Aramex PJSC
Investor Presentation
1st quarter 2012
 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 10,295 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 2011
 Revenue (2011): US$701 million
 Gross Margin (2011): 53%
 Net Income (2011): US$57.6 million
 Net Margin: 8.2%
 Shareholders Equity (2011): US$516 million
 Total Assets (2011): US$679 million
 Cash (2011): US$86 million
Financial
Performance
1st Q’12
 Revenue (1st Q’12): US$203 million
 Gross Margin (1st Q’12): 54.6%
 Net Income (1st Q’12): US$16.6 million
 Net Margin: (1st Q’12 ) 8.2%
 Shareholders Equity (1st Q’12): US$535 million
 Total Assets (1st Q’12): US$697 million
 Cash (1st Q’12): US$90 million
Aramex Background History
Ownership
1982
1997
2002
2005
Established as a
Privately Held
Company
First Arab-based
Company on
NASDAQ
Returned to
Private
Ownership
Public on Dubai
Financial Market
Product Progression
1982
Express
Wholesale
Delivery
1984
Express
Retail
1985
Multiple
Product
Offering
1997
2004
Value Added
Services
Supply Chain
Solutions
Shareholders Value Creation
Growth in Aramex’s Value (US$ Million)
Value
900
800
700
600
500
829
400
718
726
Dec-11
Mar-12
569
300
200
185
100
0
25
1997 - Listing
on Nasdaq
65
2002- Delisting from
Nasdaq
2005- Listing
on DFM
Dec-09
Dec-10
Aramex Geographic Coverage
Aramex People
Growth in Number of Staff in the past 7 years
10,295
8,100
8,675
7,600
6,600
6,031
4,002
2005
2006
2007
2008
2009
2010
2011
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%
2008
2009
2010
Years
2011
1st Q'12
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$’000)
CAGR
9.6%
701,465
566,344
533,896
602,279
485,702
2007
2008
2009
2010
2011
Product Distribution
Change in Product Distribution
1st Q’12
2008
Logistics,
6.0%
Others,
6.1%
Logistics,
4.3%
Express,
29.1%
Others,
6.8%
Express,
32.9%
Domestic,
19.1%
Domestic,
12.6%
Freight
Forwarding,
46.2%
Freight
Forwarding,
36.9%
Geographic Distribution
Change in Geographic Distribution
1st Q’12
2008
North
America,
2.0%
North
America
2.0%
Asia, 6.5%
Europe,
20.5%
Asia 9.1%
Europe
17.0%
Middle
East &
Africa,
71.0%
Middle East
& Africa
71.9%
Gross Profit & Gross Margin
Growth in Gross Profit (US$’000)
CAGR
12.8 %
56.5%
46.8%
227,537
2007
49.9%
53.8%
282,629
301,705
324,066
2008
2009
2010
Gross Profit
Gross Margin
52.6%
368,932
2011
Net Income & Net Margin
Growth in Net Profit (US$’000)
CAGR
14.9 %
9.4%
9.2%
8.2%
6.8%
7.1%
50,179
33,097
2007
55,572
57,599
2010
2011
40,113
2008
2009
Net Income
Net Margin
Aramex PJSC Balance Sheets
All values in 000' USD
Assets
Current Assets
Cash and cash equivalents
Receivables (net)
Other current assets
2008 A
2009A
2010A
2011A
2012 - Q1
93,619
94,285
26,686
136,650
95,044
23,688
151,048
110,012
26,602
85,501
136,054
46,029
89,553
143,871
50,272
Total current assets
Non-Current Assets
Property, Plant and equipment (net)
Goodwill (net)
Other non current assets
Total non-current assets
214,591
255,382
287,662
267,584
283,695
65,449
219,311
3,102
287,862
67,232
232,377
5,435
305,044
90,438
235,037
9,435
334,910
121,266
275,039
14,862
411,167
122,854
275,039
15,133
413,026
Total assets
Liabilities, Minority Interest and Shareholders' Equity
502,452
560,426
622,572
678,751
696,721
3,894
3,185
30,816
54,802
92,697
2,437
2,037
32,248
63,290
100,012
1,869
1,828
35,165
71,720
110,582
5,295
3,268
44,444
84,522
137,529
5,067
3,209
42,540
85,827
136,644
4,293
14,324
18,617
7,884
1,760
16,516
18,276
7,663
1,771
18,585
20,356
6,692
2,624
22,321
24,945
8,433
2,355
23,139
25,494
9,223
329,467
0
6,997
158
(1,668)
362,414
0
11,143
611
(697)
398,655
0
16,956
345
(1,724)
398,655
0
23,774
(137)
(4,820)
398,655
0
23,774
0
0
0
0
(3,376)
0
0
(4,160)
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 Flow Hedge
Reserve arised from acquisition of non-controlling interest
Cash Dividends
Proposed directors fees
Retained earnings
(4,011)
(11)
(4,160)
0
0
48,300
61,005
74,086
94,532
111,114
Total shareholders' equity
383,254
434,475
484,942
507,844
525,360
Total Liabilities, minority interest and shareholders' equity
502,452
560,426
622,572
678,751
696,721