Zto Express (cayman), Inc. Class A · HKEX:2057
Zto Express (cayman), Inc. Class A — Q3 2023 Earnings Presentation
40 slides from Zto Express (cayman), Inc. Class A's earnings presentation, Nov 17, 2023
Slide 1: 3Q 2023 Investor Presentation
3Q 2023 INVESTOR PRESENTATION Nov 2023
Slide 2: Safe Harbor Statement and Disclaimer
Safe Harbor Statement and Disclaimer This presentation contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as
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 11 Significant Market Growth Opportunities 12 Distinct Partner Network B
Slide 4: Company Overview
COMPANY OVERVIEW 01
Slide 5: Leading Express Delivery Company in China
Leading Express Delivery Company in China 7.5bn Parcels1 22.4 % Market Share2 >99% County-Level Cities #1 #1 Covered ～31,000 Pickup / Delivery ～10,000 Outlets Line-haul Vehicles3 Top ranking consumer satisfaction among “Tongdas通达”6 since 2014 #1 market share by parcel volume in China’s express d
Slide 6: Our Business: Past and Present
Our Business: Past and Present Past: Following the Lead Present: Pursuing and Surpassing Acquired an additional 16 network partners to form a centrally managed Certified as a National High and New Included in the MSCI Completed Completed US $1 First line-haul to PRC Postal Law (Revised
Slide 7: Our Distinct Network Partner Business Model (NPM)
Our Distinct Network Partner Business Model (“NPM”) Fund flow Payment to ZTO Express Payment to Delivery Network Partner Payment to Pickup Network Partner • Line-haul transit fee Parcel flow • Last-mile delivery fee • Full express service 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: Next-generation hybrid drones improving accessibility
“ Next-generation hybrid drones improving accessibility while reducing logistics costs and delivery time ” 8
Slide 10: Self-driving vehicles optimizing last-mile delivery
“ Self-driving vehicles optimizing the efficiency of last-mile delivery ” 9
Slide 11: Real-time data monitoring and analytics
“ Real-time data monitoring and analytics powering operational excellence ” 10
Slide 12: Our Core Competitive Advantages
OUR CORE COMPETITIVE ADVANTAGES 02
Slide 13: Significant Market Growth Opportunities
1 Significant Market Growth Opportunities Market Opportunities Express Delivery Industry High Internet and Digital Commerce Penetration Stable Volume Growth with More Sustainable Pricing Level Stable and Healthy Volume Growth 1,079mm 884mm • 40bn+ incremental parcel volume from 2021 to 2025 Internet
Slide 14: 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 Fee Sharing Mechanism Successfully Convert Major Network Partners to Shareholders Before 2008: Last-mile
Slide 15: 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 Loyal, Customer- Largest Express Delivery Centric & Results- Company in China Driven People with 22.4% 23,000+ market share1 & Employees8 Glob
Slide 16: 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 Solution to increasing delivery cost due
Slide 17: 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 ～10,000 vehi
Slide 18: Best-in-Class Operational Capabilities (Cont'd)
4 Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology (Cont’d) 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 PROFI
Slide 19: Best-in-Class Operational Capabilities (Cont'd)
4 Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology (Cont’d) Provide varied yet integrated logistic services by implementing more efficient time-space operational design at Smart Logistic Parks Integrated Logistics Maintenance Station Offer comprehensive one-stop s
Slide 20: Experienced Leadership & Sound Execution
5 Experienced Leadership & Sound Execution Stable and Entrepreneurial Management Team with Deep Industry Knowledge & Experience Founder, Chairman & Chief Executive Officer Director and Vice President of Infrastructure Management 21 years of experience in express delivery industry 16 years of exp
Slide 21: Consistent Achievements in Strategic Focus
6 Consistent Achievements in Strategic Focus We have simultaneously maintained our superior service quality, grown our market share, and sustained our profitability Superior Service Quality Expanding Market Share Sustained Profitability (%) Market Share (RMB mm) Income from Operations 1.5% 22% 0.2%
