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ALLCARGO GLOBAL LOGISTICS LTD
CORPORATE PRESENTATION
Disclaimers
This presentation has been prepared by Allcargo Global Logistics Ltd (“the Company”) solely for providing information about the Company. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. None of the Company nor any of its respective affiliates, advisers or representatives, including the Managers and their affiliates, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
This communication is for general information purposes only, without regard to specific objectives, financial situations and needs of any particular person. Please note that investments in securities are subject to risks including loss of principal amount. The Managers and their affiliates do not accept any liability whatsoever, direct or indirect, that may arise from the use of the information herein. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Securities of the Company have not been registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any US state, nor is such registration contemplated. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes.”
Flow of the Presentation
1. Profile of Allcargo
2. Business Overview
3. Break up of Revenues
4. Profit Mix
5. CFS/ICD Business
6. MTO & Project Business
7. Equipment Business
8. Warehousing Business
9. Customer Profile
10. Capex
11. Industry Scenario
12. Financial Highlights
13. Recent Developments
14. Shareholding Pattern
15. Acquisitions
16. Investment Highlights
Profile of Allcargo
• India’s first multinational company in the logistics sector and largest LCL consolidator and MTO in India
• Has presence in logistics business for the last 15 years
• Promoted by Mr. Shashi Kiran Shetty and managed by experienced professionals in the industry
• AGL has pan India presence with 16 branches and 2 franchises along with regional offices in all metros and international network covering 5000 destinations
• Presently focusing on domestic cargo movements, higher capacity utilisation, CFS and equipment business.
Business Overview
• Allcargo is present in CFS, MTO, Equipment and Warehousing business across all categories
• Adopted inorganic route to build its MTO globally business by acquiring ECU Line , world’s second largest LCL Consolidator, AGL has around 139 own offices in 59 countries and 198 agents and franchisees across the globe
• AGL enjoys excellent relationships with freight forwarders and major shipping lines
• It has leveraged relationships by entering into CFS business
• Allcargo is the only MTO player, which is also into CFS Business
• AGL has strengthened its position in air freight business by
acquiring Hindustan Cargo Ltd. from Thomas Cook India Ltd.
• AGL intends to achieve economies of scale in air as well as sea
freight due to multiple offices of AGL and Hindustan Cargo
Ltd.
Business Overview
Revenue Mix
MTO67%
Equipment Hire7%
CFS26%
CFS6%
MTO92%
Equipment Hire2%
Standalone Consolidated
Revenue/EBITDA Mix (Consolidated)
2%6%
92%Revenue Break-up
8%Equipments31%CFS61%MTO
EBIDTA Break-up
Segmental Review
CFS/ICD Business
• Allcargo is amongst the top 3 CFS operators around JNPT, India’s largest container port.
• JNPT CFS is ~ 18 kms from the port and has a capacity of 144,000 TEUs p.a
• Total CFS capacity as on today stands at 270,000 TEUs
• Allcargo has commenced CFS operations at Chennai & Mundra ports in May 2007
• Pithampur ICD is operational from Feb 2009 with Annual Capacity of 36000 TEUs.
• JNPT CFS revenue is driven primarily by imports ( 95%), hence
shipping lines are the main customers in this business.
• AGL’s has an 8% market share at all its 3 CFSs, namely JNPT,
Chennai and Mundra.
• AGL enjoys highest CFS realisations at JNPT port.
CFS/ICD Business
CFS & ICD Locations -Current & Proposed
Current CFSs
ICD, with road bridgingProposed, with rail siding
Chennai (commenced May 2007)Current Capacity: 84,000 TEUTotal Area: 25 acresDeveloped Area: 25 acres
Mumbai (commenced April 2003)Current Capacity: 144,000 TEU
Total Area: 21 acresDeveloped Area: 21 acres
Mundra (commenced May 2007)Current Capacity: 50,000 TEUTotal Area: 16 acresDeveloped Area: 9 acres
PithampurTotal Area: 14 acres
Dadri
MTO Business
• Allcargo offers– LCL consolidation– FCL forwarding– Multi City Consolidation– Project Cargo Handling
• Primary customers are– Custom House Agents (CHA)– Freight Forwarders (FF)– Direct clients
MTO Business
• Allcargo has an extensive pan-India network with presence across 18 locations in India and 5000 destinations world wide.
