Zto Express (cayman), Inc. Class A · HKEX:2057
Zto Express (cayman), Inc. Class A — Q3 2021 Earnings Presentation
29 slides from Zto Express (cayman), Inc. Class A's earnings presentation, Nov 18, 2021
Slide 1: ZTO Express Q3 2021 Investor Relations Presentation
ZTO Express Q3 of Fiscal Year 2021 Investor Relations Presentation Nov 2021
Slide 2: Safe Harbor Statement and Disclaimer
Safe Harbor Statement and Disclaimer This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act
Slide 3: Index
Index 01 COMPANY OVERVIEW 3 Leading Express Delivery Company in China 4 Our Business: Past and Present 5 Our Distinct Network Partner Business Model (“NPM”) 6 Our Core Competitive Advantages 7 02 OUR CORE COMPETITIVE ADVANTAGES 8 Significant Market Growth Opportunities 9 Distinct Partner Network Bui
Slide 4: Company Overview
COMPANY OVERVIEW Ai TR ze ag Sada EXPRESS az ae al
Slide 5: Leading Express Delivery Company in China
Leading Express Delivery Company in China 5.7bn Parcels1 in 3Q21; 20.8% Market Share2 >99% County-Level Cities #1 #1 Covered 30,300+ ~10,500 Pickup / Delivery Line-haul Outlets Vehicles3 Top ranking consumer satisfaction among “Tongdas通达”6 since 2014 #1 market share by parcel volume in China’s e
Slide 6: Our Business: Past and Present
Our Business: Past and Present Past: Following the Lead Present: Pursuing and Surpassing First line-haul to PRC Postal Law (Revised in Acquired an additional 16 network Certified as a National High and New Included in the MSCI Completed truck across 2009) 新邮政法 legalized partners to form
Slide 7: Our Distinct Network Partner Business Model (NPM)
Our Distinct Network Partner Business Model (“NPM”) Fund flow Payment to Pickup Network Partner Payment to ZTO Express Payment to Delivery Network Partner • Line-haul transit fee Parcel flow • Full express service fee • Last-mile delivery fee • Waybill fee Fee in blue ZTO revenues • Last-mile delive
Slide 8: Our Core Competitive Advantages
Our Core Competitive Advantages Our shared success philosophy, our focus on profitability and our disciplined investment approach greatly contributed to our distinct leadership in the industry and cannot be easily replicated 1 2 8 3 4 7 6 5 7
Slide 9: Our Core Competitive Advantages
OUR CORE COMPETITIVE ADVANTAGES 02
Slide 10: Significant Market Growth Opportunities
1 Significant Market Growth Opportunities Market Opportunities Express Delivery Industry Sustainable Growth Prospect of Express Delivery Industry High-Volume Growth of Express Delivery Industry (Bn parcels) High Internet and Digital Commerce Penetration 20-24 CAGR: 17.4% 158.4 83.4 990mm 782mm Inter
Slide 11: Distinct Partner Network Built Upon a Shared-Success Philosophy
2 Distinct Partner Network Built Upon a “Shared-Success” Philosophy Our “shared-success” philosophy inspired us to enhance and transform the network partner model, and has underpinned our success Only Company to Successfully Convert Fee Sharing Mechanism Major Network Partners to Shareholders Before
Slide 12: Superior Scale & Reach
3 Superior Scale & Reach Our leading network has been built through time, investments and innovations – such scale and capabilities cannot be built overnight Largest Loyal, Customer- Express Delivery Company in China Centric & Results- Driven People with 20.8% market share1 & 22,000+ Globally2 70,00
Slide 13: Superior Scale & Reach (Cont'd)
3 Superior Scale & Reach (Cont’d) Our Multi-Functional Last-Mile Posts Strategic Importance of Last Mile Presence Self Delivering and Process Pick-Up and Receiving Customer Storage Retail Packages for Drop-Off Packages Service Space Store Couriers for Fees Improve cost-efficiency and ensure qualit
Slide 14: Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology
4 Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology Cost leadership with high operational efficiencies driven by continuous innovations Line-Haul Transportation Sorting Technologies DECREASING COST PER PARCEL (RMB) Largest self-owned line-haul fleet of ~10,400 vehi
Slide 15: Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology
4 Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology Our culture of innovation and technological focus will continue to drive value creation going forward Digital and Continuous Breakthrough in Innovative Culture Autonomous Technology INDUSTRY LEADING PROFITS Esta
