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Page 0 APL Logistics Corporate Seminar 2006. Page 1 APL Logistics’ Core EBIT Margin Trend Highest margins in 4 years Margins to 4.6% in 2005 ROCE at 11%

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Presentation on theme: "Page 0 APL Logistics Corporate Seminar 2006. Page 1 APL Logistics’ Core EBIT Margin Trend Highest margins in 4 years Margins to 4.6% in 2005 ROCE at 11%"— Presentation transcript:

1 Page 0 APL Logistics Corporate Seminar 2006

2 Page 1 APL Logistics’ Core EBIT Margin Trend Highest margins in 4 years Margins to 4.6% in 2005 ROCE at 11% Targeting 15% in 3 years

3 Page 2 APL Logistics Revenue and Core EBIT Core EBIT GrowthRevenue Growth

4 Page 3 Keys to Success in 2005 Revenue Growth of 12% Focus on Origin Services and IFS - $79 Million Improvement Global Contract Logistics - $49 Million Improvement EBIT Margins improved 74% WMS Financial Discipline, Rigorous Cost Controls, Improved Asset Utilization Termination of unprofitable business Multi-User Facility Utilization exceeded 94% up from 89% previous year IFS – Revenue and Customer Growth Continued Investment in this segment IMS/TMS – Underlying service cost pressures Fuel Surcharges and Transportation rate increases

5 Page 4 IT Systems, Capabilities and Stability Be the Industry Leader in Quality Logistics Solutions Organization Change and Roll-Out Innovate Solutions addressing Key Supply Chain Challenges Deliver Business Outcomes in’06 Building the Foundation in ‘06 Differentiate Liner with Logistics as The Competitive Advantage in managing the Customers Supply Chain Create Value & Ensure Operational Excellence Consol Optimization Product Customization Supplier Management Deconsol Customs Clearance Port-to-Port Conveyance Customs Clearance Freight Brokering Final Delivery Reverse Logistics Execute Go-To-Market Strategy Logistics Product Review and Final Alignment APL Logistics Productivity Improvement NOL Group Rev Income APLL Revenues and EBIT Redefine Logistics Business IT Requirements 40% APLL Business on APL Assets. 50 New Joint Liner/Logs Acct 15 SAM Accts Verify Customer SC Challenges to Change the Game Develop 3 new Products in 2006 KPI Alignment and value recognition Complete Vertical Study (4) Main and Solutions Roadmap Holistica to Deliver 2 Customers Accomplish Business Priorities within Budget Cost Savings Targets Generate Incremental Rev Acquire Airfreight and Deconsol Capabilities Develop our Talent and Expertise in the Logistics Organization Creating and Sustaining Competitive Advantage

6 Page 5 Industry Leadership in Quality Solutions Differentiate Liner – Develop the Premium Innovate Solutions Innovate -Develop New Products and Services (Int’l Service Focus) Develop Industry Vertical Customer Specific Solutions Create and Implement New Pricing Strategies Value Add to Liner Offerings with Logistics Capabilities Achieve Low Service Time Variability - Predictability Shorter Transit Times E2E - Velocity Real Time Information - Visibility Integrated Offerings to Enhance Control & Simplicity - Flexibility Value & Operational Excellence Financial Performance for the Group Value to Customer Supply Chain Stronger analytical capabilities Reporting Next generation IT platform Create Sustainable Advantage

7 Page 6 Building the Foundation in ‘06 Organization Change and Roll-Out

8 Page 7 Building the Foundation in ‘06 Organization Change and Roll-Out

9 Page 8 Building the Foundation in ‘06 Organization Change and Roll-Out

10 Page 9 Building the Foundation in ‘06 Organization Change and Roll-Out Regional Changes and Organizations have been rolled out as of February 1 st.

11 Page 10 Building the Foundation - Talent Develop our Talent and Expertise in the Logistics Organization Training We must train our teams to Sell All Services We must train our teams to Add Value We must train our teams to sell Value Added We must train our teams to X-Sell We must Integrate our Sell Develop Expertise We must understand our customers’ Supply Chain Challenges We must develop vertical expertise and address those Challenges We must innovate with solutions for selective verticals and customers We must Challenge ourselves to Get Ahead of The Customers Curve

12 Page 11 Liner and Logistics – Go To Market 1.The Coordinated APL/APLL Sell Target list of customers to cross sell APL and APLL products/services List to be developed collaboratively between APL/APLL at the District Level To Be Completed By March 17 th. APL/APLL Then Goes to Market 2. The Combined Sell Target List of Customers to sell Combined (Bundled Services) APLL Invoiced on APL Liner Assets. List to be developed same as above To Be Completed By March 17 th APL/APLL Then Goes to Market 3. LCL – Standard Product Re-launch Target list of customers to re-sell on APLL/APL LCL Service List to be developed from both origin and destinations (TP Product Only for Now) To Be Completed by March 17th…..Re-Launch Scheduled for April 1st APL/APLL Then Goes to Market 4. Focused Expansion and Growth Sell IFS to sell into new markets and Geographies in advance of Liner Network Capabilities APLL is selling today – Generate Leads from APL Liner Customers 5. Spot Utilization and IFS Growth Sell APLL Has Gone to Market Target non-APL Liner customers to grow APLL IFS business profitably. This business would be utilized as “spot” filler for APL in the event of cargo shortfalls. Rules of Engagement are in Place. APLL Has Gone to Market

13 Page 12 IT Systems Capabilities and Innovation New Capabilities Future Requirements GFF – MU3 in Pilot Yantra – New WMS Platform 2006 eDoc – Coming in 2006 Vendor DeskTop – Needed to play in the Consol Space Intermodal Agent System Driving IT Strategy from within the Business Vertical Solutions – Cutting Edge Technology Innovation Business involvement in driving IT Strategy We will need to invest in our IT Future Continuous IT Improvement as a differentiator The customer needs to be “Wow’d” Working the Opportunities

14 Page Logistics KPI’s Phase in Strategic Account Management Program 15 Accounts in 2006 Joint Liner/Logistics Customer Targets – Incremental Revenue 2006 Decide on Verticals, Strategies, Capabilities and Structures By end 2 nd Quarter Develop Vertical Capabilities and Expertise Build a Solid Customer Pipeline in each Vertical Execute Liner/Logistics Go-To-Market Strategy Differentiate Liner with Logistics as a competitive advantage Improve Cross Shares % Review and Refine our Business/Product Strategies

15 Page Must Do’s Leveraging our capabilities across lines of business – Coordinate and Execute Strategy Customers - Logistics to Liner and Liner to Logistics Operations – Transportation, Facilities and Back Room Functions Total Commitment to Integration – “We have not yet got this right” Develop Business Model around Logistics Engineering Product Controlling and reducing Costs Managing the Business with Regional Focus – P&L Accountability Build The Regional Pipeline - Accelerate Sales Training & Integrate


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