Zto Express (cayman), Inc. Class A · HKEX:2057
Zto Express (cayman), Inc. Class A — Q3 2022 Earnings Presentation
39 slides from Zto Express (cayman), Inc. Class A's earnings presentation, Nov 21, 2022
Slide 1: 3Q 2022 Investor Presentation
3Q 2022 INVESTOR PRESENTATION November 2022
Slide 2: Safe Harbor Statement and Disclaimer
Safe Harbor Statement and Disclaimer This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act
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 6.4 bn Parcels1 in 3Q22 22.1 % Market Share2 in 3Q22 >99% County-Level Cities #1 #1 Covered 31,000+ ~11,000 Pickup / Delivery Line-haul Outlets 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 First line-haul to PRC Postal Law (Revised in Acquired an additional 16 network Certified as a National High and New Included in the MSCI Completed truck across 2009) 新邮政法 legalized partners to form
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 efficiency
“ Self-driving vehicles optimizing the efficiency of last-mile delivery ” 9
Slide 11: Real-time data monitoring and analytics powering operational excellence
“ 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 1,032mm 842mm • 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 22.1% 23,000 market share1 & Employees Global
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 ~11,000 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 20 years of experience in express delivery industry 15 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 Income from Operations (%) Outperformance in 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: Sustainability Through Continuous ESG Practices
8 Sustainability Through Continuous ESG Practices C Carbon Intensity Reduction Recycling and Renewable Energy Green Transportation and Equipment Unit: kg CO2/ per RMB 10,000 revenue 9,000+ 18+ million 4 Consecutive Years Recyclable Transit Bags High-capacity Trailer 442 Trucks by 2021 of Reduction i
Slide 24: Accelerating the transition towards green and low-carbon transportation
“ Accelerating the transition towards green and low-carbon transportation ” 23
Slide 25: Adoption of solar energy in transit centers
“ Adoption of solar energy in transit centers ” 24
Slide 26: Enhancing life quality and supporting common prosperity
“ Enhancing life quality and supporting common prosperity ” 25
Slide 27: Our Strategies
Pigs ‘O EXPRESS OUR STRATEGIES
Slide 28: 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 29: Promoting rural revitalization and serving the rural market
“ Promoting rural revitalization and serving the rural market ” 28
Slide 30: Towards a top-tier global integrated logistics service provider
“ Towards a top-tier global integrated logistics service provider ” 29
Slide 31: Last-mile posts enhancing customer reach and network efficiency
“ Last-mile posts enhancing customer reach and network efficiency 30
Slide 32: Financial Overview
FINANCIAL OVERVIEW 04
Slide 33: Strong Unit Economics
Strong Unit Economics (RMB/Unit) Non-GAAP Operating Profit ASP3 1.41 1.39 1.45 1.36 1.33 1.34 1.34 1.21 1.24 0.32 0.32 0.34 0.29 0.25 0.25 0.25 0.20 0.24 = Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022
Slide 34: Robust Parcel Volume and Revenue Growth
Robust Parcel Volume and Revenue Growth Parcel Volume Total Revenue (Parcel volume in millions) (RMB million) 21% 31% 14% YoY YoY YoY Growth 40% Growth Growth YoY 22,289 30,406 Growth 25,214 17,003 22,110 12,121 2019 2020 2021 2019 2020 2021 Quarterly Parcel Volume Quarterly Revenue (Parcel volume i
Slide 35: 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 -17% -13% 70% -12% 16% 31% 76% 36% 60% -7% -44% 44% -12% -5% 35% 64% 38% 65% 22.3% 22.9% 21.2% 24.3% 17.4% 20.3% 19.0% 19.9% 18.4% 18.2% 15.5% 19.0% 17.6% 14.1%
Slide 36: Continuous Cost Efficiencies and Productivity Gains
Continuous Cost Efficiencies and Productivity Gains Cost of Revenues - Breakdown Gross Profit and Margin (RMB million) (RMB million) 22.8% 24.4% 25.4% 27.3% 21.0% 22.5% 21.2% 20.5% 323 16.9% 561 308 307 284 2,444 1,193 2,251 2,203 266 301 1,059 1,106 1,068 1,121 436 85 447 911 954 83 120 113 1,858 1
Slide 37: 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) 46% 1% 31% Growth Growth Decline 7,220 42% Growth 9,208 9,328 25% 967 25,4793 Decline 1,971 4,951 19,8782 10,513 17,884 3,781
Slide 38: 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, 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 Adjusted EBITDA RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'
Slide 39: Thank You
THANK YOU 38