Aramex PJSC

Investor Presentation

2nd 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 Performance2nd Q’12

Financial Performance2nd Q’12

Revenue (2nd Q'12): US$213 millionGross Margin (2nd Q'12): 53.6%Net Income (2nd Q'12): US$17.5 millionNet Margin: (2nd Q'12 ) 8.2%Shareholders Equity (2nd Q'12): US$528 millionTotal Assets (2nd Q'12): US$693 millionCash (2nd Q'12): US$57 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

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ilit

y Is

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• 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

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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

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Val

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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

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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

2nd Q'12

Geographic Distribution

Change in Geographic Distribution

2008 2nd 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 - Q2

AssetsCurrent AssetsCash and cash equivalents 93,619 136,650 151,048 85,501 57,076Receivables (net) 94,285 95,044 110,012 136,054 152,756Other current assets 26,686 23,688 26,602 46,029 46,849

Total current assets 214,591 255,382 287,662 267,584 256,681Assets of a disposal group classified as held for sale 388Non-Current AssetsProperty, Plant and equipment (net) 65,449 67,232 90,438 121,266 139,755Goodwill (net) 219,311 232,377 235,037 275,039 275,039Other non current assets 3,102 5,435 9,435 14,862 21,292Total non-current assets 287,862 305,044 334,910 411,167 436,087

Total assets 502,452 560,426 622,572 678,751 693,156Liabilities, Minority Interest and Shareholders' Equity

Current Liabilities:Due to Banks 3,894 2,437 1,869 5,295 3,324Current Portion of LTD 3,185 2,037 1,828 3,268 2,843Trade payables 30,816 32,248 35,165 44,444 41,786Other current liabilities 54,802 63,290 71,720 84,522 89,913Total current liabilities 92,697 100,012 110,582 137,529 137,866Liabilities directly associated with the assets of a disposal group 131Non-Current Liabilities:Long term debt 4,293 1,760 1,771 2,624 3,208Other non current liabilities 14,324 16,516 18,585 22,321 23,740Total non-current liabilities 18,617 18,276 20,356 24,945 26,948Minority interest in subsidiaries 7,884 7,663 6,692 8,433 9,610Shareholders' Equity:Issued and paid-up capital 329,467 362,414 398,655 398,655 398,655Contribution to surplus 0 0 0 0 0Reserve 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) (7,089)Cash Flow Hedge (472)Reserve arised from acquisition of non-controlling interest (3,376) (4,160) (4,360)

Retained earnings 48,300 61,005 74,086 94,532 108,091

Total shareholders' equity 383,254 434,475 484,942 507,844 518,600

Total Liabilities, minority interest and shareholders' equity 502,452 560,426 622,572 678,751 693,156