• Strong relationships with shipping lines allows Allcargo to bookspace at competitive rates
• Allcargo has built on its dominant Indian presence by acquiring ECU NV, the second largest NVOCC in the world
• Company also has an expertise in handling hazardous cargo.
MTO Locations
Tuticorin
CHENNAI
Cochin
Goa
MUMBAI
Bangalore
Pune
Nagpur
Indore
Ahemedabad
Baroda
Jaipur
Ludhiana
DELHIMoradabad
Kanpur
Kathmandu
Hyderabad Vizag
Kolkatta
CoimbatoreKarur
SalemTiruppur
FranchiseeBranch OfficeRegional Office
Project Cargo
• Allcargo has been in the project cargo handling business since 2004• Services include transportation of high value specialized equipment
like oil field equipments, power plants, compressor stations & other over-dimensional cargo that cannot be containerized on a turnkey basis
• It is a niche activity that involves packaging and transportation of cargo from factory to project site through multiple modes (road, sea, rail) including customs clearance, project registration, route survey etc.
• Each contract in this segment is unique in terms of nature, size and value of the items and therefore the logistics requirements have to be customized to suit specific customer requirements.
• Detailed, intricate planning & technical expertise is required to successfully execute the transportation of such equipments
• Allcargo has successfully executed multiple projects for clients such as BHEL, British Gas, Power Machines, Weatherford, Air Liquide, Jindal, Dalmia, TVS Motors etc.
• Allcargo’s project cargo business is highly synergistic with its ISS solutions; the ISS business has the necessary asset portfolio (trucks, special trailers etc) and manpower to successfully execute such projects.
• Infrastructure led growth, especially in sectors such as oil & gas, steel, cement and power is expected to increase the demand for such specialized transport solutions
Project Cargo
• Allcargo has the experience of having successfully delivered on projects such as transportation of a transmission module (60’x120’x42’) for a oil & gas firm from USA to India, transportation of stator module (32’ x 15’ x 17’) from Haldia to Barhby waterways and road.
• AGL is presently handling 15 major projects
• The current order book is in the tune of Rs. 80 crs.
Project Cargo
Equipment Business
• Owns cranes ranging from 25 to 650 tons in capacity that are used in industrial manufacturing and infrastructure sectors such as power, oil and gas refineries, wind energy, steel, cement etc.
• Owns multiple crane types like all terrain cranes, crawler cranes, telescopic cranes and lattice boom cranes from well known manufacturers such as Manitowoc, Kobelco, Liebherr, Demag etc.
• Owns forklifts of capacities between 3 to 32 tons with mast heights of up to 5 meters; both diesel and battery operated forklifts are available.
• Owns reach stackers of 40 – 45 tons capacity that can travel at speeds of up to 25 kmph.
• Stackers can stack up to 5 containers one on top of the other
• Owns a large fleet of trucks (Ashok Leyland, Tata Motors ,Volvo)and trailers (20 feet, 40 feet and high cube)
• Owns Volvo & Man pullers and special trailers like semi-low bed, low bed, long and multi-axle (including the Goldhofer make), special multi-axle trailers to transport over dimension and over weight cargo
• Presently operating 54 Cranes, 49 Forklifts, 20 Reach Stakers and 353 trailers
Equipment Business
Equipment Business
Equipment Numbers
Cranes 54
Forklifts 49
Reach stackers 20
Trailers 353 5Above 300
2201-300
19101-200
280-100
Crane Tonnage
6Others
35Telescopic
13Crawler
Crane Types
Crane Deployment
10%Infrastructure
8%Cement
5%CFS
21%Windmills
56%Oil & Gas
% of CranesSector
4%North Region
24%South Region
6%East Region
65%West Region
Geographical Spread
•Asset Turnover for Equipment Division is 0.45 times
•EBITDA Margins are @ 65%
Major Assignments under Equipment Business
• Signed a long term contract with L&T Ship Building Division.
