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Gati Limited
Investor Presentation August 2014
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The presentation contains certain forward looking statements concerning future
business prospects and business profitability of Gati and its affiliates, which are subjectto number of risks and uncertainties that could cause actual results to differ materiallyfrom those in such forward looking statements. The risks and uncertainties relating tothese statements include, but not limited to, risks and uncertainties regarding fluctuationin earnings, our ability to manage growth, competition(both domestic and international),economic growth in India and the target countries for exports, ability to attract andretain highly skilled professionals, time and cost overruns on contracts, our ability tomanage our international operations, government policies in action with respect toinvestments, fiscal deficits, regulations, etc., interests and other fiscal costs generallyprevailing in the economy. The company does not undertake to make anyannouncements in case of these forward looking statements become materiallyincorrect in future or update any forward looking statements made from time to timeby or on behalf of the company.
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FORWARD LOOKING & PRECAUTIONARY STATEMENT
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INDEX
Company Profile
Unparalleled Infrastructure
Key Milestones
Key Financial Metrics
GATI Group Structure
GATI-EDGE & IT Capabilities
Key Business Verticals
Other Verticals
Debt Management
Capex Plans and Financial Highlights
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4
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7
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10
15
18
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22Awards & CSR Activities
24Way Forward
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Hub & Spoke
First company to introduce time sensitive movement of
commercial packages on door to door delivery concept inIndia since 1989
Multimodal capabilities and delivers more than 5.5 million
commercial packages every month
Company identified potential of E Logistics business and isgrowing it as a separate business vertical since FY 2011-12
Gati moves 1.4% of Indias non -service GDP on itsnetwork
One stop solution to all logistics requirements
Covers 667 district out of total 671 districts. LargestExpress network in India
Company ventured into the reefer truck transportationthrough 100% acquisition of Kausar India Ltd. Currently ithas a fleet strength of over 200 Vehicles.
PROFILE
World Class ITCapabilities
Largest ExpressNetwork
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5000+ Young
Work Force
2.6 Million Sftof Warehouse
Capacity
24X7 CallCentre
Over 200Reefer Trucks
2 e-Fullfilment
Centres
4500 FleetSize
400+ Truck
Partners
1300 PlusGati Business
Associates
500+ Bikers
600+ Officesincluding 16
Distributionhubs
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UNPARALLELED INFRASTRUCTURE
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1989-95
1996-00
2001-06
2007-14
Introduced door to door service
Introduced cash on delivery
Expansion to SAARC
Received ISO Certification
Introduction of 24*7 customerconvenient centre
Launch of MechatronicWarehouses
Introduction of ownCustomized ERP GEMS
Launched India-centric distributionsolutions and forayed into Asia Pacificregion
Gati Millennium Express: First cargotrain of Gati
Ventured in Cold Chain Logistics
Joint Venture with KWE Japan
Ventured into E Commerce Logistics
Project Udaan: Business transformationexercise with IBM
Expansion of Cold Chain Vertical throughwarehouses
Creating Vision 2020
Establishing e-Fulfillment centers for e-Commerce clients
KEY MILESTONES
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Gati Limited(Consolidated)
Partly OwnedSubsidiaries
Wholly OwnedSubsidiaries
Gati Limited
(Standalone)GATI-KWE(70%)
Gati Kausar
(Cold Chain)
Gati Import Export(Trading)
Zen Cargo Movers
(CHA)
Gati Asia Pacific PteLtd (Singapore)
E -Commerce
Freight Forwarding
Fuel Stations
Surface Express
Air Express
Parcel Train (GTS)
Supply Chain
Service OfferingSubsidiary
GATI GROUP STRUCTURE
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KEY FINANCIAL METRICS
For FY 2014 the figures of Total Revenue and EBITDA are pertaining to period of July 2013-June 2014. Reserves & Surplus and Gross Block figures are as on 31 st March2014 7
Rs. In Millions
* *
**
*
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GATI-EDGE
CustomizedServices
One StopSolution For
Logistics
World ClassIT Capabilities
Pan IndiaMultimodalNetwork
Professional
Management
Pioneer InExpress
Distribution
THE GATI-EDGE
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Integratedtechnology
systems
Customer relationshipmanagement
Employeeproductivity
Real time shipmentinformation
24 X 7 Customer care
Customized warehousemanagement
Customer account
management(Invoicing / transitdetails)
Gati EnterpriseManagement System(GEMS)*
Oracle Financials
Oracle CRM
WarehouseManagement System
HRInformationSystem
Vehicle TrackingSystem
Business Intelligence
Mailing systems
Enterprise Management
WORLD CLASS IT CAPABILITIES
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KEY BUSINESS VERTICLES
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GATI-KWE: EXPRESS DISTRIBUTION
GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS
GATI: ECOMMERCE LOGISTICS SOLUTIONS
OTHER BUSINESS VERTICALS
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Gati hived off its Express Distribution and Supply Chain division to its joint venture with Kintetsu WorldExpress (KWE), a Japanese logistics player
With close to 80% contribution in the total revenue and ~16% market share in the industry, This is one ofthe key verticals for the Company
Provides express surface cargo, premium air cargo, rail transport solutions, supply chain management &warehousing solutions through pan-India presence
Fleet strength of over 4,500 vehicles and a warehousing capacity of 2.6mn sq. ft.
