Allcargo Logistics Limited · NSE:ALLCARGO
Allcargo Logistics — Investor Presentation (September 2022)
51 slides from Allcargo Logistics's investor presentation, Sep 12, 2022
Slide 1: Covering letter to stock exchanges
To, To, Manager-Department of Corporate Services Manager - Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G Dalal Street, Fort, Bandra Kurla Complex, Mumbai – 400 001 Bandra (East), Mumbai – 400 051 BSE Scrip Code: 532749
Slide 2: Allcargo Logistics Transformational Growth & Path Ahead
ALLCARGO LOGISTICS TRANSFORMATIONAL GROWTH & PATH AHEAD ANALYST MEET | SEPTEMBER 2022
Slide 3: Safe Harbor
SAFE HARBOR This presentation and the accompanying slides (the “Presentation”), which have been prepared by ALLCARGO LOGISTICS LIMITED (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any se
Slide 4: Allcargo Logistics Transformational Growth & Path Ahead
ALLCARGO LOGISTICS TRANSFORMATIONAL GROWTH & PATH AHEAD ANALYST MEET | SEPTEMBER 2022
Slide 5: Decoding Exponential Growth
DECODING EXPONENTIAL GROWTH VS PARTHASARATHY VICE CHAIRMAN 4
Slide 6: Transformation Led Growth
TRANSFORMATION LED CONSOLIDATED REVENUE 35% CAGR 3.3x (FY18 - FY22) CONSOLIDATED EBITDA 42% CAGR 4.0x (FY18 - FY22) Gati Transformation Finance Transformation ECU Transformation IT Transformation FY18 FY19 FY20 FY21 FY22 Revenue EBITDA GROWTH EBITDA (TTM) CASH PROFIT (TTM) ROCE* (TTM) ₹ 1,732 Cr ₹ 1
Slide 7: Consistently Outperforming the Market
CONSISTENTLY OUTPERFORMING THE MARKET SIGNIFICANT DELTA OVER MARKET GROWTH (% YoY) LIMITED IMPACT OF FREIGHT RATES ($) ^CY *FY $/TEU % YoY 2018 2019 2020 2021 2022e 2020 2021 2022 Q12023 World GDP^ Global Trade Volume Growth^ Allcargo ISC Annual Volume Growth* World Container Index Allcargo ISC Reve
Slide 8: Onward to >4x Growth in Value
ONWARD TO >4x GROWTH IN VALUE MANAGEMENT ASPIRATION FOR 2026 EXPRESS + INTERNATIONAL OTHER 2026 SUPPLY CHAIN CONTRACT BUSINESSES TOTAL (₹ cr) LOGISTICS REVENUE 20,000 - 25,000 2,700 - 3,500 1,500 - 2,000 25,000 - 30,000 EBIDTA 1,700 - 2,000 400 - 500 300 - 350 2,400 - 2,700 7
Slide 9: Drivers of Growth
DRIVERS OF GROWTH MARKET MULTIPLE VALUE LEADERSHIP LEVERS ACCRETIVE BY FAR FOR GROWTH M&A DIGITAL FIRST EXCEPTIONAL PEOPLE APPROACH RETURN ON FIRST CAPITAL APPROACH 8
Slide 10: Market Leadership by Far
MARKET LEADERSHIP BY FAR ADARSH HEGDE JOINT MANAGING DIRECTOR 9
Slide 11: Global Leader in International Supply Chain
GLOBAL LEADER IN INTERNATIONAL SUPPLY CHAIN FCL World’s MARKET LEADERSHIP #1 14% 40,000 IN LCL PROVIDES A AIR STRONG BASE FOR RAPID EXPANSION IN LCL Global LCL Port Pairs FCL AND AIR VOLUMES consolidator Market share LCL 10
Slide 12: Network Leader in Indian Supply Chain
NETWORK LEADER IN INDIAN SUPPLY CHAIN Jammu & Kashmir Himachal Pradesh Uttarakhand UNIQUE COMBINATION OF Punjab EXPRESS + CONTRACT LOGISTICS Haryana Delhi Jharkhand Uttar Pradesh Gurgaon 99% Bihar OF PINCODES^ Jaipur Assam SERVICED Rajasthan Guwahati Ahmedabad West Bengal 150+ Baroda WAREHOUSE & Mad
Slide 13: Biggest Indian Logistics Company
BIGGEST INDIAN LOGISTICS COMPANY REVENUE^ (₹ crore) ^TOP 7 INDIAN LISTED LOGISTICS COMPANY BY FY22 REVENUE 20,072 LEADING ICD PLAYER 7,653 LEADING B2C EXPRESS PLAYER 6,882 LEADING AIR EXPRESS 4,410 LEADING CL PLAYER 4,141 LEADING FTL PLAYER 3,257 LEADING LTL PLAYER 2,394 12
Slide 14: Multiple Levers for Growth