• Secured Business from Hyundai Corporation.
• Transportation and Custom clearance business for Jindal Steel from their production plants at Tarapur and Vasind.
• Secured business from Samsung Alphine for Delhi Metro Rail Project.
• Secured business from Sumitomo Corporation and Helix USA for base management.
Warehousing Business
• Warehouse infrastructure currently available in India is inadequate and needs massive upgradation.
• Allcargo is setting up its own warehouse infrastructure on a pan-India basis.
• Initially, these warehouses have been planned at Bhiwandi (Mumbai), Goa, Pithampur (Indore) and Hosur.
• The network would be expanded to– Nagpur
– Hyderabad
• The planned capacities for the locations are:– Bhiwandi – 45,000 sq. ft
– Goa – 100,000 sq. ft
– Pithampur – 90,000 sq. ft
– Hosur – 100,000 sq. ft
• AllCargo currently operates three warehouses in its current operational CFSs at Mumbai, Chennai and Mundra
• The fourth ICD warehouse at Pithampur will be operational with the commencement of the CFS operation; from Oct’ 08
• The existing CFS warehouses cater to Exports, Import LCL and Bonded Cargo
• The available space at these warehouses is:– Mumbai – 155,000 sq ft– Chennai – 158,000 sq ft– Mundra – 65,000 sq ft– Pithampur – 32,000 sq ft
Warehousing Business
• ECU operates warehouses in four locations at Antwerp, Barcelona,Dubai and Rotterdam
• Through these facilities we provide value added services like re-packaging, kitting and much more
• The facilities are geared to handle cargo of all kinds, including Hazardous Cargo.
• The available space at these warehouses is:– Antwerp – 300,000 sq ft– Barcelona – 40,000 sq ft– Dubai – 200,000 sq ft– Rotterdam – 64,000 sq ft
Warehousing Business
Warehousing Business
Nagpur
Mumbai-Bhiwandi
Hyderabad
Pithampur
Hosur
Goa
Customer Profile
• CFS Business– CSAV, WanHai, RCL, MOL, UASC
• MTO Business– Velji Dosabhai and Sons Private Limited, Jeena & Co, Schenker India
Pvt Ltd., Kuehne & Nagel (I) Pvt. Ltd, Panalpina World Transport (I) Pvt Ltd
• Equipment Business– Reliance, Rallis India, Suzlon, Enercon, Mahindra and Mahindra, B G
India, Ircon and Transoceanic
• Project Cargo– BHEL, British Gas, Power Machines, Weatherford, Air Liquide, Jindal,
Dalmia, TVS Motors etc.
Capex
• With intent to have a pan-India presence and provide effective end-to-end logistics solution, the company proposes to set up CFS/ICD in five locations. For this purpose, AGL proposes to spend Rs 3 bn, out of which, Rs. 1.6 bn has already been employed in the previous 12-18 mths and the balance will be utilised in the next 12-18 mths.
• Capex of Rs. 1bn for the procurement of cranes of different capacities has been fully utilized in 2008
• The expected capex for setting up pan-India warehousing network is estimated at Rs. 250 mn
Funding for Capex
The funding for the planned Capital investment is a combination of Debt, Equity and Internal Accruals.
An amount of € 21.75 Mn has been raised by placement of Warrants and issue of Equity to Blackstone Group.
A Debt of € 16.70 Mn has been raised with Axis Bank at favorable terms and rate to part fund the expansions.
Rest of the funding will be through Internal Accurals.
Industry Scenario
• The Indian Government has set a target of achieving US$200 bn in exports for FY2009E (vs. US$155 mn achieved in FY2008).
• Indian Logistics Industry is set to grow at 11% CAGR till 2013.
• With 13% of GDP being spent on logistics, India is one of the most inefficient.
• Recent regulatory initiatives would encourage higher share with 3PL(Phase out of CST, Rail haulage opened to pvt. Players, Leasing of wagons).
