GLS Group – Company presentation
June 2016, Neuenstein
GLS | Company Overview, June 2016
Disclaimer
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“This presentation is being provided for informational purposes
only and is not intended to, nor does it, constitute investment
advice or any solicitation to buy, hold or sell securities or other
financial instruments.
None of Royal Mail, its affiliates or their respective directors,
officers and employees shall accept any liability whatsoever for
the consequences of any reliance upon or actions taken based
on any of the information in this presentation.”
GLS | Company Overview, June 2016
In what kind of market does GLS operate?
GLS operates in an attractive but challenging growth market
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?
GLS | Company Overview, June 2016
GLS is a logistics provider mainly serving the CEP market segment
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Market Definition
The broadest description for the industrial sector in which GLS operates is ‘Industrial Transportation’. This sector can be further segmented into Logistics
Logistics include the following segments:
o CEP (Courier, Express and Parcels)
o Letter
o Freight
o Storage/ Warehousing
GLS is mainly active in the CEP market segment
GLS | Company Overview, June 2016
Much of the growth in the European parcels sector has been driven by B2C deliveries
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European Parcel Market*, Split by Segment (B2B, B2C, C2X)**, Revenue Bn. €, 2010-2015
36 36 35 35 35 35
6 6 7 8 8 9
7 8 10 12 14 15
0
5
10
15
20
25
30
35
40
45
50
55
60 57 +4%
2014 2013
55
2012
52
2011
50
2010
49
CAGR
+17%
-1%
• Expansion of eCommerce has made B2C deliveries a faster-growing segment growing on average by +17% p.a
• The market segment of parcels sent by consumers has been growing by +9% p.a.
• B2B revenue was impacted by the period of slow economic develop-ment, resulting in an average decline of -1% p.a.
C2X B2B Source: Apex Insight European Parcels: Market Insight Report, 2016
** All service levels are included (time definite and deferred). Adjacent services, such as mail, pallet distribution, groupage, freight forwarding, sameday courier and contract logistics are excluded
2015
59
B2C
+9%
* Includes: DE, UK, FRA, IT, ESP, NL, BE, PL, CH, SWE, NOR, AUT, DK, GR, FIN, PT, IRL, CZ, RO, HU, SVK, CR, HR, BG, SLO, SRB, LTU, LVA, LUX, EST, BIH, ISL, ALB, MKD, MLT, MNE
Bn. €
GLS | Company Overview, June 2016
But B2B still generates the most revenue in all main European countries
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European Parcel Market Segment Split by Country*, 2015
30%
20%
10%
100%
90%
80%
70%
60%
50%
40%
0% DE FR IT Other Europe ** PL BE NL ES
• 2B deliveries account for the majority of all major European markets
• Yet market share varies between the countries:
o Italy (71%) and Poland (73%) have the highest 2B market shares
o Due to its size, the German 2B market (68%) is by far the largest 2B market in Europe
C2X B2B Source: Apex Insight European Parcels: Market Insight Report, 2016
** All service levels are included (time definite and deferred). Adjacent services, such as mail, pallet distribution, groupage, freight forwarding, sameday courier and contract logistics are excluded
B2C
* Includes: CH, SWE, NOR, AUT, DK, GR, FIN, PT, IRL, CZ, RO, HU, SVK, CR, HR, BG, SLO, SRB, LTU, LVA, LUX, EST, BIH, ISL, ALB, MKD, MLT, MNE
GLS | Company Overview, June 2016
Competitive Landscape
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Competitive Landscape European Parcel Market
Independent local services
• Independent / single country players which focus on niches
• Hermes, largest of the independent players (backed up by Otto Group parcel volume)
National postal companies
• Large providers which are strong in home market
• Providers in Southern Europe play much smaller role in national markets
Integrators
• DHL, overall leader across Europe • FedEx, became No 2 in Europe after
acquiring TNT • UPS, global leader and currently No
3 in Europe
European networks
• GLS, largest European network • DPD, second to DHL in the number
of parcels carried in Europe • Independent carriers which work in
partnerships (Eurodis)
Potential new entrants
• Retail companies could potentially in-source some of its parcels traffic (mainly for same day delivery) and thus raise standards
Four groups of distinct parcel carriers and potentially new entrants compete in the European market
GLS | Company Overview, June 2016
Growing E-Commerce, further pressure on prices and growing cross-border markets shape the parcel market
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Three main structural Market Trends
E-Commerce is main growth factor
leading to convergence of parcels segments (B2B, B2C,
C2C)
CEP companies create service improvements particularly on
last mile delivery and communication with
consignees
Pressure on prices driven by large customers and pooled purchasing activities of
SME who themselves suffer from consolidation and increased
price pressure
CEP companies need improved productivity
Cross-border market grows faster than domestic segment and suffers strongly from price
pressure
CEP market starts to form country clusters which results
in (inter)national market consolidation
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1 2 3
GLS | Company Overview, June 2016
Who is the GLS Group?
GLS covers 41 states in Europe with parcel services, the majority via own subsidiaries, others via partner companies
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?