MULTIPLE LEVERS FOR GROWTH ADARSH HEGDE JOINT MANAGING DIRECTOR 13
Slide 15: Market Leader in Fast Growing LCL Market
MARKET LEADER IN Out of the ~75m CBMs NVOCCs controlled business, ECU operates FAST GROWING in markets that represent ~65m CBMs of this traffic SCALE CREATES FLYWHEEL OF SUCCESS LCL MARKET 1 34 ~110m 75 2021e NVOCCs Big FFs Carriers TRENDS IN LCL MARKET 2 – 3% (0 – 2%) 2 – 4% Demand 6 – 8% E-platfor
Slide 16: Rapid Expansion in FCL Market Share
RAPID EXPANSION IN FCL MARKET SHARE FCL Market* Size and Growth FCL Customers Breakdown TEUm “000 TEU 2% 160.2 593 142.8 471 489 15% - 20% 392 18% - 22% 300 226 156 180 60% - 65% 122 69 2019A 2025E 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CARRIERS BIG SMALL SHIPPERS SMALL BIG FORWARDERS FOR
Slide 17: Going from Port to Door
GOING FROM PORT TO DOOR Offered in 52 countries globally, resulting in convenience for customers and higher margins for ECU OFFERING About 30% of ECU’s business has a D2D component, mostly in Europe and the US Building Ecosystem on ECU360° Platform Insurance Network relationship to move freight more
Slide 18: Transformation Led Growth in Express & Contract Logistics
TRANSFORMATION LED GROWTH IN EXPRESS & CONTRACT LOGISTICS OPERATIONAL SALES NEW VERTICALS IN DIGITIZATION EXCELLENCE ACCELERATION CONTRACT LOGISTICS Upgrading Infrastructure Through re-alignment of Providing digital tools Providing and automating team structures and for ease of doing End-to-end oper
Slide 19: Value Accretive M&A
VALUE ACCRETIVE M&A RAVI JAKHAR GROUP CHIEF STRATEGY OFFICER 18
Slide 20: Strategy Led Proactive Acquisitions
STRATEGY LED PROACTIVE ACQUISITIONS ECU International (Asia), South Asia Terminals, Allcargo Belgium N.V., Administradora House Line C.A., AGL N.V., Asia Line, CELM Logistics SA de CV, China Consolidated Company, CLD Compania Logistica de Distribucion SA., Contech Transport Services, Consolidadora E
Slide 21: Consolidation of Network
CORE DRIVERS OF ACQUISITION CONSOLIDATION OF NETWORK Acquisition End to End Consolidation of Network of Key Agents Pricing Capabilities across network Entering New Product Ease of Single Digitization Operating System Entering New Market Process Standarization Better “One way Services Entering New of
Slide 22: Entering New Product
CORE DRIVERS OF ACQUISITION ENTERING NEW PRODUCT Added Strength to setting platform the company in FCL for rapid business expansion Consolidation of Network 27% Entering “000 TEU 2013 – 2022 CAGR 593 New Product 471 489 392 300 226 Entering 156 180 New Market 122 69 2013 2014 2015 2016 2017 2018 201
Slide 23: Entering New Market
CORE DRIVERS OF ACQUISITION ENTERING NEW MARKET Consolidation Strategic Rationale of Network Market Leadership in Scandinavia Access to rail business in Europe Entering Execution and integration New Product Bolt-on acquisition in Denmark Comprehensive integration plan Entering Value Creation New Mar
Slide 24: Entering New Business Segment
CORE DRIVERS OF ACQUISITION ENTERING NEW BUSINESS SEGMENT Entry into Fast growing On a stronger base Holistic Express Logistics Biz with focus on growth turnaround Consolidation GKEPL – Average Quarterly Surface Volumes (‘000 MT) of Network 279 242 210 194 Entering New Product FY20 FY21 FY22 Q1FY23
Slide 25: Digital First Approach
DIGITAL FIRST APPROACH VAISHNAV SHETTY CHIEF DIGITAL OFFICER 24
Slide 26: Why Digital?
