Download pdf - Investor Presentation - Q1 2012

8/11/2019 Investor Presentation - Q1 2012

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Aramex PJSC

Investor Presentation

1st quarter 2012


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Company Profile

Company Structure

Strategic Direction

Financial Analysis


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FinancialPerformance

Year 2011

Background

Revenue (2011): US$701 million

Gross Margin (2011): 53%Net Income (2011): US$57.6 millionNet Margin: 8.2%Shareholders Equity (2011): US$516 millionTotal Assets (2011): US$679 millionCash (2011): US$86 million

Highlights

Established: 1982, 27 years in operationHubs: Main hubs in Amman, Dubai, Hong Kong, Liege, London, New York and Singapore.

Offices: 309 offices in 200 major cities worldwideStaff: Over 10,295 employeesFounder of the Global Distribution Alliance (GDA) and co-founder of the WFA World Freight Alliance.

Activities: Aramex is a logistics and supply chain management company providing total transportationsolutions One Stop Shop.

Aramex Quick Overview

FinancialPerformance1 st Q12

Revenue (1 st Q12): US$203 millionGross Margin (1 st Q12): 54.6%Net Income (1 st Q12): US$16.6 millionNet Margin: (1 st Q12 ) 8.2%Shareholders Equity (1 st Q12): US$535 millionTotal Assets (1 st Q12): US$697 millionCash (1 st Q12): US$90 million


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2004

2005200219971982

First Arab-basedCompany onNASDAQ

Returned toPrivateOwnership

Public on DubaiFinancial Market

Established as aPrivately HeldCompany

Aramex Background History

Ownership

1997198519841982

ExpressRetail

ExpressWholesaleDelivery

Product Progression

MultipleProductOffering

Value AddedServices

Supply ChainSolutions


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Shareholders Value Creation

Growth in Aramexs Value (US$ Million)

0

100

200

300

400

500

600

700

800

900

1997 - Listingon Nasdaq

2002- De-listing from

Nasdaq

2005- Listingon DFM

Dec-09 Dec-10 Dec-11 Mar-12

25 65

185

569

829718 726

Value


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Aramex Geographic Coverage


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Aramex People

Growth in Number of Staff in the past 7 years

2005 2006 2007 2008 2009 2010 2011

4,002

6,0316,600

7,6008,100 8,675

10,295


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Sustainability

Aramex is one of the first companies in the region to report on its sustainable business practices

K e y

S u s

t a i n a

b i l i t y I s s u e s

Community Empowerment: Community based projects that target

community and youths needs through a highly interactive participatoryapproach. Partners include NGOs, private sector, public sector,community centers, etc.

Youth Empowerment & Education: Providing internship and trainingopportunities to students, as well as developing applied trainingprograms in partnership with universities.

Sports: Sponsorship of sports events, the Riyadi Club (Basketball andSquash) in Jordan, Jeddah United (the first women basketball team inSaudi Arabia, etc.)

Environment: Introduction of Hybrid cars into aramex fleet, change to

unleaded gas, using biodegradable and recycled material, commitmentto become the first carbon neutral company in the region, etc.

Emergency Relief : Providing logistics support and aid donationcampaigns to disaster stricken areas such as: Asia Tsunami, PakistanEarthquake, Lebanon War, Gaza War, etc.


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Asset Light Model

Aramex asset-light business model translated into a high degree of flexibility andagility in pursuing opportunities as well as efficient cost management.

During the recession, Aramex asset-light business model allowed the company tocreate considerable efficiencies improving both the gross profit and net profit margins.

0%

10%

20%

30%

40%

50%

60%

2008 2009 2010 2011 1st Q'12

M a r g i n s

Years

(Gross Profit) & (Net Income) Margins

GP%

N.I%


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F e

d e r a

l S y s

t e m

FrontLine

Federation of interdependent companies, that function as anindependent unit managed by a local CEO

Each unit sets its own business plans, objectives and budgets in linewith the corporate strategy

The Aramex Model

Highlights

Manages interaction among members of the federation

Sets policies, procedures, & monitors compliance Provides marketing, network infrastructure & IT infrastructure

Global

ServicesOffice

Aramex geographic regions are divided into five areas: Levant, Gulf, Africa, Asia and West (Europe and US)

Each area has a board composed of the senior regional manager, andother functional directors etc

Area boards are responsible for the areas strategic direction,budgeting, performance, and operations

AreaBoards


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C u

l t u r e a n

d V a

l u e s

UniqueCorporateCulture

Belief that people are Aramexs most significant asset.

Encouraging creativity, innovation and entrepreneurship. Empowering employees through continuous development &

training. Promotion from within

Committed to economic and social development as well asenvironmentally friendly practices.

KeyValues

The Aramex Model

Highlights

Customer centric and dedication to service excellence

Decentralized and flat organization

Trust based system that empowers the front line


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Company Profile

Company Structure

Strategic Direction

Financial Analysis


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Emerging markets: Capitalizing on experience, technology, product offering

and international network by expanding the geographic reach into emergingeconomies with high growth potential.

Core markets: Leveraging and expanding infrastructure in existing geographiclocations to strengthen market positioning by introducing new products andservices.

Mediums of geographic expansion:

Franchising which will provide Aramex with a revenue stream, requiring minimal

capital and management. Small and medium-sized attractive acquisitions and Joint Ventures which can be

integrated.

Vision: To enable and facilitate regional & global trade & commerce


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Aramex has extensive knowledge and experience in underdeveloped and developing

markets and sees tremendous value in developing its global network by introducing itsasset light model and product offering into new markets with high growth potential.

Taking the Aramex model to new markets will strengthen its position as a key globalprovider specialized in emerging markets while operating a global independentnetwork:

Potential areas for expansion

1. Africa and CIS: Aramex is looking to invest in key African and CIS markets that enjoy political stability andeconomic growth potentials by working with partners that possess industry knowledge and can benefit from

Aramexs network and know-how.

