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Aramex PJSC Investor Presentation. 3rd quarter 2011. Company Profile Company Structure Strategic Direction Financial Analysis. Aramex Quick Overview. Highlights. Background. Established: 1982, 27 years in operation

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Presentation Transcript
slide1

Aramex PJSC

Investor Presentation

3rd quarter 2011

slide2

Company Profile

  • Company Structure
  • Strategic Direction
  • Financial Analysis
aramex quick overview
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 8,675 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 2010

  • Revenue (2010): US$602 million
  • Gross Margin (2010): 54%
  • Net Income (2010): US$55.57 million
  • Net Margin: 9.2%
  • Shareholders Equity (2010): US$492 million
  • Total Assets (2010): US$623 million
  • Cash (2010): US$151 million
  • Revenue (3rd Q'11): US$177 million
  • Gross Margin (3rdQ'11): 52%
  • Net Income (3rd Q'11): US$13.1 million
  • Net Margin: 7.4%
  • Shareholders Equity (3rd Q'11): US$500 million
  • Total Assets (3rd Q'11): US$640 million
  • Cash (3rd Q'11): US$118 million

Financial Performance

3rd Q’11

aramex background history
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

1984

1985

1997

2004

Express Wholesale Delivery

Express Retail

Multiple Product Offering

Value Added Services

Supply Chain Solutions

shareholders value creation
Shareholders Value Creation

Growth in Aramex’s Value (US$ Million)

aramex people
Aramex People

Growth in Number of Staff in the past 6 years

sustainability
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.
slide9

Company Profile

  • Company Structure
  • Strategic Direction
  • Financial Analysis
asset light model
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
The Aramex Model

Highlights

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

Global Services Office

  • Manages interaction among members of the federation
  • Sets policies, procedures, & monitors compliance
  • Provides marketing, network infrastructure & IT infrastructure

Area Boards

  • 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
the aramex model1
The Aramex Model

Highlights

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

  • Customer centric and dedication to service excellence
  • Decentralized and flat organization
  • Trust based system that empowers the front line
slide13

Company Profile

  • Company Structure
  • Strategic Direction
  • Financial Analysis
vision to enable and facilitate regional global trade commerce
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
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

  • 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.
  • 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.
  • 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
Expansion through Acquisitions

Advantage

Highlights

Performance

  • 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.

Financial

  • 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.

Management / Employees

leveraging existing infrastructure
Leveraging Existing Infrastructure

Highlights

Expansion of Warehousing Facilities

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

Acquisition

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.

New Product Development

slide18

Company Profile

  • Company Structure
  • Strategic Direction
  • Financial Analysis
revenue
Revenue

Growth in Revenue (US$’000)

CAGR

12.9%

slide20

Product Distribution

Change in Product Distribution

3rd Q’11

2006

slide21

Geographic Distribution

Change in Geographic Distribution

2006

3rd Q’11

gross profit gross margin
Gross Profit & Gross Margin

Growth in Gross Profit (US$’000)

CAGR

17.72 %

net income net margin
Net Income & Net Margin

Growth in Net Profit (US$’000)

CAGR

21.0%