• Container traffic is expected to show the highest growth rate amongst all cargo traffic.
Industry Scenario
• Indian MTO market is fragmented and largely dominated by unorganised players, is valued at Rs.110 billion.
• The size of CFS/ICD industry is approximately Rs. 65 billion and is expected to grow significantly, driven by increased containerization and EXIM Trade.
• Project cargo market is estimated to be around Rs. 12 billion, and is expected to grow at 20% in the next 5 years.
• In Equipment business, cumulative crane rental demand is estimated between Rs. 20-30 billion in the next 5 years.
• The Warehousing industry is currently valued at Rs. 30 billion and is estimated to grow by 20% in the coming 5 years.
Financial Highlights (Consolidated)
(Rs. Mn)
**FY2006 figures represent 9 months figures
*Figures pertain to the year ended March 31, '06
49.3842.6530.6527.22EPS
1219.95863.93620.92494.81PAT
357.32238.66174.9747.2Tax
1577.271,097.26716.8542.01Profit Before Tax
248.54123.4752.5523.17Interest
447.22252.2878.7862.43Depreciation
2,273.031,473.01848.13627.61EBITDA
20,942.7614,713.118,155.802,129.35Total Expenditure
23,215.7916,186.129,003.932,756.96Net Sales
FY2008FY 2007**FY 2006*FY 2005-06Particulars
Revenue and EBIDTA Growth
2,757
9,004
16,186
23,216
628
848
1,473
2,273
0 5,000 10,000 15,000 20,000 25,000
*FY 2005-06
**FY 2006
FY 2007
FY2008
EBITDA
Net Sales
In Rs. Mn
*- Figures pertain to the year ended March 31, '06
**-FY2006 figures represent 9 months figures
Quarterly Performance (Consolidated)
Rs. Mn
1,418.92 1,770.48 2,391.15 7,718.96
22,560.99 CY 2008*
276.30PAT427.50PBT597.14EBDITA
1,864.61Gross Margin4,846.64Total Income
Q1 2009
* Provisional
Volume Performance
20949,821376719,734Total
10744,99719748,998LCL
10204,824179310,736FCL
Q1 2009CY 2008Q1 2009CY 2008
ImportExportin TEU
MTO Volume
17709107,5701625282,939Total
1258470,6191281760,952LCL
512536,951343521,987FCL
Q1 2009CY 2008Q1 2009CY 2008
ImportExportin TEU
ECU Volume
419410633250881242840379125381Total
634805123359276528156118557Imports
3560258217299663122236824Exports
MundraChennaiJNPTMundraChennaiJNPT
Q1 2009CY 2008in TEU
CFS Volume
PAT Growth
PAT (in Mn)
494.81620.92
863.93
1,219.95
0.00200.00400.00600.00800.00
1,000.001,200.001,400.00
*FY 2005-06 **FY 2006 FY 2007 FY2008
PAT (in Mn)25%
Growth
39% Growth
*- Figures pertain to the year ended March 31, '06
**-FY2006 figures represent 9 months figures
41% Growth
Balance Sheet Data
223.89
4,721.65
4,436.85
1,201.94
631.32
1,262.52
FY 2007
223.93
6113.43
5642.08
2598.70
1011.97
3439.64
FY 2008
202.86182.07Share Capital
3,947.731,605.51Networth
2,737.67364.45Net Block
1,101.65565.65Working Capital
450.30412.37Cash/Bank
775.84225.32Total Debt
*FY 2006**FY 2005-06Particulars
Rs. Mn
*-FY2006 figures represent 9 months figures
**- Figures pertain to the year ended March 31, '06
Recent Developments
• Equipment hiring division of Transindia Freight Services Pvt. Ltd merged with AllCargo w.e.f. 01st January, 2007
• Allcargo signed JV with Container corporation of India for establishment of ICD at Dadri, Allcargo holds 51% of JV company
• ICD at Pithampur ( Indore) has been functional in March2009
Pre & Post Conversion Shareholding pattern
100.00Total4.30Others0.07Mutual Funds
3.85NRIs/ OCBs/ Foreign - Nationals
7.27Foreign Institutional Investors
3.00Corporate Bodies81.51Promoter group
% of SharesCategory
100.00Total10.39Blackstone
6.42Foreign Holding
7.45Non-Institutional Holding
2.79Institutional Holding
72.95Promoter group
% of SharesCategory
Acquisitions
ECU Line
• Allcargo acquired 100% shareholding of ECU in an all cash deal for € 22.8 Mn in June 2006
• The ECU acquisition makes Allcargo the second largest NVOCC player in the world with 120 offices in 60 countries and a network of agents across 120 countries
• It contributes 77% to the consolidated revenues in CY07
• It also operates one trans-shipment hub in each continent (Antwerp, Singapore, Santos, Milan and Dubai) plus 120 direct export / import hubs in five continents
• EBITDA margin of ~ 4 – 5 % and net margin of ~ 2 – 2.5% which is much lower than that of Allcargo.
