Cargojet Inc. · TSX:CJT
Cargojet — Q3 2024 Earnings Presentation
34 slides from Cargojet's earnings presentation, Nov 5, 2024
Slide 1: Corporate Overview
Corporate Overview September 2024
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 ▪ All-in Charter Business ▪ Fleet Plan ▪ Financial Highlights ▪ Business Outlook ▪ ESG Policy ▪ Reference Material
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 over 1,800 with over $900 million in revenues ▪ In 22 years, we have become Canada’s #1 cargo airline, only national overnight
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 ▪ Continue to optimize fleet utilization by building both day and week- end networks including Charters and ACMI model ▪ Exploit adjacent revenue opportunities by offering ground-handling capabilities to third party shippers ▪ Build the best fleet to allow cost advant
Slide 9: Key Market Segments
Key Market Segments ▪ Domestic Network ▪ CMI – Crew, Maintenance, Insurance ▪ ACMI (Aircraft, Crew, Maintenance and Insurance) primarily dedicated scheduled routes ▪ “All-in Charter” primarily adhoc business ▪ International Cargo Service
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 Cargojet operates over 80 flight legs each business night using a combination of B767-300F; B767-200F and B757-200F aircraft to over 16 cities
Slide 11: Domestic Business - Customers
Domestic Business - Customers ▪ Overnight network reaching 90% of the Canadian population 24/7 ▪ Approx. 75% of Domestic Revenues are under long-term contracts with renewal options Our standard customer contracts include: ▪ Surcharges for uncontrollable cost changes ▪ Guaranteed volume minimums ▪ CP
Slide 12: International Alliances
International Alliances ▪ Fifty-Four international Alliances/Partnerships with the world’s leading carriers ▪ Allows these carriers to extend their networks ▪ Expands Cargojet’s brand globally
Slide 13: Domestic Business - OTP
Domestic Business- OTP 120.0% 99.6% 98.7% 99.7% 99.1% 99.5% 98.7% 99.5% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Q1 Q2 Q3 Q4 2020 2021 2022 2023 2024 ▪ Cargojet must demonstrate operational excellence each and every night to maintain industry leading on-time performance; ▪ Cargojet is ISO 9001-2008 and I
Slide 14: ACMI Business
ACMI Business Cargojet currently operates 17 dedicated ACMI aircraft on a long-term contract basis and 2 aircraft on an interchange basis with 21 Air. ▪ 6 x Trans-Border Routes between DHL’s hub at Cincinnati airport and major destinations in Canada ▪ 4 x Routes that operate between major airports i
Slide 15: All-in Charters
All-in Charters ▪ Utilizing our existing fleet that operate in its Domestic and ACMI networks on weekends and daytime for Adhoc charters ▪ Competitive in the Adhoc market pricing due to utilization of existing fixed costs are already covered by its Domestic and ACMI businesses ▪ Lack of consistency
Slide 16: Fleet Plan
Fleet Plan All-cargo aircraft operated by Cargojet 2024 2025 2026 Type Payload (lbs.) 2020 2021 2022 2023 Proj. Proj. Proj. B757-200 80,000 8 9 13 17 17 17 17 ER B767-300 125,000 14 16 18 21 21 23 23 ER B767-200 100,000 3 3 3 3 3 2 2 ER Total 25 28 34 41 41 42 42
Slide 17: Financial Highlights
Financial Highlights ee
Slide 18: Quarterly Revenue and Adjusted EBITDA
Quarterly Revenue and Adjusted EBITDA $300 $100 $267 $247 251 $90 $234 $236 $233 246 $250 $232 231 $214 231 $80 $210 Adjusted EBITDA (in $millions) $196 $70 189.5 Revenue (in $millions) $200 $188 $172 $162 $160 $60 $150 $50 $123 $91 $87 $80 $83 $81 $82 $83 $82 $82 $40 $78 $79 $75 $74 $70 $71 $70 $10
Slide 19: Entering a More Normalized, Sustainable Free Cash Flow Phase
Cargojet Is Entering A More Normalized, Sustainable and Attractive Free Cash Flow Phase ▪ Cargojet completed the sale of the four remaining B777 aircraft ▪ Cargojet currently has two B767 passenger-to-freighter conversion in process, one of which will be used to replace one B767 aircraft under lease
Slide 20: Domestic Revenues and Surcharge Revenues
Domestic Revenues and Surcharge Revenues 200.0 180.0 160.0 Revenue (in $millions) 140.0 72.5 51.4 120.0 62.9 55.6 61.0 50.2 40.2 50.5 36.3 39.5 100.0 37.7 80.0 60.0 91.9 102.5 101.2 93.7 40.0 83.4 87.9 84.0 80.7 89.1 90.0 89.4 20.0 0.0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Slide 21: ACMI and All-In Charter Revenues
ACMI and All-In Charter Revenues 120.0 100.0 41.5 Revenue (in $millions) 32.8 80.0 27.3 19.9 43.5 27.6 14.6 27.0 20.2 26.5 25.9 60.0 40.0 69.1 65.7 71.1 69.1 70.2 61.7 63.3 64.4 62.7 64.6 52.7 20.0 0.0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 ACMI All-I
Slide 22: Market Cap & Stock Price
Market Cap & Stock Price $4,000 $250 $3,500 $200 $3,000 $2,500 Market Cap $150 $2,000 $100 $1,500 $1,000 $50 $500 $0 $0 2017 2018 2019 2020 2021 2022 2023 Sep-24 Axis Title Market Cap Stock Price Cargojet was added to the TSX S&P index in 2019. At the end of Q3 2024, Cargojet share price was of $138
Slide 23: Cargojet Debt at September 30, 2024
Cargojet Debt at September 30, 2024 Aircraft and Other Leases In Millions $105 Borrowings $ 371 Hybrid Debentures $228 ▪ Cargojet has a syndicated revolving credit facility with borrowing limit of $600M, with maturity date on July 22, 2027. ▪ Cargojet repaid $106.9 million in debt during the nine mo
Slide 24: 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 b
Slide 25: Cargojet's ESG Policy
Cargojet’s ESG Policy LITA
Slide 26: ESG Policy Summary
ESG Policy Summary 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 move to Cargojet’s ESG Report ▪ Includes scope and ownership stateme
Slide 27: ESG Considerations – Research Analyst Perspectives
ESG Considerations – Research Analyst Perspectives Environmental Social Governance Other Considerations North American Cargo ▪ Maximizing fuel ▪ Focus on strong ▪ Leadership programs ▪ Looking to improve on efficiency, reducing workplace practices, in place with a focus on ESG documentation in GHG e
Slide 28: Reference Material
Reference Material ee
Slide 29: Air Cargo Industry Memberships
Air Cargo Industry Memberships Canadian Courier & Logistics Association International Air Transport Association The International Air Cargo Association ISO 9001:2015 Quality Certified Company
Slide 30: Awards
Awards Cargojet has been awarded as Canada’s Cargo Airline and Carrier of Choice by the Canadian Transportation and Logistics Magazine for several years. “2020 Strategist of the Year” Globe and Mail Report on Business Award Recipient Dr. Ajay Virmani 2023 Order of Ontario “Outstanding Business Dr. A
Slide 31: Boeing 767-300ERF
Boeing 767-300ERF Maximum Payload: 125,000 lbs
Slide 32: Boeing 767-200ERF
Boeing 767-200ERF Maximum Payload: 100,000 lbs
Slide 33: Boeing 757-200ERF
Boeing 757-200ERF Maximum Payload: 80,000 lbs
Slide 34: Thank-you
CARGOVET. Thank-you “ANS SS 4