Direct relationships with air line companies for moving air cargo
First to introduce parcel train movement in India, runs parcel train between Kalyan-Kolkatta Guwahati
Revenue Break-up (FY2014) W ell spread across the country with dominance in surface transport
79%
8%
11%
2%
Mode of Transport
Surface Rail Air Others
15% 14%
13%
13%
8%6%
31%
Industry-wise
Pharma IT Hardware Auto AncillaryEngineering Textiles FMCGOthers
24%
35%
10%
31%
Geography
South West East North
B u s i n e s s
O v e r v
i e w
GATI-KWE: EXPRESS DISTRIBUTION
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GATI-KWE: EXPRESS DISTRIBUTION
12
13-14 14-15
116 139
20%
13-14 14-15
1063 1230
16%
GROWTH PLAN
REVENUE in Cr
EBITDA in Cr
Key Highlights
Grown at 16% in FY 13-14 to reacheda annual turnover of 1063Cr.
EBITDA improved to 10.9% in FY 13-
14.
Expected to grow consistently at 16% .
Delivers over 5.5 Million packages in a
month
Project Udaan to continue unlocking
values.
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Leading integrated player in the reefer truck transportation.
Fleet size of over 200 vehicles.
Climate control capability from +20 degrees to 20 degrees Celsius.
Transporting 2 Lac tons annually.
ISO 9001:2008 certified.
Pan India network.
Plan to set up 10 cold chain warehouses across 8 strategic locations with atotal capacity of approximately 43,000 pallets.
GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS
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13-14 14-15
4 7
75%
13-14 14-15
47 55
17%
GROWTH PLAN
REVENUE in Cr
EBITDA in Cr
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ECOMMERCE LOGISTICS
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14-15E13-1412-1311-12
109
62
25
12
REVENUE in Cr
Amongst top 5 E-logistic players in the country.
Capacity to deliver over 23000 shipments per day.
Provides value added services: COD, packing, reverselogistics, E-Fulfillment.
525 Bikers for last mile delivery.
Growth over 100% YoY and expected to sustain for nexttwo years
2.6 Mn packages delivered in last 9 months.
6 e-Pick centers & 3 e-Pack Center.
Growth Plans
Increase delivery capability to 30,000 shipments perday by Dec 2014.
Capacity expansion: Bikers 1000 NosE-logistics outlets - 90 NosE-Fulfillment Centers - 19 Nos
Tabs to all Bikers for real time track & trace.
Customization of IT to suit E-ta ilers requirements.
