets of CEVA Group Plc and the assets of its restricted
subsidiaries excluding certain trade accounts receivables that are transferred to special purpose entities formed in connection with the US
ABL Facility, the European Securitization Facility and the Australian Receivables Facility. The amount of the Euro denominated facilities has
been converted to US dollar for the above presentation based upon the 30 June 2018 closing rate of 1.1683.

As at 30 June 2018, the Group has issued guarantees on behalf of its subsidiaries in the ordinary course of business in connection with lease
agreements, customs duty deferment and local credit lines amounting to US$267 million (30 June 2017: US$327 million), of which US$206
million (2017: US$269 million) was issued but undrawn under CEVA’s synthetic letter of credit facility. The obligations under the guarantees
issued by banks and other financial institutions have been secured by CEVA and certain of its subsidiaries.

     15. Contingencies

Litigation and Legal Proceedings
The Company is involved in several legal proceedings relating to the normal conduct of CEVA’s business. While the outcome of these legal
proceedings is uncertain, the Company believes that it has provided for all probable and estimable liabilities arising from the normal course
of business, and CEVA therefore does not expect any un-provisioned liability arising from any of these legal proceedings to have a material
impact on CEVA’s results of operations, liquidity, capital resources or financial position.

Independent Contractor-Related Proceedings
The classification of drivers as independent contractors, which CEVA believes to be a common practice in its industry in the U.S., is challenged
from time to time by federal and state governmental and regulatory authorities, including tax authorities, as well as by individual drivers who
seek to have drivers reclassified as employees. We have previously been subject to claims relating to the classification of independent
contractor owner-operators. In 2009, the California Employment Development Department (“EDD”), based on a worker classification audit,
determined that certain individuals should be reclassified as employees for purposes of state unemployment tax, employment training tax,
disability insurance contributions, and personal income tax, and the EDD issued a tax assessment. CEVA has petitioned the EDD to review its
assessment, with a potential for abating a majority of the assessed taxes.

While CEVA cannot provide assurances with respect to the outcome of this matter and it is possible that CEVA could incur a material loss,
CEVA intends to vigorously defend itself. In connection with this, the Company has accounted for a provision in its accounts.

CIL Related Proceedings
CIL Limited (formerly CEVA Investments Limited), the former parent of CEVA Group Plc, is involved in a consensually filed liquidation
proceeding in the Cayman Islands and an involuntary Chapter 7 proceeding in the Bankruptcy Court for the Southern District of New York.
The Trustee in the Chapter 7 proceeding filed a claim against CIL Limited’s former directors, CEVA Group Plc, and affiliated entities relating
mostly to CEVA’s recapitalization in 2013. In 2015 the defendants filed motions to dismiss certain of the claims asserted by the Trustee, and
in January 2018, the Bankruptcy Court issued an order granting in part and denying in part the defendants’ motions. The Trustee
subsequently filed an amended complaint on 9 July 2018. Prior to this, the defendants filed motions for summary judgment which are
currently being briefed. The Company cannot provide assurances regarding the outcome of this matter and it is possible that if the Trustee
were to prevail on his claims, the Company could incur a material loss in connection with this matter, including the payment of substantial
damages and/or the unwinding of the recapitalization in 2013. However, the Company believes the claims are without merit and intends to
vigorously defend itself.

CEVA Logistics AG – Quarter Two 2018 Interim Financial Statements                                                                   20
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