Zto Express (cayman), Inc. Class A · HKEX:2057
Zto Express (cayman), Inc. Class A — Q3 2024 Earnings Presentation
40 slides from Zto Express (cayman), Inc. Class A's earnings presentation, Nov 20, 2024
Slide 1: 3Q 2024 Investor Presentation
3Q 2024 INVESTOR PRESENTATION November 2024
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 8.7 bn Parcels1 in 3Q24 20.0 % Market Share2 in 3Q24 >99% County-Level Cities Covered #1 #1 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
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 Dual primary- First line-haul to PRC Postal Law (Revised in 2009) 新邮政法
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 1,100mm 905mm • 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 20.0% 24,000+ 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 Packages for Storage Retail Drop-Off Packages Service Couriers for Fees Space Store Solution to increasing delivery cost due to
Slide 17: Best-in-Class Operational Capabilities and Cost Efficiencies
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: Smart Logistics Parks and Integrated Logistics
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 22 years of experience in express delivery industry 17 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 0.8% 26% 1.5%
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 - Responding to Climate Change and Carbon Reduction
8 ESG Practices- Responding to Climate Change and Carbon Reduction Incorporating Climate Change into Governance and Strategic Framework The BoD is responsible for climate change-related risks and opportunities, and Strengthening the Governance identification and authorizes the ESG Committee to o
Slide 24: ESG Practices - Social Value and Corporate Governance
8 ESG Practices- Contributing Social Value and Optimizing Corporate Governance Upgraded comprehensive express products Creating a moral culture and enhancing supplier management ZTO Feikuai ZTO Haokuai ZTO Standard Ordinary Parcel Standardize reporting channels Risk assessment implementation Guarant
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
= Fue = > 370 EXPRESS \ \ OUR
Slide 29: Our Strategies
Our Strategies Maintaining high quality of service and customer satisfaction Maximize earnings upon achieving targeted volume growth Enhance the scale and capability of Invest in the logistics ecosystem to logistics operations integrate resources in logistics value chain Expand last-mile presenc
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
aes ip p sca = 270 EXPRESS \ FINANCIAL OVERVIEW
Slide 34: Strong Unit Economics
Strong Unit Economics (RMB/Unit) Non-GAAP Operating Profit ASP3 1.36 1.46 1.40 1.36 0.37 0.37 0.36 0.38 1.24 1.17 1.19 1.24 1.20 0.34 0.35 0.32 0.32 0.33 = Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024
Slide 35: Robust Parcel Volume and Revenue Growth
Robust Parcel Volume and Revenue Growth Parcel Volume Total Revenue (Parcel volume in millions) (RMB million) 24% 9% 9% YoY Growth 16% YoY Growth YoY YoY Growth Growth 30,202 38,419 24,389 35,377 22,289 30,406 2021 2022 2023 2021 2022 2023 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 60% 20% 75% 45% 11% 12% 16% 12% 17% 65% 22% 90% 44% 24% 4% -13% 3% 1% 26.0% 29.6% 30.0% 25.9% 24.4% 26.7% 26.6% 21.6% 22.3% 24.3% 24.9% 25.
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% 33.8% 27.3% 28.1% 28.1% 29.8% 29.5% 30.1% 31.2% 3,620 228 3,304 238 217 226 3,128 3,002 3,335 880 133 284 1,179 183 222 222 162 1,097 1,218 1,330 2,773 2,706 1,0
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) 16% 27% 6% Growth 8% Growth Growth Decline 13,361 36,461 34,498 32,646 11,479 7,234 422 6,670 141 25,664 24,725 11% 19,626 23
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, 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 Adjusted EBITDA RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'
Slide 40: Thank You
THANK YOU 39