corporate presentation - listed...

GD Express Carrier Berhad

Corporate Presentation

August 2016

2

Disclaimer

This confidential document (the “Presentation”) and the information contained herein do not constitute or form part of and should not be construed as, an offer to make available or for subscription, or to sell or issue or the

solicitation of an offer to buy or acquire any securities of GD Express Carrier Berhad (the “Company”) or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity. No part of

this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking,

express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates,

advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the

document. This Presentation is being made to you on the basis that you have confirmed your representation that you are an investor falling within the exemptions set out in Schedules 6 and 7 of the Capital Markets and

Services Act 2007 of Malaysia. This Presentation is highly confidential and being given solely for your information and for your use and may not be shared, copied, reproduced or redistributed to any other person in any

manner.

The Presentation and the information contained herein are not an offer of securities for sale in the United States. The Presentation is being made to you on the basis that you have confirmed you are not located or

resident in the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“the Securities Act”) and may not be offered or sold in the United

States absent registration or an exemption from registration under the Securities Act. The Company does not intend to register any offering of securities in the United States or to conduct a public offering of securities in

the United States or in any other jurisdiction where such an offering is restricted or prohibited. Neither this Presentation nor any copy or portion of it may be sent or taken, published, transmitted or distributed, directly or

indirectly in or into the United States.

In Hong Kong, no securities of the Company may be offered to the public unless a prospectus in connection with the offering of such securities has been formally approved by The Stock Exchange of Hong Kong Limited

pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong) and duly registered at the Companies Registry of Hong Kong, or except in circumstances under which an

offer is made to professional investors as defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) or any rules made thereunder, or in other circumstances which do not result in the offering

document being a prospectus as defined under the Companies Ordinance, or which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

Any decision to purchase or subscribe for securities in any offering should be made solely on the basis of information contained in such offering document to be published in relation to such offering (if any). The

Presentation is being made to you on the basis that you have confirmed your representation that you are a “professional investor” as defined under Schedule 1 to the Securities and Futures Ordinance or any rules made

there under.

This Presentation contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include forward-

looking terms such as “targets”, “believes”, “expects”, “plans”, “intends”, “anticipates”, “projects”, “aims”, “seeks”, “may”, “will”, “would”, “should”, “could” or similar expressions or the negative thereof. However, these words

are not exclusive means of identifying forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could

cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including,

among others, financial forecasts, profit projections, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary

regulatory approvals and licences, the impact of developments in the economic, political and legal environment of Malaysia and/or Singapore, volatility in stock markets or in the price of the Company’s shares, financial

risk management and the impact of general business and global economic conditions. You are cautioned not to place undue reliance on these forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Any opinions

expressed in this Presentation are subject to change without notice and may differ, or be contrary to, opinions expressed by other business areas or groups of the Company as a result of using different assumptions and

criterion. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements

speak only as at the date as of which they are made, and the Company expressly disclaims any responsibility, and undertakes no obligation, to update or revise any forward-looking statements contained herein to reflect

any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. Forward-looking statements contained in this presentation

regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

Neither the Company, nor any of its agents, employees or advisers intends or has any responsibility, duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this

Presentation.

The information contained in this Presentation is provided as at the date of this document and is subject to change without notice. This Presentation is for information purposes only. This Presentation contains data

sourced from and the views of independent third parties. In replicating such data in this Presentation, the Company has not independently verified any of such data and there can be no assurance as to the accuracy or

completeness of such data. Accordingly, the Company makes no representation (whether express or implied) as to, and no reliance should be placed on, the accuracy or completeness of such data, information or

opinions contained in this Presentation. The replication of any views in this Presentation should be not treated as an indication that the Company agrees with or concurs with such views. It is not the Company's intention

to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company's financial or trading position or prospects.

Any securities, financial instruments or strategies of the Company mentioned herein may not be suitable for all investors. Any recipient of this Presentation must make its own independent decision regarding any such

securities or financial instruments.

By accepting access to any copy of the slides presented (whether in hard copy or electronic form), and by attending this Presentation, you agree to be bound by the foregoing limitations and to maintain absolute

confidentiality regarding the information disclosed in these materials. Any failure to comply with these restrictions may constitute a violation of applicable securities laws.


