Aramex PJSC

Investors Presentation

  

 

   

Company Profile

Company Structure

Strategic Direction

Financial Analysis

Financial PerformanceYear 2008

Background

Revenue (2008): US$566 millionGross Margin (2008): 50%Net Income: US$40 millionNet Margin: 7.1%Shareholders Equity (2008A): US$383 millionTotal Assets (2008A): US$502 millionCash (2008A): US$94 million

Highlights

Established: 1982, 28 years in operationHubs: Main hubs in Amman, Dubai, Hong Kong, Liege, London, New York and Singapore. Offices: 368 offices in 200 major cities worldwideStaff: Over 8,100 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 PerformanceYear 2009

Revenue (2009): US$534 millionGross Margin (2009): 57%Net Income (2009): US$50 millionNet Margin: 9.4%Shareholders Equity (2009): US$435 millionTotal Assets (2009): US$560 millionCash (2009): US$137 million

2004

2005 2002 1997 1982

1st Middle East 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

1997 - Listing on Nasdaq 2002- De-listing from Nasdaq

2005- Listing on DFM Dec-09

25

65

185

569

Value

Growth in Aramex’s Value (US$ Million)

ARAMEX Geographic Coverage

ARAMEX PeopleGrowth in Number of Staff in the past 5 years

2005 2006 2007 2008 2009

4,002

6,0316,600

7,6008,100

Sustainability

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

Key Sustainability Issues

• 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.

2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

(Gross Profit) & (Net Income) Margins

GP%N.I%

Years

Mar

gins

Federal System

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

Culture and Values

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 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

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

2006 2007 2008 2009

371,345

485,702566,344

533,896

CAGR12.9%

Growth in Revenue (US$’000)

Product Distribution

Other 6.1% Logistics

3.9%

Domestic13.0%

Express Revenue

32.2%

Freight Forwarding

44.8%

Chart Title

2006

Change in Product Distribution

Express 32.0%

Freight For-warding 38.70

Domestic 15.4% Logistics 6.3%

Others 7.6%

2009

Geographic Distribution

Change in Geographic Distribution

Middle East66.8%

Europe24.9%

North Amer-ica

1.4%Asia6.9%

Chart Title

2006 2009

Middle East

74.17%

Europe 18.19%

North America 1.49% Asia 6.15%

2006 2007 2008 2009

168,774

227,538

282,629301,705

45%

47%

50%56%

Gross ProfitGross Margin

Gross Profit & Gross Margin

Growth in Gross Profit (US$’000)

CAGR 21.4%

2006 2007 2008 2009

25,433

33,097

40,113

50,179

6.8% 6.8%

7.1%

9.4%Net IncomeNet Margin

Net Income & Net Margin

Growth in Net Profit (US$’000)

CAGR25.4 %

Aramex PJSC Balance SheetsAll values in 000' USD 2006 A 2007 A 2008 A 2009

AssetsCurrent AssetsCash and cash equivalents 60,601 65,037 93,619 136,650Receivables (net) 71,245 86,901 94,285 95,044Other current assets 21,328 26,135 26,686 23,688Total current assets 153,174 178,074 214,591 255,382Non-Current AssetsProperty, Plant and equipment (net) 34,891 52,548 65,449 67,232Goodwill (net) 218,845 218,755 219,311 232,377Other non current assets 4,900 6,659 3,102 5,435Total non-current assets 258,636 277,962 287,862 305,044Total assets 411,810 456,035 502,452 560,426

Liabilities, Minority Interest and Shareholders' EquityCurrent Liabilities:Due to Banks 7,470 5,498 3,894 2,437Current Portion of LTD 2,262 3,555 3,185 2,037Trade payables 32,004 35,967 30,816 32,248Other current liabilities 37,349 39,264 54,802 63,290Total current liabilities 79,085 84,284 92,697 100,013

Non-Current Liabilities:Long term debt 3,643 4,005 4,293 1,760Other non current liabilities 11,193 10,882 14,324 16,516Total non-current liabilities 14,836 14,887 18,617 18,275

Minority interest in subsidiaries 5,251 6,928 7,884 7,663

Shareholders' Equity:Issued and paid-up capital 272,287 299,515 329,467 362,414Contribution to surplus 0 0 0 0Reserve 539 3,730 6,997 11,143Cumulative change in fair value 0 3,899 158 611Accumulated other comprehensive income (loss) 486 1,006 (1,668) (697)Cash Dividends 27,229 0 0 0Proposed directors fees 218 0 0 0Retained earnings 11,881 41,787 48,300 61,005Total shareholders' equity 312,638 349,937 383,254 434,476Total Liabilities, minority interest and shareholders' equity 411,810 456,036 502,452 560,426