Aramex PJSC

Investor Presentation

2nd quarter 2014

  

 

   

Company Profile

Company Structure

Strategic Direction

Financial Analysis

Financial PerformanceYear 2013

Background

Revenue (Year'13): US$905 millionGross Margin (Year'13): 54.2%Net Income (Year'13): US$75.7 millionNet Margin: (Year'13 ) 8.4%Shareholders Equity (Year'13): US$579 millionTotal Assets (Year'13): US$813 millionCash (Year'13): US$179 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 PerformanceQ2-2014

Revenue (2nd Q’14): US$250 millionGross Margin (2nd Q’14): 55.1%Net Income (2nd Q’14): US$22.01 millionNet Margin: (2nd Q’14 ) 8.8%Shareholders Equity (2nd Q’14): US$570 millionTotal Assets (2nd Q’14): US$825 millionCash (2nd Q’14): US$135 million

2004

2005 2002 1997 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 1985 1984 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 PeopleGrowth in Number of Staff in the past 7 years

2005 2006 2007 2008 2009 2010 2011 2012 2013

4,002

6,0316600

76008100

86759,500

11,432 11,649

Sustainability

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

Key

Sus

tain

abili

ty 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.

Fede

ral S

yste

m

Front 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

• 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 Boards

Cul

ture

and

Val

ues

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 Values

The Aramex Model

Highlights

Customer centric and dedication to service excellenceDecentralized and flat organizationTrust 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

erfo

rman

ce

Financial

Management / 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

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

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 Development

Highlights

Leveraging Existing Infrastructure

 

Company Profile

Company Structure

Strategic Direction

Financial Analysis

Revenue

2009 2010 2011 2012 2013

533,896

602,297

699,971 836,353

905,309

CAGR14.1%

Growth in Revenue (US$’000)

Product Distribution

2009

Change in Product Distribution

Q2-2014

Geographic Distribution

Change in Geographic Distribution

2009 Q2-2014

301,705 324,066 368,048 450,455 490,470

56.5% 53.8% 52.6% 53.9% 54.2%

2009 2010 2011 2012 2013Gross Profit GP%

Gross Profit & Gross Margin

Growth in Gross Profit (US$’000)

CAGR 12.9%

50,179 55,572 57,599 66,471

75,684

9.4% 9.2%

8.2% 7.9%8.4%

2009 2010 2011 2012 2013Net Income Net Margin

Net Income & Net Margin

Growth in Net Profit (US$’000)

CAGR10.8 %

Aramex PJSC Balance SheetsAll values in 000' USD 2009A 2010A 2011A 2012A 2013A Q2-2014AssetsCurrent AssetsCash and cash equivalents 136,650 151,048 85,501 90,855 178,885 135,091Receivables (net) 95,044 110,012 136,054 158,870 164,434 186,703Other current assets 23,688 26,602 46,029 36,858 34,561 40,710Total current assets 255,382 287,662 267,584 286,583 377,880 362,504Non-Current AssetsProperty, Plant and equipment (net) 67,232 90,438 121,266 155,170 147,464 146,871Goodwill (net) 232,377 235,037 275,039 272,056 265,106 291,046Other non current assets 5,435 9,435 14,862 25,496 22,549 24,341Total non-current assets 305,044 334,910 411,167 452,721 435,119 462,258Total assets 560,426 622,572 678,751 739,303 812,999 824,762Liabilities, Minority Interest and Shareholders' EquityCurrent Liabilities:Due to Banks 2,437 1,869 5,295 3,085 0 881Current Portion of LTD 2,037 1,828 3,268 4,276 13,424 13,515Trade payables 32,248 35,165 44,444 42,529 44,426 46,448Other current liabilities 63,290 71,720 84,522 103,591 112,707 131,360Total current liabilities 100,012 110,582 137,529 153,481 170,557 192,204Non-Current Liabilities:Long term debt 1,760 1,771 2,624 3,367 34,879 30,486Other non current liabilities 16,516 18,585 22,321 25,337 28,452 31,828Total non-current liabilities 18,276 20,356 24,945 28,704 63,330 62,315Minority interest in subsidiaries 7,663 6,692 8,433 8,830 10,039 7,541Shareholders' Equity:Issued and paid-up capital 362,414 398,655 398,655 398,655 398,655 398,655Reserve 11,143 16,956 23,774 33,188 39,551 39,551Cumulative change in fair value 611 345 (137)Accumulated other comprehensive income (loss) (697) (1,724) (4,820) (9,433) (24,663) (25,565)Cash Flow Hedge (806) 3 242 Reserve arised from acquisition of non-controlling interest (3,376) (4,160) (4,360) (4,292) (6,617)Retained earnings 61,005 74,086 94,532 131,044 159,819 156,437Total shareholders' equity 434,475 484,942 507,844 548,288 569,073 562,702Total Liabilities, minority interest and shareholders' equity 560,426 622,572 678,751 739,303 812,999 824,763