Slide 22: Adjacent Expansion Beyond Express Delivery
7 Adjacent Expansion Beyond Express Delivery Systemically develop an ecosystem with diversified product and services leveraging core express infrastructure and ability to access and consolidate resources International / Cross-Border (Since 2014) Diversified products: freight forwarding, dedicated
Slide 23: ESG Practices - Dual Carbon Reduction
8 ESG Practices-Firmly Commit to "Dual Carbon Reduction" Climate Change & Clean Energy Response Reduction in greenhouse gas Reduction in energy The Company prepared PV facilities are gradually contingency plans for installed at the sorting hubs emission intensity consumption intensity potential clim
Slide 24: ESG Practices - High Quality and Sustainable Development
8 ESG Practices-Achieving High Quality and Sustainable Development Social Responsibility Corporate Governance Customer Privacy Protection Product and Service Innovation ESG Governance Continuously improving information and data ESG Committee of the Board of Directors: management to ensure the securi
Slide 25: Accelerating the transition towards green and low-carbon transportation
“ Accelerating the transition towards green and low-carbon transportation ” 24
Slide 26: Adoption of solar energy in transit centers
“ Adoption of solar energy in transit centers ” 25
Slide 27: Enhancing life quality and supporting common prosperity
“ Enhancing life quality and supporting common prosperity ” 26
Slide 28: Our Strategies
Pigs ‘O EXPRESS OUR STRATEGIES
Slide 29: Our Strategies
Our Strategies To achieve continuous market share expansion and profit targets while maintaining high quality of service and customer satisfaction Enhance the scale and capability of Invest in the logistics ecosystem to logistics operations integrate resources in logistics value chain Expand las
Slide 30: Promoting rural revitalization and serving the rural market
“ Promoting rural revitalization and serving the rural market ” 29
Slide 31: Towards a top-tier global integrated logistics service provider
“ Towards a top-tier global integrated logistics service provider ” 30
Slide 32: Last-mile posts enhancing customer reach and network efficiency
“ Last-mile posts enhancing customer reach and network efficiency 31
Slide 33: Financial Overview
FINANCIAL OVERVIEW 04
Slide 34: Strong Unit Economics
Strong Unit Economics (RMB/Unit) Non-GAAP Operating Profit ASP3 1.39 1.45 1.36 1.46 1.40 1.24 1.34 1.24 0.34 0.37 0.35 0.37 1.17 0.32 0.32 0.32 0.25 0.24 = Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Slide 35: Robust Parcel Volume and Revenue Growth
Robust Parcel Volume and Revenue Growth Parcel Volume Total Revenue (Parcel volume in millions) (RMB million) 9% 16% 31% YoY Growth 21% YoY Growth YoY YoY Growth Growth 35,377 24,389 22,289 30,406 17,003 25,214 2020 2021 2022 2020 2021 2022 Quarterly Parcel Volume Quarterly Revenue (Parcel volume in
Slide 36: 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 16% 31% 76% 36% 60% 20% 75% 45% 11% -5% 35% 64% 38% 65% 22% 90% 44% 24% 29.6% 26.0% 25.9% 20.3% 21.2% 21.6% 24.9% 21.7% 26.7% 19.0% 2,530 2
Slide 37: Continuous Cost Efficiencies and Productivity Gains
Continuous Cost Efficiencies and Productivity Gains Cost of Revenues - Breakdown Gross Profit and Margin (RMB million) (RMB million) 33.9% 25.4% 27.3% 28.1% 28.1% 29.8% 21.2% 24.4% 20.5% 3,304 323 238 307 284 1,179 183 222 222 2,773 1,193 308 2,444 2,523 2,706 301 1,106 1,068 148 974 952 736 85 1,05
Slide 38: Strong Operating Cash Flow Supports Continued Investment in Growth
Strong Operating Cash Flow Supports Continued Investment in Growth Operating Cash Flow Capital Expenditure Cash and Cash Equivalent1 (RMB million) (RMB million) (RMB million) 59% 16% Growth 22% Growth Decline 86% 11,479 Growth 31,970 27,452 9,328 25,6642 967 22% Decline 7,234 7,220 21,892 422 13,076
Slide 39: 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, 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 Adjusted EBITDA RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'
Slide 40: Thank You
THANK YOU 39