• Total employees strength is at 1638 with operations spread in 88locations in 50 countries.
• Global Neutral NVOCC, which runs annual volume of 180,000+ TEUs
ECU Line
Geographical SpreadECU Line
Post Acquisition Initiatives at ECU
• Retained existing management and employees of the company
• Setup a strong team of Board of Directors & Executive Committee, to streamline decision making and for efficient delegation of authority.
• Tie-up with Econocaribe, US based NVOCC: Earlier, ECU had a tie-up with OTS logistics for trade in the US – EU corridor only. With this tie up, ECU network got an opportunity to have an exclusive agent for their network worldwide into the USA.
• WNS tie-up to standardizing and outsource business processes, with an objective to increase efficiency and cost rationalization for the consolidated entity.
• Setup a global freight buying office at Singapore.
• Setup a strong Legal, Financial, IT and MIS support for ECU international operations
• Expected to increase existing net margins from ~ 2-2.5% to 4.5-5% in next 3 years.
Post Acquisition Initiatives at ECU
Hindustan Cargo Ltd.
• Acquired airfreight company from Thomas Cook to develop synergies and add value to ECU Air operations.
• IATA accredited
• 13 operational locations in India covering metros and Class A cities
• Holds MTD and Break bulk License
• Own Custom House Agent License at all locations
• Project specialist for large size ODC , Plant movements and shipchartering.
Quarterly Performance of Hindustan Cargo Ltd.
(Rs in Mn)
26.79 44.04 57.56
176.55 1,405.11
CY 2008*
8.44PAT13.75PBT16.60EBDITA46.70Gross Margin
235.44Total Income
Q1 2009
* Provisional
Blackstone Investment
• Blackstone invested 243 crore for 10.38% stake in the company• Issued 1,081,081 6% Fully and Compulsorily Convertible Debentures
(FCCD) of Rs.10/- each convertible into 1,081,081 equity shares of Rs.10 each ,at a price of Rs.934/- per FCCD
• Issue of 1,513,514 Warrants of Rs.10/- each convertible into 1,513,514 equity shares of Rs.10/- each , at a price ranging between Rs.934 to Rs.1,284 per Warrant. On subscription of Warrant, Investors will pay Rs.194/- per Warrant
• Issue of 1,000 equity shares of Rs.10/- each fully paid up of the Company at a price of Rs.934/- per share.
1284>2100
12092000-2100
11091900-2000
934Upto1900
Conversion Price/ShareEBDITA CY2008 ( Rs Mn)
Growth Drivers
• Investing more into CFS, equipment and warehousing business
• Financial restructuring of ECU Line and consolidated freight buying for both AGL and ECU Line will increase margins in MTO business from 2-2.5% to 4.5-5% in the next 2 years
• Stay focussed in MTO Business with increasing pie of CFS and Equipment business contributing to profitability of the company
• Integrating ECU Line business with the company
• Pursue organic and inorganic opportunities, both in domestic & international markets to provide impetus to our Logistical Journey.
Thank You