Zto Express (cayman), Inc. Class A · HKEX:2057
Zto Express (cayman), Inc. Class A — Q1 2022 Earnings Presentation
29 slides from Zto Express (cayman), Inc. Class A's earnings presentation, May 26, 2022
Slide 1: ZTO Express Q1 2022 Investor Relations Presentation
ZTO Express Q1 of Fiscal Year 2022 Investor Relations Presentation May 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 8 Significant Market Growth Opportunities 9 Distinct Partner Network Bui
Slide 4: Company Overview
COMPANY OVERVIEW Ai TR ze ag Sada EXPRESS az ae al
Slide 5: Leading Express Delivery Company in China
Leading Express Delivery Company in China 5.2 bn Parcels1 in 1Q22 21.6% Market Share2 in 1Q21 >99% County-Level Cities #1 #1 Covered ~11,000 30,700+ Line-haul Pickup / Delivery Vehicles3 Outlets Top ranking consumer satisfaction among “Tongdas通达”6 since 2014 #1 market share by parcel volume in C
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 Pickup Network Partner Payment to ZTO Express Payment to Delivery Network Partner • Line-haul transit fee Parcel flow • Full express service fee • Last-mile delivery 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: Our Core Competitive Advantages
OUR CORE COMPETITIVE ADVANTAGES 02
Slide 10: Significant Market Growth Opportunities
1 Significant Market Growth Opportunities Market Opportunities Express Delivery Industry Stable Volume Growth of Express Delivery Industry Sustainable Growth Prospect of Express Delivery Industry (Bn parcels) High Internet and Digital Commerce Penetration 21-25 CAGR: 8.5% 150.0 108.3 1,032mm 842mm I
Slide 11: 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 Only Company to Successfully Convert Fee Sharing Mechanism Major Network Partners to Shareholders Before
Slide 12: 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 Centric & Results- Express Delivery Driven People Company in China 23,000+ with 21.6% Employees market share1 & Globa
Slide 13: 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 Improve cost-efficiency and ensure qualit
Slide 14: 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 15: Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology
4 Best-in-Class Operational Capabilities and Cost Efficiencies Enabled by Technology 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 PROFITS Esta
Slide 16: Experienced Leadership & Sound Execution
5 Experienced Leadership & Sound Execution Stable and Entrepreneurial Management Team with Deep Industry Knowledge & Experience Meisong Lai 20 years of experience in Jianfa Lai 20 years of experience in Founder, Chairman express delivery industry express delivery industry Director and Vice & Chi
Slide 17: Consistent Achievements in Corporate Strategy
6 Consistent Achievements in Corporate Strategy We have simultaneously maintained our superior service quality, grown our market share, and sustained our profitability Superior Service Quality Increasing Market Share Sustained Profitability Market Share Income from Operations Outperformance in (%) 0
Slide 18: Adjacent Expansion Beyond Express Delivery
7 Adjacent Expansion Beyond Express Delivery We will continue to differentiate and enrich our service offerings, and leverage our core capabilities to consolidate resources in the logistics space Less –than-Truckload International / Cross-Border Focus on heavy cargo International express deliver
Slide 19: Sustainability Through Enhanced ESG Management
8 Sustainability Through Enhanced ESG Management1 Green Practices Green Development Green Recyclable Transit Bags Green Transportation ⚫ ZTO Express has used green By 2021, ZTO has put in ⚫ ZTO increases use of high By 2021, 9,000+ recyclable transfer bags nationwide, use over 18 million green capac
Slide 20: Sustainability Through Enhanced ESG Management (Cont'd)
8 Sustainability Through Enhanced ESG Management 1 (Cont’d) Contributing To Society Safeguarding Labor Rights ⚫ Equality & Diversity ⚫ Supporting Students By referring to International Labour ZTO pays attention to the Organization conventions, ZTO’s education and development employee policy promotes
Slide 21: Sustainability Through Enhanced ESG Management (Cont'd)
8 Sustainability Through Enhanced ESG Management 1 (Cont’d) Consolidating Management and Governance Stringent Corporate Governance ⚫ Enhancing Information Strict Internal Control Security ⚫ Board of Directors has clear duties pertaining to corporate ZTO Express has passed the governance related issu
Slide 22: Financial Overview
FINANCIAL OVERVIEW 03
Slide 23: Strong Unit Economics
Strong Unit Economics (RMB/Unit) Non-GAAP Operating Profit ASP3 1.52 1.45 1.33 1.41 1.34 1.39 1.29 1.21 1.24 0.36 0.32 0.27 0.25 0.29 0.20 0.25 0.24 0.25 = Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022
Slide 24: 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 25: 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 -51% 10% -17% -13% 70% -12% 16% 31% 76% -46% 6% -7% -44% 44% -12% -5% 35% 64% 25.7% 22.3% 19.9% 18.4% 22.7% 19.0% 14.1% 18.2% 19.0% 17.6% 1
Slide 26: Continuous Cost Efficiencies and Productivity Gains
Continuous Cost Efficiencies and Productivity Gains Cost of Revenues - Breakdown Gross Profit and Margin (RMB million) (RMB million) 27.6% 20.5% 22.5% 22.8% 24.4% 20.9% 21.0% 21.2% 323 16.9% 561 1,193 308 2,251 266 301 1,059 1,121 436 85 447 911 954 83 1,858 109 820 92 1,769 1,674 417 905 98 2,015 1
Slide 27: Abundant Cash Reserves Supports Continued Investment in Growth
Abundant Cash Reserves 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 9,208 9,328 18% Decline 967 1,971 4,951 132% 19,8782 Growth 18,981 21% 5,532 15,622 Declin
Slide 28: Reconciliation of GAAP to Adjusted / Non-GAAP Measures
Reconciliation of GAAP to Adjusted / Non-GAAP Measures Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 Adjusted EBITDA RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'
Slide 29: Thank You
THANK YOU 28