WHY DIGITAL? To deliver utmost value to our customers, employees and partners by challenging the status quo. Building a one-of-a-kind global logistics institution from India. Today by coupling technology with our scale and entrepreneurial culture we are Pioneering Enhancing Optimizing our Building l
Slide 27: Allcargo Logistics
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Slide 28: ECU360 Always Moving Forward
ECU 360 ALWAYS MOVING FORWARD 2020 2022 Features Trade Lanes Customer Profile Registration Process Speed of Quote Reply Booking Track and Trace – automatic Documentation Management Customized Reports & Analytics API Customs Module Knowledge Portal (newsletters etc.) Trade Finance Online Insurance Tr
Slide 29: Digital Framework for Logistics
DIGITAL FRAMEWORK FOR LOGISTICS Recruitment Intelligent Physical RDA Analytics & Ecosystem Integration Automation Workflows Internet / IoT & RPA recommendation with end-to-end engines service offering Knowledge transfer Data Aggregation / assessments Tools for enhanced visibility ENABLE ENHANCE ENGE
Slide 30: Digital Themes to Drive Growth & Efficiency
DIGITAL IS FOCUSED ON 4 THEMES TO DRIVE ORGANISATIONAL GROWTH & EFFICIENCY Customer Applications Startup Collaboration Boost customer delight Accelerate startups and our own Enhance wallet share processes to further our position as market leader Give back to the industry through our unique network a
Slide 31: Unmatched Digital & Operational Capabilities
UNIQUELY POSITIONED WITH UNMATCHED DIGITAL & OPERATIONAL CAPABILITIES Conventional players have operating Digital start-ups lack network but lack digital capabilities operational footprint and scale FCL LCL Air Industry is converging …leading to stricter towards an increasing requirements for real t
Slide 32: How AI & Automation
HOW AI & AUTOMATION Are creating a unique global network and operating rhythm Real time prescriptive yield intelligence Sales CRM 2.0 (Optimisation & Gamification) Customized Customized Real time dynamic and focused supply visibility pricing sales push ECU360 (Growth & Customer Centricity customer d
Slide 33: ECU: World's First & Only LCL Consolidator
ECU WORLD’S FIRST & ONLY LCL CONSOLIDATOR WITH export shipments Global Operating countries with door- booked digitally System to-door serviceability Forwarders using ECU360 Customer every month & growing Satisfaction Score CFS to CFS Visibility ISO Security Certification 32
Slide 34: Express - Digital Backbone Aiding Decision Making
EXPRESS - DIGITAL BACKBONE AIDING DECISION MAKING Back-end Front-end Pick Up & Delivery Hub CRM system Data Science Automation Automation AI-led GEMS* 2.0 Sales Digital Network Design Acceleration Payments * GATI ENTERPRISE MANAGEMENT SYSTEM 33
Slide 35: Exceptional Returns on Capital
EXCEPTIONAL RETURNS ON CAPITAL DEEPAL SHAH DEPUTY GROUP CHIEF FINANCIAL OFFICER 34
Slide 36: Strong Fundamentals Leading to Growth
STRONG FUNDAMENTALS Leading to growth Total Operational Revenue^ (₹ Cr) EBITDA^ (₹ Cr) & EBITDA Margins^ (%) (%) 6.2 6.5 6.9 6.0 7.6 7.7 22,298 1733 1,516 20,072 10,498 634 7,346 449 503 6,895 375 6,047 FY18 FY19 FY20 FY21 FY22 TTM FY18 FY19 FY20 FY21 FY22 TTM ^ excludes other income 35
Slide 37: Cash Flow & Capital Allocation
CASH FLOW & CAPITAL ALLOCATION CASH FLOW MOVEMENT (₹ Cr) - FY18 TO FY22 Opening Balance Taxes 586 cash + treasury Investments 252 Value Accretive M&A 862 CFO (Pre-tax) 2,718 Finance cost 303 Dividend (JVs & associates) 25 Dividend (incl. DDT) 429 Borrowings (Net) 751 Capex* 984 Disposal of non-core
Slide 38: Free Cash Flow Movement
FREE CASH FLOW MOVEMENT FREE CASH FLOW MOVEMENT (₹ Cr) - FY18 TO FY22 850 587 477 388 308 324 319 330 238 264 218 112 70 FY18 FY19 FY20 FY21 FY22 -64 -158 CFO Capex Free Cash Flow
