Cargojet Inc. · TSX:CJT
Cargojet — Investor Presentation (July 2021)
36 slides from Cargojet's investor presentation, Jul 30, 2021
Slide 1: Corporate Overview July 2021
Corporate Overview July 2021
Slide 2: Caution Concerning Forward Looking Statements
Caution Concerning Forward Looking Statements This presentation includes certain forward-looking statements that are based upon current expectations which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein
Slide 3: Agenda
Agenda • Who we Are • Business Model • Ambition and Strategy • Key Market Segments • Domestic Business • ACMI Business • Adhoc Charter Business • Fleet Plan • Financial Highlights • Business Outlook • Reference Material 3
Slide 4: Who We Are
Who We Are • Entrepreneurial company that prides itself in building lasting customer relationships while delivering exceptional service • Engaged and passionate workforce of 1,300 with over $650 million in revenues • In less than 20 years, we have become Canada’s #1 cargo airline, only national over
Slide 5: Business Model
Business Model • Only national network that enables next day service for courier industry to over 90% of Canadian population, a strong competitive advantage • Entrepreneurial mindset: allows speed to market, responsiveness and sharp focus on network optimization and cost management • Long-term custo
Slide 6: Ambition and Strategy - Pillars
Ambition and Strategy - Pillars 1. Build the most efficient “middle-mile” air capability to allow couriers and logistics players to fulfil their time-sensitive “next-day” delivery promise. 2. Identify high growth areas and aggressively pursue opportunities that allow network and fleet optimization t
Slide 7: Ambition and Strategy - Tactics
Ambition and Strategy - Tactics 1. Maintain e-Commerce leadership (B2B and B2C) – Backbone for all time-sensitive deliveries across Canada for all major logistics and courier players – Cargojet is the de-facto enabler of e-commerce in Canada – Cargojet reaches 90% of Canadian population through its
Slide 8: Ambition and Strategy - Tactics
Ambition and Strategy - Tactics 3. Continue to optimize fleet utilization by building both day and week- end networks including Charters and ACMI model. 4. Opportunistically utilize west-to-east lanes for non-courier freight opportunities (Asia inbound) and E-commerce growth. 5. Exploit adjacent rev
Slide 9: Key Market Segments
Key Market Segments We serve three key market segments: • Domestic Network (includes Surcharges, Interline and Newark/Bermuda route) • ACMI (Aircraft, Crew, Maintenance and Insurance) primarily dedicated scheduled routes • “All-in Charter” primarily adhoc business 2020 2019 Revenue by Cargo Services
Slide 10: Domestic Business - Network
Domestic Business - Network Cargojet operates its network across North America transporting Over 25 million pounds of time-sensitive cargo weekly Westbound Flights Eastbound Flights Cargojet operates over 80 flight legs each business night using a combination of B767-300F; B767-200F and B757-200F ai
Slide 11: Domestic Business – the Growth of E-Commerce
Domestic Business – the Growth of E-Commerce • Sources: Statistics Canada, US Census Bureau and the UK Office for National Statistics 11
Slide 12: Growth of E-Commerce – Canada Only
Growth of E-Commerce – Canada Only E-Commerce Stats Source: Statistics Canada 12
Slide 13: Domestic Business - Customers
Domestic Business - Customers • Approx. 75% of Domestic Revenues are under long-term contracts • All contract include variable surcharges for uncontrollable cost changes (e.g. fuel and regulatory changes) • All contracts have guaranteed volume minimums • All contracts have CPI-based automatic annual
Slide 14: Domestic Business - Alliances
Domestic Business - Alliances • Fifty-Four international Alliances/Partnerships with the world’s leading carriers • Allows these carriers to extend their networks • Expands Cargojet’s brand globally 14
Slide 15: Domestic Business - OTP
Domestic Business- OTP 105.0% 100.0% 98.8% 98.8% 98.4% 97.3% 97.6% 96.2% 95.0% 90.0% 85.0% 80.0% 75.0% Q1 Q2 Q3 Q4 2018 2019 2020 2021 • Cargojet must demonstrate operational excellence each and every night to maintain industry leading on-time performance; • Cargojet is ISO 9001-2008 and IATA Operat
Slide 16: ACMI Business
ACMI Business • Cargojet currently operates 10 dedicated ACMI routes for DHL: • 5 Cross-Border Routes between DHL’s hub at CVG airport and major airports in Canada • 3 Routes that operate between airports in Mexico and CVG. The most recent route started at the end of Q3 2020. • 2 New Routes that ope