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Offers an end-to-end solution for companies including international freight forwarding, customs handling, import ofgoods, warehousing and last-mile delivery to the end-customer (B2B, B2C)
OUR CUSTOMERSNew entrants/ Single-brand players entering Indian marketCompanies wanting to test waters before establishing their own set up, including product manufacturers with facilitiesoutside countryTrading companies procuring from multiple product manufacturers abroadOrganizations with philosophy of focusing in core strength
Enables import, trade and distribution in India
Forayed into a integrated supply chain contract with a major player in the hospitality industry to manageinventory requirements
Gati ImportExport Trading
Ltd. (GIETL)
OTHER VERTICAL: GIETL
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Benefits: Stabilization of delivery patterns will drive behavioral change within the procurement processat individual hotels
Need: Supply chain framework to build and improve efficiency in the domestic hospitality industryprocurement process. Current engagement with one of the largest hotel chains comprising of close to100 hotels in 40 locations across India
CURRENT SETUP
SUPPLIERSHOTEL
LOCATIONS
F
F
F:
:
F
Decentralizedsupplies ordering
systemHigh transactioncosts for suppliersand hotels
Uncertain deliverylead times
Excess inventoryholding at Hotelstores
Improved servicelevels
Reduction inInventory withinthe supply chain
Reduction inoverall logisticscosts
Previous Setup SUPPLIERSHOTEL
LOCATIONS
FF
F:
:
F
GIETLSOLUTION
InventoryOwnership
Fixed Supply Chain Services Fee(Primary, warehouse, secondary, trading)
CASE STUDY: GIETL
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China
Hong Kong
SingaporeThailand
Nepal Bhutan
Bangladesh
Caters to Asia Pacific regions through own offices and other countries through agents
Provides cargo movement between SAARC nations through surface
InternationalFreightForwarding
GATIS PRESCENCE IN AISA PACIFIC & SAARC REGION
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DEBT MANAGEMENT
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GATI-KWE credit rating hasbeen upgraded by ICRA. Longterm facilities : A (A Minusprevious year), Short termfacilities: A1 (A2 Plus previousyear).
Debts are reduced throughbetter working capitalmanagement.
Debts of Gati Ship are
excluded since June 2014, dueto de-subsidarization
Debts are expected to becontained below INR 500Crores.
Rs. In Millions
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Future Plans
To invest in cold chain warehouses to offer integrated solutions to the clients
To invest in establishing 19 e-Fulfillment centers across so many cities to offer
customized and value added services to e-Commerce clients
To upgrade and enhance IT infrastructure to offer customized solutions and meetfuture growth initiatives
Entity FY15 FY16 FY17 Total
Gati Kausar 690 913 665 2,268
Gati (e Commerce Vertical) 200 150 150 500
GKEPL 200 200 250 650
Total 1090 1263 1065 3418
(Amt. in Rs. Mn)
CAPEX PLANS
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Particulars Audited Projected
Year FY 13 FY 14 # FY 15E*
Total Income 12,895 15,029 17,577
EBIDTA 987 1,263 1,687
Depreciation 248 294 298
EBIT 740 969 1,388
Finance cost 437 433 417
Profit before tax 303 535 970
(Consolidated figures in Rs. Mn)
# Figures are annualized as the Company changed its financial year end to March from June with financial year 2013-14
FINANCILA HIGHLIGHTS: PROFIT & LOSS
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Year Award Category / By Award
2014 Confederation Of Indian Industry Scale Award for Supply Chain and Logistics Excellence
2014 3 rd Asia Manufacturing Supply Chain Summit Achievement in Continuous Improvement
2014 ICC Supply Chain and Logistics Excellence Awards Road Transportation
2014 Confederation Of Indian Industry 5S Excellence
2014 SONY Best Warehouse Award
2013 Rasbic Awards 2012-13 Recruiting & Staffing Best in ClassAwards
Most Innovative Recruiting & Staffing Program/Initiative
2013 Logistics and Supply Chain Leadership Awards ELSC CEO of the Year Ms. Chitra Shinde
2013 Logistics and Supply Chain Leadership Awards Best Road Service Provider of the Year
2013 Foundation for Liberal & Management Education 30 Best HR Leaders - Mr. J. Subramanian
2013 Carlson Rezidor Hotel Group Corporate Social Responsibility
2013 Mahindra Transport Excellence Awards "Lady Transport Personality of the Year-2012" & "LadyTransporter of the Year 2012-RegionalWinner South" - Ms. Chitra Shinde
AWARDS
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Adopts Tiger in a Zoo,Hyderabad Plantation Drive
Support to WOW
Project
Support to Uttarakand
calamity
Book Donation toGati School
Blood Donation Camp,Hyderabad
Inauguration ofComputer Lab at
Hyderabad
Clothes DonationDrive
CSR
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Expansion
Efficiency
Innovation
WAY FORWARD
Target to deliver 1 million packages per day by 2020
Group to grow at a rate of 15 17% in FY 14-15
EBITDA margins to improve by 50 basis points
Exit from shipping business completely
Debt to be contained below INR 500 Cr & leveraging theimproved credit rating of GATI-KWE
Well positioned to reap the benefits of proposed GSTimplementation
Capital infusion & construction of cold chain warehouses
Growing e-logistics business through a asset light model
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THANK YOU