Aramex PJSC Investor Presentation 3rd quarter 2012
Mar 26, 2015
Aramex PJSC
Investor Presentation
3rd quarter 2012
Company Profile
Company Structure
Strategic Direction
Financial Analysis
Financial PerformanceYear 2011
Financial PerformanceYear 2011
BackgroundBackground
Revenue (2011): US$701 millionGross 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
transportation solutions – One Stop Shop.
Aramex Quick Overview
Financial Performance3rd Q’12
Financial Performance3rd Q’12
Revenue (3rd Q'12): US$208 millionGross Margin (3rd Q'12): 53.0%Net Income (3rd Q'12): US$14.5 millionNet Margin: (3rd Q'12 ) 7.0%Shareholders Equity (3rd Q'12): US$542 millionTotal Assets (3rd Q'12): US$716 millionCash (3rd Q'12): US$75 million
2004 2004
2005 2005 2002 2002 1997 1997 1982 1982
First Arab-based Company on NASDAQ
Returned to Private Ownership
Public on Dubai Financial Market
Established as a Privately Held Company
Aramex Background History
Ownership
1997 1997 1985 1985 1984 1984 1982 1982
Express Retail
Express Wholesale Delivery
Product Progression
Multiple Product Offering
Value Added Services
Supply Chain Solutions
Shareholders Value Creation
Growth in Aramex’s Value (US$ Million)
Aramex Geographic Coverage
Aramex People
Growth in Number of Staff in the past 7 years
2005 2006 2007 2008 2009 2010 2011
4,002
6,031 6,600
7,600 8,100 8,675
10,295
Sustainability
Aramex is one of the first companies in the region to report on its sustainable business practices
Key
Su
stai
nab
ilit
y Is
sues
• Community Empowerment: Community based projects that target community and youth’s needs through a highly interactive participatory approach. Partners include NGOs, private sector, public sector, community centers, etc.
• Youth Empowerment & Education: Providing internship and training opportunities to students, as well as developing applied training programs in partnership with universities.
• Sports: Sponsorship of sports events, the Riyadi Club (Basketball and Squash) in Jordan, Jeddah United (the first women basketball team in Saudi Arabia, etc.)
• Environment: Introduction of Hybrid cars into aramex fleet, change to unleaded gas, using biodegradable and recycled material, commitment to become the first carbon neutral company in the region, etc.
• Emergency Relief : Providing logistics support and aid donation campaigns to disaster stricken areas such as: Asia Tsunami, Pakistan Earthquake, Lebanon War, Gaza War, etc.
Company Profile
Company Structure
Strategic Direction
Financial Analysis
Asset Light Model
• Aramex asset-light business model translated into a high degree of flexibility and agility in pursuing opportunities as well as efficient cost management.
• During the recession, Aramex asset-light business model allowed the company to create considerable efficiencies improving both the gross profit and net profit margins.
Fed
eral
Sys
tem
Front LineFront Line
• Federation of interdependent companies, that function as an independent unit managed by a local CEO
• Each unit sets its own business plans, objectives and budgets in line with 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 Services Office
Global Services Office
• 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, and other functional directors …etc
• Area boards are responsible for the area’s strategic direction, budgeting, performance, and operations
Area BoardsArea Boards
Cu
ltu
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nd
Val
ues
Unique Corporate Culture
Unique Corporate Culture
Belief that people are Aramex’s 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 as environmentally friendly practices.
Key ValuesKey Values
The Aramex Model
Highlights
Customer centric and dedication to service excellence
Decentralized and flat organization
Trust based system that empowers the front line
Company Profile
Company Structure
Strategic Direction
Financial Analysis
• Emerging markets: Capitalizing on experience, technology, product offering and international network by expanding the geographic reach into emerging economies with high growth potential.
• Core markets: Leveraging and expanding infrastructure in existing geographic locations to strengthen market positioning by introducing new products and services.