Slide 17: Adhoc Charter Business
Adhoc Charter Business • Cargojet utilizes the same aircraft that operate in its Domestic and ACMI networks on weekends and daytime for Adhoc charters and scheduled some charters on weekends. • Cargojet is competitive in the adhoc market due to the fact that its fixed costs are already covered by it
Slide 18: Fleet Plan
Fleet Plan All-cargo aircraft operated by Cargojet Payload 2021 2022 2023 Type (lbs) 2018 2019 2020 Plan Proj. Proj. B767-300 125,000 11 12 14 15 20 20 B767-200 100,000 1 1 3 3 3 4 B757-200 80,000 8 8 8 9 9 9 B777-300 224,000 - - - - - 2 Total 21 21 25 27 30 35 18
Slide 19: Financial Highlights
Financial Highlights 19
Slide 20: Quarterly Revenue and Adjusted EBITDA
Quarterly Revenue and Adjusted EBITDA $250 $100 $90 $196 $200 $188 $80 $172 Adjusted EBITDA (in $millions) $162 $160 $70 Revenue (in $millions) $150 $140 $60 $133 $123 $118 $119 $117 $114 $110 $50 $109 $99 $87 $100 $87 $88 $89 $80 $40 $70 $67 $64 $30 $51 $45 $50 $37 $40 $40 $20 $33 $36 $29 $32 $25 $
Slide 21: Cargojet Has Achieved New Levels of Revenue & Cashflow
Cargojet Has Achieved New Levels of Revenue & Cashflow $800 $350 $669 $682 $700 $300 Adjusted EBITDA (in $millions) $600 $487 $250 Revenue (in $millions) $455 $500 $383 $200 $400 $331 $289 $288 $150 $282 $300 $100 $200 $156 $128 $110 $50 $100 $93 $36 $- $- 2015 2016 2017 2018 2019 2020 2021 TTM Adju
Slide 22: Domestic Revenues
Domestic Revenues 140.0 120.0 37.3 Revenue (in $millions) 100.0 33.6 34.8 33.4 31.2 22.2 80.0 27.8 27.8 27.8 26.8 28.5 25.1 13.3 24.9 60.0 88.9 40.0 74.4 75.5 76.6 79.7 71.4 64.8 66.3 69.3 60.9 60.5 61.1 63.8 56.0 20.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2018 2019 2019 2019
Slide 23: ACMI and Adhoc Charter Revenues
ACMI and Adhoc Charter Revenues 120.0 100.0 Revenue (in $millions) 80.0 77.4 60.0 23.8 13.0 10.2 17.5 40.0 9.8 7.3 43.2 20.0 10.9 10.4 6.5 7.2 5.6 37.1 38.7 37.2 8.8 32.7 7.0 14.3 15.4 15.8 16.0 19.1 19.4 9.4 10.3 12.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2018 2019 2019 2019
Slide 24: Market Cap & Stock Price
Market Cap & Stock Price 4000 250 3500 200 3000 2500 150 2000 100 1500 1000 50 500 0 0 2015 2016 2017 2018 2019 2020 29-Jul-21 Market Cap Stock price Cargojet was added to the TSX S&P index in 2019. 24
Slide 25: Cargojet Debt at June 30, 2021
Cargojet Debt at June 30, 2021 In Millions Aircraft and Other Leases $119 Hybrid Debentures $306 • Total debt is approx. 1.5x trailing 12-month Adjusted EBITDAR. • Cargojet increased its Syndicated Revolver borrowing limit from $400M to $600M in 2020 and issued an additional $115M of Hybrid Debentur
Slide 26: Business Outlook
Business Outlook • Long term customer contracts generate 75% of annual revenues with renewal options. • Highly engaged workforce with a strong safety culture continues to be the backbone of our service offerings. • We are well positioned to benefit from long-term secular trends in e-commerce serving
Slide 27: Cargojet's ESG Policy
CARGOJET’s ESG POLICY 27
Slide 28: Cargojet's ESG Policy - Summary
Cargojet’s ESG Policy - Summary 2 Key Updates to Policy = Builds on Cargojet’s existing ESG policy = Focuses on position statements for key environmental, social and governance topics based on ESG best-practices, with activity-based information moved to Cargojet’s ESG Report + Includes scope and own
Slide 29: ESG Considerations — Research Analyst Perspectives
CARGQSET) ESG Considerations — Research Analyst Perspectives 2 Environmental Social Governance Other Considerations North American Airlines @aicanaoa ADELTA jetBlue united 3 ines ‘American Airlines “4, Southwest Package & Courier amazon boos} FedEx Maximizing fuel efficiency, reducing GHG emissions
Slide 30: Reference Material
Reference Material 30
Slide 31: Air Cargo Industry Memberships
Air Cargo Industry Memberships ISO 9001:2000 Quality Certified Company International Air Transport Association The International Air Cargo Association Canadian Courier & Logistics Association 31
Slide 32: Awards
AWARDS 2010 - “Carrier of Choice” – Shipper’s Choice Award 2006 - “Cargo Airline of the Year” – Shipper’s – Cargojet awarded as Canada’s Cargo Airline and Choice Award – Cargojet awarded as Canada’s 2019 - “Carrier of Choice” – Shipper’s Choice Award Carrier of Choice for 2010 by the Canadian Cargo
Slide 33: Boeing 767-300ERF
Boeing 767-300ERF • Maximum Payload: 125,000 lbs
Slide 34: Boeing 767-200ERF
Boeing 767-200ERF • Maximum Payload: 100,000 lbs 34
Slide 35: Boeing 757-200ER
Boeing 757-200ER • Maximum Payload: 80,000 lbs 35
Slide 36: Thank You.
Thank You.