Transcript & Meeting with January 22nd 2007

Aramex PJSC
Investors Presentation
 Company Profile
 Company Structure
 Strategic Direction
 Financial Analysis
Aramex Quick Overview
Highlights
Background
 Established: 1982, 28 years in operation
 Hubs: Main hubs in Amman, Dubai, Hong Kong, Liege, London, New York and Singapore.
 Offices: 368 offices in 200 major cities worldwide
 Staff: Over 8,100 employees
 Founder 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.
Financial
Performance
Year 2008
 Revenue (2008): US$566 million
 Gross Margin (2008): 50%
 Net Income: US$40 million
 Net Margin: 7.1%
 Shareholders Equity (2008A): US$383 million
 Total Assets (2008A): US$502 million
 Cash (2008A): US$94 million
Financial
Performance
Year 2009
 Revenue (2009): US$534 million
 Gross Margin (2009): 57%
 Net Income (2009): US$50 million
 Net Margin: 9.4%
 Shareholders Equity (2009): US$435 million
 Total Assets (2009): US$560 million
 Cash (2009): US$137 million
ARAMEX Background History
Ownership
1982
1997
2002
2005
Established as a
Privately Held
Company
1st Middle East
Company on
NASDAQ
Returned to
Private
Ownership
Public on Dubai
Financial Market
Product Progression
1982
Express
Wholesale
Delivery
1984
Express
Retail
1985
Multiple
Product
Offering
1997
2004
Value Added
Services
Supply Chain
Solutions
Shareholders Value Creation
Growth in Aramex’s Value (US$ Million)
569
Value
185
65
25
1997 - Listing on
Nasdaq
2002- De-listing from
Nasdaq
2005- Listing on DFM
Dec-09
ARAMEX Geographic Coverage
ARAMEX People
Growth in Number of Staff in the past 5 years
8,100
7,600
6,600
6,031
4,002
2005
2006
2007
2008
2009
Sustainability
Key Sustainability Issues
Aramex is one of the first companies in the region to report on its sustainable business practices
•
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.
(Gross Profit) & (Net Income) Margins
60%
Margins
50%
40%
30%
GP%
20%
N.I%
10%
0%
2006
2007
2008
Years
2009
The ARAMEX Model
Highlights
Federal System
Front
Line
Global
Services
Office
• 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
• Manages interaction among members of the federation
• Sets policies, procedures, & monitors compliance
• Provides marketing, network infrastructure & IT infrastructure
• Aramex geographic regions are divided into five areas: Levant, Gulf,
Africa, Asia and West (Europe and US)
Area
Boards
• 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
The ARAMEX Model
Culture and Values
Highlights
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.
Customer centric and dedication to service excellence
Key
Values
Decentralized and flat organization
Trust based system that empowers the front line
 Company Profile
 Company Structure
 Strategic Direction
 Financial Analysis
Vision: To enable and facilitate regional & global trade & commerce
• 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.
Regions Identified for Geographic Expansion
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.
Expansion through Acquisitions
Advantage
Performance
Financial
Management /
Employees
Highlights
 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.
 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.
Leveraging Existing Infrastructure
Highlights
Expansion of
Warehousing
Facilities
Acquisition
New Product
Development
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
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.
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.
 Company Profile
 Company Structure
 Strategic Direction
 Financial Analysis
Revenue
Growth in Revenue (US$’000)
CAGR
12.9%
566,344
485,702
533,896
371,345
2006
2007
2008
2009
Product Distribution
Change in Product Distribution
2009
2006
Freight
Forwarding
44.8%
Other
6.1%
Domestic
15.4%
Logistics
3.9%
Logistics
6.3%
Others 7.6%
Domestic
13.0%
Freight
Forwarding
38.70
Express
Revenue
32.2%
Express
32.0%
Geographic Distribution
Change in Geographic Distribution
2006
North
America
1.4%
2009
Asia
6.9%
Europe
18.19%
North
America
Asia 6.15%
1.49%
Europe
24.9%
Middle East
66.8%
Middle
East
74.17%
Gross Profit & Gross Margin
Growth in Gross Profit (US$’000)
56.50%
Gross Profit
Gross Margin
50%
47%
CAGR
21.4%
45%
282,629
301,705
227,538
168,774
2006
2007
2008
2009
Net Income & Net Margin
Growth in Net Profit (US$’000)
Net Income
Net Margin
9.4%
CAGR
25.4 %
6.8%
6.8%
7.1%
50,179
40,113
33,097
25,433
2006
2007
2008
2009
Aramex PJSC Balance Sheets
All values in 000' USD
2006 A
2007 A
2008 A
2009
Assets
Current Assets
Cash and cash equivalents
60,601
65,037
93,619
136,650
Receivables (net)
71,245
86,901
94,285
95,044
Other current assets
21,328
26,135
26,686
23,688
153,174
178,074
214,591
255,382
Total current assets
Non-Current Assets
Property, Plant and equipment (net)
Goodwill (net)
Other non current assets
34,891
52,548
65,449
67,232
218,845
218,755
219,311
232,377
4,900
6,659
3,102
5,435
Total non-current assets
258,636
277,962
287,862
305,044
Total assets
411,810
456,035
502,452
560,426
Due to Banks
7,470
5,498
3,894
2,437
Current Portion of LTD
2,262
3,555
3,185
2,037
32,004
35,967
30,816
32,248
Liabilities, Minority Interest and Shareholders' Equity
Current Liabilities:
Trade payables
Other current liabilities
37,349
39,264
54,802
63,290
Total current liabilities
79,085
84,284
92,697
100,013
Non-Current Liabilities:
Long term debt
Other non current liabilities
Total non-current liabilities
Minority interest in subsidiaries
3,643
4,005
4,293
1,760
11,193
10,882
14,324
16,516
14,836
14,887
18,617
18,275
5,251
6,928
7,884
7,663
272,287
299,515
329,467
362,414
Shareholders' Equity:
Issued and paid-up capital
Contribution to surplus
Reserve
Cumulative change in fair value
0
0
539
3,730
0
6,997
0
3,899
486
1,006
27,229
0
0
218
0
0
0
11,881
41,787
48,300
61,005
Total shareholders' equity
312,638
349,937
383,254
434,476
Total Liabilities, minority interest and shareholders' equity
411,810
456,036
502,452
560,426
Accumulated other comprehensive income (loss)
Cash Dividends
Proposed directors fees
Retained earnings
158
0
11,143
(1,668)
611
(697)
0