Aramex PJSC Investors Presentation Aug ,2010 Company Profile Company Structure Strategic Direction Financial Analysis Aramex Quick Overview Highlights Background Established: 1982, 27 years in operation Hubs: Main hubs in Amman, Dubai, Hong Kong, Liege, London, New York and Singapore. Offices: 309 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 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 Financial Performance 3rd Q’10 Revenue (3rd Q’10): US$148 million Gross Margin (3rd Q’10): 54% Net Income (3rd Q’10): US$13 million Net Margin: 8.6% Shareholders Equity (3rd Q’10): US$474 million Total Assets (3rd Q’10): US$602 million Cash (3rd Q’10): US$141 million ARAMEX Background History Ownership 1982 1997 2002 2005 Established as a Privately Held Company 1st Middle East Company on NASDAQ Returned to Private Ownership Public on Dubai Financial Market Product Progression 1982 Express Wholesale Delivery 1984 Express Retail 1985 Multiple Product Offering 1997 2004 Value Added Services Supply Chain Solutions Shareholders Value Creation Growth in Aramex’s Value (US$ Million) 1000 900 800 700 600 500 901 400 300 428 200 185 100 0 25 1997 - Listing on Nasdaq 65 2002- De-listing from Nasdaq 2005- Listing on DFM Jun-09 Sep-10 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. 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$’000) CAGR 12.9% Product Distribution Change in Product Distribution 3rdQ’10 2006 Logistics 4.3% Others 7.5% Express 30.6% Domestic 14.8% Freight Forwarding 42.8% Geographic Distribution Change in Geographic Distribution 3rdQ’10 2006 North America 2.2% Asia 8.7% Europe 19.2% Middle East 70.0% Gross Profit & Gross Margin Growth in Gross Profit (US$’000) CAGR 21.4% Net Income & Net Margin Growth in Net Profit (US$’000) CAGR 25.4 % Aramex PJSC Balance Sheets All values in 000' USD Assets Current Assets Cash and cash equivalents Receivables (net) Other current assets 2006 A 2007 A 2008 A 2009 3rd Q'10 60,601 71,245 21,328 65,037 86,901 26,135 93,619 94,285 26,686 136,650 95,044 23,688 140,683 109,958 28,956 Total current assets Non-Current Assets Property, Plant and equipment (net) Goodwill (net) Other non current assets Total non-current assets 153,174 178,074 214,591 255,382 279,596 34,891 218,845 4,900 258,636 52,548 218,755 6,659 277,962 65,449 219,311 3,102 287,862 67,232 232,377 5,435 305,044 79,320 232,377 11,033 322,730 Total assets Liabilities, Minority Interest and Shareholders' Equity 411,810 456,035 502,452 560,426 602,326 7,470 2,262 32,004 37,349 79,085 5,498 3,555 35,967 39,264 84,284 3,894 3,185 30,816 54,802 92,697 2,437 2,037 32,248 63,290 100,012 2,065 973 31,077 68,243 102,359 3,643 11,193 14,836 5,251 4,005 10,882 14,887 6,928 4,293 14,324 18,617 7,884 1,760 16,516 18,276 7,663 897 18,090 18,987 6,589 272,287 0 539 0 486 27,229 218 299,515 0 3,730 3,899 1,006 0 0 329,467 0 6,997 158 (1,668) 0 0 362,414 0 11,143 611 (697) 0 0 398,655 0 11,143 518 (856) 0 0 Current Liabilities: Due to Banks Current Portion of LTD Trade payables Other current liabilities Total current liabilities Non-Current Liabilities: Long term debt Other non current liabilities Total non-current liabilities Minority interest in subsidiaries Shareholders' Equity: Issued and paid-up capital Contribution to surplus Reserve Cumulative change in fair value Accumulated other comprehensive income (loss) Cash Dividends Proposed directors fees Retained earnings 11,881 41,786 48,300 61,005 64,932 Total shareholders' equity 312,638 349,936 383,254 434,475 474,391 Total Liabilities, minority interest and shareholders' equity 411,810 456,035 502,452 560,426 602,326