GLS | Company Overview, June 2016
In three phases the GLS Group of today developed out of German Parcel
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History of the GLS Group
1989 1992 1999
German and General Parcel: Laying the foundation
Speed before Structure: Establishing the GLS Network
Completing the GLS network
1999 2002 2003 Today
1 2 3
Founding German Parcel (German franchise system)
Founding General Parcel
(European franchise system)
RMG acquires German Parcel &
Foundation of GLS
• Acquisition of remaining equity stakes
• Foundation of new companies in SK, RO, PT, CZ, HR
• Establishment of network partner agreements in Europe and Worldwide
• Harmonisation of Brand, Products, Operations, IT and Quality
• Entering in B2C
• Acquisition of companies in DE, HU, IE, DK, NL, FR, BE, ES, AT, IT, FI (100% and equity interests)
• Foundation of new companies in SI, PL
• Network partner agreements with PFWW
• Launch of the common brand GLS
• Establishment of the holding company (GLS B.V.)
GLS | Company Overview, June 2016
Today, GLS is a leading player in the European parcel market with more than 2 bn. €uro turnover
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Overview GLS 2016
Founded in 1999, with strong historical roots in nearly all domestic markets, GLS is one of the leading parcel service providers in Europe today
431 million parcels
(FY 2015/16)
> 220,000 customers*
€ 2.2 billion turnover
(FY 2015/16)
* Including franchisees in Italy
GLS | Company Overview, June 2016
GLS is generating most revenue in the parcel segment
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GLS Revenue Segmentation – Product Types
Proportion of GLS revenue (FY 2015/16)
Parcel - Products & Services • Parcel and package deliveries within
regular transit times • Value-added parcel services (Pickup, Cash etc.)
Express – Products & Services • Time Definite Deliveries • Same Day Deliveries • Value-added express services
Logistics – Solutions • Warehousing, Pick & Pack • Value-added logistics solutions • Freight, Groupage
94%
3%
3%
GLS | Company Overview, June 2016
GLS covers 41 European states via its subsidiaries and partner companies in Europe
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The GLS Network Today
GLS subsidiaries GLS Austria GLS Denmark GLS Hungary GLS Poland GLS Slovenia
GLS Belgium (incl. LU) GLS Finland GLS Ireland GLS Portugal GLS Spain
(incl. AD)
GLS Croatia GLS France (incl. MC)
GLS Italy (incl. SM, VA) GLS Romania Der Kurier
(DE)
GLS Czech Republic GLS Germany GLS Netherlands GLS Slovakia
Network partners in Europe ACS Air Courier Service (GR, CY)
Global Parcels Ltd. (MA)
Itella Logistics (EE, LV, LT)
Parcelforce Worldwide (UK)
Schenker (SE)
A2B Express (BA, ME, MK, RS, XK)
Interlogistica Ltd. (BG)
MNG Kargo (TR)
Posten Norge (NO)
Swiss Post GLS (CH, LI)
GLS | Company Overview, June 2016
• The GLS Network in Europe covers 41 states via a road-based system
• 18 states are operated by fully owned subsidiaries
• To do so, GLS employs approx.
• The vast majority of delivery vehicles
and trucks are sub-contracted
• GLS usually employs no own drivers
In Europe, 41 hubs and 713 depots are connected with each other through a road-based system
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Business Model GLS: Key facts and figures (2015/16)
• c. 14,000 employees
• 41 Hubs and 713 Depots1
• c. 18,000 delivery vehicles
• c. 2,000 long-distance trucks
1including sub-depots and depots operated by partners in those countries where GLS has a subsidiary company
GLS | Company Overview, June 2016
Initiatives
Initiatives
• Profitable Growth and Excellent Services are the central objectives for the next years.
• Streamlined delivery processes, introduction of same-day deliveries and enhanced B2C capabilities
• Ongoing selective acquisition strategy • Continuing to strengthen brand awareness • Develop premium 2C services
Germany, France and Italy are the most important GLS countries
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Overview Strategy GLS Germany, GLS France and GLS Italy
Germany
France
Italy
Market • Highly competitive market
conditions • Minimum wage legislation
impacting cost base • Growth in same-day segment
Market
Market
• Challenging market conditions – future B2C growth expected to be lower
• Relatively immature online
marketplaces • Lower B2C parcel market
penetration
Initiatives
• Continue the turnaround of GLS France. • Measures to promote top-line growth • Break-even planned for 2017/18
GLS | Company Overview, June 2016 16
GLS Group Strategy
GLS Group Strategy
France Germany Other Countries
Italy
IT Agenda 2020
Individual Country Strategies
• Foster European growth and development
• Steer and direct the individual countries in their strategic execution
• Development of the organization and financial controlling
• Group Strategic Goals as guideline for national strategies
• National strategies to: o Increase revenues and EBIT o Address specific challenges o Ensure customer proximity
• Technology Leadership
The GLS Holding steers and controls the Group, the countries implement the individual country strategies
GLS | Company Overview, June 2016
GLS aims to increase overall value for the Royal Mail Group
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Outlook: Main targets GLS Group to increase value
Our biggest value increase for the Royal Mail Group can be achieved by
• Increasing scale and footprint of the European parcel network
• Focusing on B2B with selective B2C growth (Premium 2C)
• Technology leadership
GLS | Company Overview, June 2016