Neovia Logistics L.P.

Overview Key strengths Key risks Global footprint with some longstanding customer relationships. Multiple debt facilities maturing in 2025. Progress made on new customer wins and contract repricing. Limited free operating cash flow generation in 2024. Customer concentration with a sizable contract winding down into 2025. Large paid-in-kind dividend on preferred equity that can be replaced with debt in the future. Repricing will support better revenue, EBITDA, and free operating cash flow (FOCF) as Neovia works offboards its Jaguar Land Rover UK (JLR UK) contract. The JLR UK contract was responsible for nearly 13% of 2023 revenues and winding it down has extended beyond our previous assumption (end of 2023). The JLR business is taking longer than expected to onboard with

...Neovia has repriced customer contracts that were uneconomical and led to losses. Repricing will support better revenue, EBITDA, and free operating cash flow (FOCF) as Neovia works offboards its Jaguar Land Rover UK (JLR UK) contract. The JLR UK contract was responsible for nearly 13% of 2023 revenues and winding it down has extended beyond our previous assumption (end of 2023). The JLR business is taking longer than expected to onboard with the new vendor, and some related work remains with Neovia. Despite the longer tail to the wind down, we expect this will be completed by the end of 2024 barring further disruption. We now expect revenue to decline 8%-9% in 2024 (previous forecast was a decline of 12%-14%). This is due to the partial wind down of the JLR UK contract (around 6% of forecasted 2024 revenue) and reduced scope on previous contracts, somewhat offset by contract wins and more favorable terms on existing contracts. We expect revenue to continue declining 0.5%-1.5% in 2025 as...

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