2. Asia: Aramex will further expand its current operations in locations like Singapore, Hong Kong, Indonesia,Vietnam, while developing its gateways in China and looking for investment opportunities in other South East

Asian countries. The Asian presence aims at servicing important trade routes between Asian markets andother markets.

3. India: Aramex has a sizable operation in India that offers international and domestic express service, and islooking to further enlarge its geographic presence and product offering.

Regions Identified for Geographic Expansion


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Profitable company with margins in line with Aramexs margins.Capacity to support reasonable levels of leverage to allow for financing.Proper financial disciplines with accredited auditors.Non-asset based companies.

Advantage Highlights

P e r

f o r m a n c e

Financial

Management /

Employees

Experienced management teams that are willing to continue post acquisitionTrack history of having met projections and budgetsDiversified client base with minimal reliance on top clients or on network ofagents

Not part of or affiliated with an already established networkStrong corporate culture that is in line with Aramexs

Ability to change and incorporate the Aramex Accounting and IT systems.

Expansion through Acquisitions


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Supply chain solutions outsourcing is expanding in the Middle East and South Asia;warehousing is a critical pre-requisite for offering these services and where appropriatewarehousing space is not available Aramex will invest in purpose built facilities

Expansion ofWarehousingFacilities

There are a number of small to medium size businesses within the region that can beintegrated with the existing Aramex operation and produce considerable efficiencies. Aramex continuously seeks to identify such companies to grow revenues and profit athigher efficiency.

Acquisition

Aramex has succeeded in introducing new products when it acquired Info-Fort, a

records and information management service provider. The offering has proved to be avery successful and niche one that has already expanded to 9 countries (GCC, Jordan,Egypt, Iran) and that has potential to other core markets.

There are also various opportunities across the network, to further develop productsand services, using existing infrastructure.

New ProductDevelopment

Highlights

Leveraging Existing Infrastructure


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Company Profile

Company Structure

Strategic Direction

Financial Analysis


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Revenue

2007 2008 2009 2010 2011

485,702

566,344 533,896 602,279

701,465

CAGR9.6%

Growth in Revenue (US$000)


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Product Distribution

2008

Change in Product Distribution

1st

Q12

Express,32.9%

FreightForwarding,

36.9%

Domestic,19.1%

Logistics,4.3%

Others,6.8%

Express,29.1%

FreightForwarding,

46.2%

Domestic,12.6%

Logistics,6.0%

Others,6.1%


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Geographic Distribution

Change in Geographic Distribution

2008 1st

Q12

Middle East& Africa71.9%

Europe17.0%

NorthAmerica

2.0%Asia 9.1%

MiddleEast &Africa,71.0%

Europe,20.5%

NorthAmerica,

2.0%Asia, 6.5%


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227,537282,629 301,705

324,066368,932

46.8%49.9%

56.5%53.8% 52.6%

2007 2008 2009 2010 2011Gross Profit Gross Margin

Gross Profit & Gross Margin

Growth in Gross Profit (US$000)

CAGR12.8 %


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33,09740,113

50,17955,572 57,599

6.8%7.1%

9.4% 9.2%

8.2%

2007 2008 2009 2010 2011

Net Income Net Margin

Net Income & Net Margin

Growth in Net Profit (US$000) CAGR14.9 %


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Aramex PJSC Balance Sheets All values in 000' US D 2008 A 2009A 2010A 2011A 2012 - Q1

AssetsCurrent AssetsCash and cash equivalents 93,619 136,650 151,048 85,501 89,553Receivables (net) 94,285 95,044 110,012 136,054 143,871Other current assets 26,686 23,688 26,602 46,029 50,272

Total current assets 214,591 255,382 287,662 267,584 283,695Non-Current AssetsProperty, Plant and equipment (net) 65,449 67,232 90,438 121,266 122,854Goodwill (net) 219,311 232,377 235,037 275,039 275,039Other non current assets 3,102 5,435 9,435 14,862 15,133Total non-current assets 287,862 305,044 334,910 411,167 413,026Total assets 502,452 560,426 622,572 678,751 696,721Liabilities, Minority Interest and Shareholders' EquityCurrent Liabilities:Due to Banks 3,894 2,437 1,869 5,295 5,067Current Portion of LTD 3,185 2,037 1,828 3,268 3,209Trade payables 30,816 32,248 35,165 44,444 42,540Other current liabilities 54,802 63,290 71,720 84,522 85,827Total current liabilities 92,697 100,012 110,582 137,529 136,644Non-Current Liabilities:Long term debt 4,293 1,760 1,771 2,624 2,355Other non current liabilities 14,324 16,516 18,585 22,321 23,139Total non-current liabilities 18,617 18,276 20,356 24,945 25,494Minority interest in subsidiaries 7,884 7,663 6,692 8,433 9,223Shareholders' Equity:Issued and paid-up capital 329,467 362,414 398,655 398,655 398,655Contribution to s urplus 0 0 0 0 0

Reserve 6,997 11,143 16,956 23,774 23,774Cumulative change in fair value 158 611 345 (137)Accumulated other comprehensive income (loss) (1,668) (697) (1,724) (4,820) (4,011)Cash Flow Hedge (11)Reserve arised from acquisition of non-controlling interest (3,376) (4,160) (4,160)Cash Div idends 0 0 0 0 0Proposed directors fees 0 0 0 0 0

Retained earnings 48,300 61,005 74,086 94,532 111,114

Total shareholders' equity 383,254 434,475 484,942 507,844 525,360Total Liabilities, minority interest and shareholders' equity 502,452 560,426 622,572 678,751 696,721