Slide 39: Capital Allocation & Outcome
CAPITAL ALLOCATION & OUTCOME 3% 2% 4% 9% 24% CAPITAL 12% EXPENDITURE Value Accretive 52% M&A 71% 24% Logistics Parks ECU entities GATI Others Gati Nordicon Speedy Other JV & Associates Other NCI Buyout Capex* (₹ Cr) 984 Value Accretive M&A (₹ Cr) 862
Slide 40: Return on Capital Employed
RETURN ON CAPITAL EMPLOYED ROCE# (Consolidated) (%) ROCE (International Supply Chain)# (%) ROCE (CFS)# (%) 27 23 52 58 43 13 30 27 28 30 28 9 9 24 24 FY19 FY20 FY21 FY22 TTM* FY19 FY20 FY21 FY22 TTM* FY19 FY20 FY21 FY22 TTM* * TTM EBIT / Q1FY23 Capital Employed 39
Slide 41: Optimum Leverage for Driving Growth
OPTIMUM LEVERAGE FOR DRIVING GROWTH 602 112 Avg Maturity <1 year On Execution of Blackstone 358 Agreement Avg Maturity 10 years 777 Avg Maturity 4-7 years 40
Slide 42: Abridged Version of Demerged Entities
ABRIGED VERSION* OF DEMERGED ENTITIES FY22 CONSOLIDATED FINANCIALS Adjusted Adjusted Business ROCE (%) Capital employed (₹ Cr) Borrowings (₹ Cr) EBIDTA (₹ Cr) 5,383 1,848 1,515 22% 3,581 390 1412 917 3 929 1263 131 121 29% 27% 3% ALLCARGO ALLCARGO TRANSINDIA ALLCARGO ALLCARGO TRANSINDIA ALLCARGO ALL
Slide 43: Allcargo Logistics
Adjusted Adjusted Business ROCE Capital employed Borrowings EBIDTA (%) (₹ Cr) (₹ Cr) (₹ Cr) ALLCARGO 3,581 917 1263 29% LOGISTICS^ *could change closer to the demerger effective date ^ includes ECU and GATI but excludes ACCI, ACL = Allcargo Logistics, ATL = Allcargo Terminals and TRL = TransIndia Re
Slide 44: Allcargo Terminals
Adjusted Adjusted Business ROCE Capital employed Borrowings EBIDTA (%) (₹ Cr) (₹ Cr) (₹ Cr) ALLCARGO 390 3 131 27% TERMINALS *could change closer to the demerger effective date ^ includes ECU and GATI but excludes ACCI, ACL = Allcargo Logistics, ATL = Allcargo Terminals and TRL = TransIndia Reality
Slide 45: TransIndia Reality
Adjusted Adjusted Business ROCE Capital employed Borrowings EBIDTA (%) (₹ Cr) (₹ Cr) (₹ Cr) TRASINDIA 1,412 929 121 3% REALITY *could change closer to the demerger effective date ^ includes ECU and GATI but excludes ACCI, ACL = Allcargo Logistics, ATL = Allcargo Terminals and TRL = TransIndia Realit
Slide 46: Board & Management Team
BOARD & MANAGEMENT TEAM 45
Slide 47: Board of Directors
BOARD OF DIRECTORS SHASHI KIRAN SHETTY ADARSH HEGDE PARTHASARATHY V S Chairman & Managing Director Joint Managing Director Vice Chairman & Non-Executive, Director AARTHI SHETTY KAIWAN KALYANIWALLA MOHINDER PAL BANSAL MARTIN MÜLLER Non-Executive, Director Non- Executive, Director Non- Executive, Non-
Slide 48: Management Team – Allcargo Logistics
MANAGEMENT TEAM – ALLCARGO LOGISTICS SURESH KUMAR R RAVI JAKHAR DEEPAL SHAH CEO (India) Group Chief Strategy Officer Deputy Group Chief Financial Officer JATIN CHOKSHI KAPIL MAHAJAN INDRANI CHATTERJEE Chief Investment Officer Global Chief Information & Group Chief People Officer Technology Officer M
Slide 49: Management Team – ECU Worldwide
MANAGEMENT TEAM – ECU WORLDWIDE TIM TUDOR DMITRIY IOFFE SIMON SACHU UDAY SHETTY CEO CCO LCL CCO, Global Air, FCL & Procurement COO VAISHNAV SHETTY CLAS THORELL SALEEM NAZIR PHILIP BLUMENTHAL, PHD CDO Global Head - LCL Product & CFO CTO Yield Management MARC MEIER MARC STOFFELEN ASHISH MATHUR NEILS B
Slide 50: Management Team – Gati
MANAGEMENT TEAM – GATI ADARSH HEGDE PIROJSHAW (PHIL) SARKARI HUAFREED NASARWANJI Managing Director, Gati-KWE Chief Executive Officer Chief Commercial Officer MUKUNDAN K. V G.S. RAVI KUMAR ` Chief Assurance & Risk Executive Chief Information Officer ANISH MATTHEW MEHERNOSH N. MEHTA CHARLES DEVLIN D’C
Slide 51: Thank You
ATTRACTING BEST TALENT TO DRIVE GROWTH THANK YOU 50
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