Slide 16: Experienced Leadership & Sound Execution
5 Experienced Leadership & Sound Execution Stable and Entrepreneurial Management Team with Deep Industry Knowledge & Experience Meisong Lai 19 years of experience in Jianfa Lai 19 years of experience in Founder, Chairman express delivery industry express delivery industry Director and Vice & Chi
Slide 17: Consistent Achievements in Corporate Strategy
6 Consistent Achievements in Corporate Strategy We have simultaneously maintained our superior service quality, grown our market share, and sustained our profitability Superior Service Quality Increasing Market Share Sustained Profitability Market Share Income from Operations Leading Position in (%)
Slide 18: Adjacent Expansion Beyond Express Delivery
7 Adjacent Expansion Beyond Express Delivery We will continue to differentiate and enrich our service offerings, and leverage our core capabilities to consolidate resources in the logistics space Less –than-Truckload International / Cross-Border Focus on heavy cargo International express deliver
Slide 19: Sustainability Through Continuous ESG Practices
8 Sustainability Through Continuous ESG Practices1 Green Packaging Green Development E-waybills Green Transportation A single-sheet e-waybill can ⚫ By 2020, the adoption rate of ⚫ ZTO increases use of high By 2020,~7,900 ~ save 45% thermal paper e-waybills in the whole network had reached 99.93% cap
Slide 20: Sustainability Through Continuous ESG Practices (Cont'd)
8 Sustainability Through Continuous ESG Practices 1 (Cont’d) Green Objectives Stringent Corporate Governance Strict Internal Control ⚫ ZTO takes an active role and has set up the overall green development objective based on the requirements of State Post Bureau. In 2020, ⚫ Board of Directors has cle
Slide 21: Sustainability Through Continuous ESG Practices (Cont'd)
8 Sustainability Through Continuous ESG Practices 1 (Cont’d) Consolidating Business Management and Governance Safeguarding Labor Rights ⚫ Strengthening Procurement ⚫ Equality & Diversity Management By referring to International Labour ZTO attaches great importance to Organization conventions, ZTO’s
Slide 22: Financial Overview
FINANCIAL OVERVIEW 03
Slide 23: Strong Unit Economics
Strong Unit Economics (RMB/Unit) Non-GAAP Operating Profit ASP3 0.46 0.49 1.77 0.36 1.63 1.52 1.41 = 0.29 1.29 1.33 1.34 1.21 1.24 0.27 0.25 0.25 0.24 0.20 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
Slide 24: Robust Parcel Volume and Revenue Growth
Robust Parcel Volume and Revenue Growth Parcel Volume Total Revenue (Parcel volume in millions) (RMB million) 40% 14% YoY YoY Growth 26% Growth 42% 17,003 YoY 25,214 YoY Growth Growth 22,110 12,121 17,604 8,524 2018 2019 2020 2018 2019 2020 Quarterly Parcel Volume Quarterly Revenue (Parcel volume in
Slide 25: Strong Profitability and Margins
Strong Profitability and Margins Income from Operations and Margin Net Income and Margin (RMB million) (RMB million) Year-over-Year Growth Year-over-Year Growth 28% 34% -51% 10% -17% -13% 70% -12% 16% 23% 81% -46% 6% -7% -44% 44% -12% -5% 26.6% 26.4% 25.7% 33.8% 19.0% 19.9% 18.4% 24.8% 18.2% 1,647 1
Slide 26: Continuous Cost Efficiencies and Productivity Gains
Continuous Cost Efficiencies and Productivity Gains Cost of Revenues - Breakdown Gross Profit and Margin (RMB million) (RMB million) 561 266 301 1,121 436 447 911 954 316 109 30.3% 29.2% 27.6% 417 905 820 98 92 20.9% 21.00% 22.5% 22.80% 21.2% 726 75 16.9% 130 853 95 1,651 1,996 265 1,613 1,636 1,769
Slide 27: Abundant Cash Reserves Supports Continued Investment in Growth
Abundant Cash Reserves Supports Continued Investment in Growth Operating Cash Flow Capital Expenditure Cash and Cash Equivalent1 (RMB million) (RMB million) (RMB million) 37% 21% 76% 15% Decline Decline Growth Growth 6,304 9,208 22,6942 1,971 19,8782 4,951 6,277 17,337 5,532 8 21% 17% 133 14,267 5,2
Slide 28: Reconciliation of GAAP to Adjusted / Non-GAAP Measures
Reconciliation of GAAP to Adjusted / Non-GAAP Measures Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 Adjusted EBITDA RMB ‘000 RMB ‘000 RMB ‘000 RMB ‘000 RMB ‘000 RMB ‘000 RMB ‘0
Slide 29: Thank You
THANK YOU 28