2Company Profile Company Structure Strategic Direction Financial Analysis
3Aramex Quick Overview Highlights BackgroundEstablished: 1982, 27 years in operationHubs: Main hubs in Amman, Dubai, Hong Kong, Liege, London, New York and Singapore.Offices: 309 offices in 200 major cities worldwideStaff: Over 10,295 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.Financial PerformanceYear 2011Revenue (2011): US$701 millionGross Margin (2011): 53%Net Income (2011): US$57.6 millionNet Margin: 8.2%Shareholders Equity (2011): US$516 millionTotal Assets (2011): US$679 millionCash (2011): US$86 millionRevenue (3rd Q'12): US$208 millionGross Margin (3rd Q'12): 53.0%Net Income (3rd Q'12): US$14.5 millionNet Margin: (3rd Q'12 ) 7.0%Shareholders Equity (3rd Q'12): US$542 millionTotal Assets (3rd Q'12): US$716 millionCash (3rd Q'12): US$75 millionFinancial Performance3rd Q’12
4Aramex Background History Ownership1982199720022005Established as a Privately Held CompanyFirst Arab-based Company on NASDAQReturned to Private OwnershipPublic on Dubai Financial MarketProduct Progression19821984198519972004Express Wholesale DeliveryExpress RetailMultiple Product OfferingValue Added ServicesSupply Chain Solutions
5Shareholders Value Creation Growth in Aramex’s Value (US$ Million)
7Aramex PeopleGrowth in Number of Staff in the past 7 years
8Awards & Recognitions www2.dfm.ae 2007 2008 2009 2010 2011 Highlights - Retail Project Award (Shop &Ship product)- Global Mail Awards- 3rd Party Logistics Provider of the Year, SCATA- Best Environmental Practices, International Green Apple Awards20082009- Environment Award, BIFAOutstanding Achievement of the year Award, SCATAExpress Logistics Provider of the Year, SCATABest Quality Assurance Program, Middle East Call Center Awards2010The Aramex team won the Best Small Call Center at the Call Center Awards 2011 in the UAE.Special Services Award at the 2011 BIFA Awards in London, UK. Most Improved Website - consumer and lifestyle – at the Internet Awards Middle East in Dubai, UAE.Nominated for the Best Social Media Company by Mashable, in Las Vegas, Nevada.Aramex in Ireland and the UK get recognized at the IFW Awards as highly commended road freight operator.2011
9Key Sustainability Issues Aramex is one of the first companies in the region to report on its sustainable business practicesKey Sustainability IssuesCommunity 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.
10Company Profile Company Structure Strategic Direction Financial Analysis
11Asset Light ModelAramex 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.
12The Aramex Model Federal System Front Line Global Services Office HighlightsFederal SystemFront LineFederation of interdependent companies, that function as an independent unit managed by a local CEOEach unit sets its own business plans, objectives and budgets in line with the corporate strategyGlobal Services OfficeManages interaction among members of the federationSets policies, procedures, & monitors complianceProvides marketing, network infrastructure & IT infrastructureArea BoardsAramex 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 …etcArea boards are responsible for the area’s strategic direction, budgeting, performance, and operations
13The Aramex Model Culture and Values Unique Corporate Culture HighlightsCulture and ValuesUnique Corporate CultureBelief that people are Aramex’s most significant asset.Encouraging creativity, innovation and entrepreneurship.Empowering employees through continuous development & training.Promotion from withinCommitted to economic and social development as well as environmentally friendly practices.Key ValuesCustomer centric and dedication to service excellenceDecentralized and flat organizationTrust based system that empowers the front line
14Company Profile Company Structure Strategic Direction Financial Analysis
15Vision: 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.
16Regions 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 expansionAfrica 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.
17Expansion through Acquisitions AdvantageHighlightsPerformanceProfitable 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.FinancialExperienced management teams that are willing to continue post acquisitionTrack history of having met projections and budgetsDiversified client base with minimal reliance on top clients or on network of agentsNot part of or affiliated with an already established networkStrong corporate culture that is in line with Aramex’sAbility to change and incorporate the Aramex Accounting and IT systems.Management / Employees
18Franchising Opportunities Aramex can offer potential franchisees its established IT systems technology that is capable of running multiple transportation products using latest internet based technology. In addition the Aramex independent international network and brand can provide opportunities for growth to local and regional transportation companies looking to offer a global service.At the same time, Aramex can benefit from the local knowledge of such independent local companies to facilitate market entry, grow its revenue base, expand its brand awareness and improve service offering.As part of the franchise program, Aramex has the ability to acquire a majority stake at favorable valuations which will provide attract acquisition targets.
19Leveraging Existing Infrastructure HighlightsExpansion of Warehousing FacilitiesSupply 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 facilitiesAcquisitionThere 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
20Company Profile Company Structure Strategic Direction Financial Analysis