• 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
Aramex has extensive knowledge and experience in underdeveloped and developing markets and sees tremendous value in developing its global network by introducing its asset 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 global provider specialized in emerging markets while operating a global independent network:
Potential areas for expansion
1. Africa and CIS: Aramex is looking to invest in key African and CIS markets that enjoy political stability and economic growth potentials by working with partners that possess industry knowledge and can benefit from Aramex’s 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 and other markets.
3. India: Aramex has a sizable operation in India that offers international and domestic express service, and is looking to further enlarge its geographic presence and product offering.
Regions Identified for Geographic Expansion
Profitable company with margins in line with Aramex’s 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
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Financial Financial
Management / EmployeesManagement / Employees
Experienced management teams that are willing to continue post acquisition Track history of having met projections and budgets Diversified client base with minimal reliance on top clients or on network of
agents Not part of or affiliated with an already established network Strong corporate culture that is in line with Aramex’s Ability to change and incorporate the Aramex Accounting and IT systems.
Expansion through Acquisitions
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 appropriate warehousing space is not available Aramex will invest in purpose built facilities
Expansion of Warehousing Facilities
Expansion of Warehousing Facilities
There are a number of small to medium size businesses within the region that can be integrated with the existing Aramex operation and produce considerable efficiencies. Aramex continuously seeks to identify such companies to grow revenues and profit at higher efficiency.
Acquisition 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 a very 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 products and services, using existing infrastructure.
New Product DevelopmentNew Product Development
Highlights
Leveraging Existing Infrastructure
Company Profile
Company Structure
Strategic Direction
Financial Analysis
Revenue
2007 2008 2009 2010 2011
485,702
566,344 533,896 602,279
701,465
CAGR9.6%
Growth in Revenue (US$’000)
Product Distribution
2008
Change in Product Distribution
3rd Q'12
Geographic Distribution
Change in Geographic Distribution
2008 3rd Q'12
227,537 282,629 301,705 324,066
368,932
46.8%49.9%
56.5%53.8% 52.6%
2007 2008 2009 2010 2011Gross Profit Gross Margin
Gross Profit & Gross Margin
Growth in Gross Profit (US$’000)
CAGR 12.8%
33,097 40,113
50,179 55,572 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)CAGR
14.9 %
Aramex PJSC Balance SheetsAll values in 000' USD 2008 A 2009A 2010A 2011A 2012 - Q3
AssetsCurrent AssetsCash and cash equivalents 93,619 136,650 151,048 85,501 75,360Receivables (net) 94,285 95,044 110,012 136,054 151,642Other current assets 26,686 23,688 26,602 46,029 49,124
Total current assets 214,591 255,382 287,662 267,584 276,126Non-Current AssetsProperty, Plant and equipment (net) 65,449 67,232 90,438 121,266 141,475Goodwill (net) 219,311 232,377 235,037 275,039 275,039Other non current assets 3,102 5,435 9,435 14,862 23,579Total non-current assets 287,862 305,044 334,910 411,167 440,093
Total assets 502,452 560,426 622,572 678,751 716,219
Liabilities, Minority Interest and Shareholders' Equity
Current Liabilities:Due to Banks 3,894 2,437 1,869 5,295 4,219Current Portion of LTD 3,185 2,037 1,828 3,268 3,706Trade payables 30,816 32,248 35,165 44,444 44,363Other current liabilities 54,802 63,290 71,720 84,522 94,707Total current liabilities 92,697 100,012 110,582 137,529 146,994Non-Current Liabilities:Long term debt 4,293 1,760 1,771 2,624 2,333Other non current liabilities 14,324 16,516 18,585 22,321 24,409Total non-current liabilities 18,617 18,276 20,356 24,945 26,742Minority interest in subsidiaries 7,884 7,663 6,692 8,433 9,072Shareholders' Equity:Issued and paid-up capital 329,467 362,414 398,655 398,655 398,655Reserve 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) (6,402)Cash Flow Hedge (814)Reserve arised from acquisition of non-controlling interest (3,376) (4,160) (4,360)Retained earnings 48,300 61,005 74,086 94,532 122,557
Total shareholders' equity 383,254 434,475 484,942 507,844 533,411
Total Liabilities, minority interest and shareholders' equity 502,452 560,426 622,572 678,751 716,219