Company Overview

4

Quick Take

Core Business Last mile express delivery and logistics operations

Key Focus Increase delivery volume with high operational efficiencies

Market Share One of the top express delivery companies in Malaysia

Customer-solution centric and performance based reward system

5- year CAGR for Revenue 17.5%, PBT CAGR 25.6%; Positive Operating Cash Flows and Net Cash

Differentiation Strategy

Financial

5

Snapshot

Stock Information

Share Price @

11 August 2016

RM1.54

Shares Issued @

11 August 2016

1,383million

Market Capitalisation RM 2,130 million

Listing Status Main Market of Bursa Malaysia;

Syariah-Compliant

Listing Date May 2005 (ACE Market) / Transferred to

Main Market in August 2013

Dilutive Issuance

Warrant B

Listed on 12 Feb 2015, expiring on 11 Feb 2020. Strike price MYR1.53, 1:1 GDEX mother share conversion. Outstanding ~179m.

Board Members

Dato’ Capt. Ahmad Sufian Non-Executive Chairman

Teong Teck Lean Managing Director / Group CEO

Lim Chee Seong Executive Director / CFO

Richard Chua Non-Executive Director

Woo Keng Leong Non-Executive Director

Liew Heng Heng Non-Executive Director

Adi Arman bin Abu Osman Non-Executive Director

Audrey Ho Non-Executive Director

FYE 30 June 2015 Unaudited Financial Performance

Revenue RM196.8m (+24.5%) ROE 23.5%

Net Profit RM28.0m (+19.9%) ROA 17.1%

Net

Gearing Net Cash

Dividend

Payout Ratio 41.7%

Substantial Shareholders

Mr Teong Teck Lean 37.983%

Yamato Group 22.845%

Singapore Post 11.168%

Recent Corporate Development

Yamato emerged as 2nd largest shareholder of GDEX

Yamato Group subscribed to GDEX 10% private placement on 21 Jan 2016. It increased its stake to 22.8% subsequently by acquiring more shares.

6

Investment Holding Company, Listed on the Main Market of Bursa Malaysia

Transportation Services

Renting of Computer Equipment

Facilities & Asset Management

Logistics Operations

Express Delivery

For future Regional Expansion plan

Insurance Services

Express Delivery

GDEX Group Structure

GD Venture (M) Sdn Bhd

GD Technosystem Sdn Bhd

GD Facilities and Assets

Management Sdn Bhd

GD Logistics (M) Sdn Bhd

GD Express (Singapore) Pte Ltd

GDEX Regional Alliance Pte Ltd

GD Valueguard Sdn Bhd

GD Express Sdn Bhd

100%

GD Express Carrier Bhd

100%

100%

100%

100%

100%

100%

100%

GD Distribution

Services Sdn Bhd(1)

GD Secured

Solutions Sdn Bhd(1)

GD Customised

Solutions Sdn Bhd(1)

100%

100%

100%

Note: (1) Dormant Companies

7

8.6 10.6 13.3 20.8

29.5 37.9

45.9 57.4

68.1 75.1

81.8 93.1

116.3

135.2

158.7

196.8

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

GDEX Group History and Mission

Vision

An Organisation of Sound

Values and Dynamic

Processes

Empowering Customers

with Value-for Money

Effective Solutions

Contributing to the Well-

Being of the Community – A

Leading Role Model in the

Logistics Service Industry

Mission

To Deliver the Most Trusted

and Professional Express

Carrier Services in the

Countries We Operate

Quality Policy

Committed to ensuring

every task is thoroughly

planned and goals

understood

Processes only

completed after checking

that the goals are met

Always searching for a

better way to carry out

the task

Striving to discover the

better way

Established in

1996, but ran

into difficulties

triggered by

1997 financial

crisis

2000

Entry of

Teong Teck

Lean as

controlling

shareholder of

GDEX

2003

First local

express

delivery

company to

obtain ISO

9001: 2000

(Quality

Management

System)

2005

Successfully

listed GDEX

on ACE

MARKET of

Bursa

Malaysia

2008

First local

express

carrier to

deploy

conveyor

systems for

both parcel

and document

sorting

2011

Entry of

Singapore

Post as

substantial

shareholder

2013

Successfully

transferred

listing to MAIN

MARKET of

Bursa

Malaysia

8

GDEX NEXT PHASE OF GROWTH

New Growth

Domestic Market Regional Expansion

• Hub expansion to increase sorting capacity

• Fleet expansion and human

capital improvement • Continue to penetrate into new

market segment.

• To continue developing global connectivity with the existing global and regional players, e.g. Fedex, DHL, UPS, TNT, Aramex, SF Global Express, as well as other potential players.

• Operations in Singapore - Handling all deliveries from Malaysia to

Singapore as well as within Singapore. - To meet major customers’ requirements • Representative Office in Indonesia - Cross borders business collaborations

with Pos Indonesia. - To set up operations in major cities in

Indonesia. • To continue our network expansion into

other countries e.g. Thailand, Vietnam, Philippines, Cambodia, Myanmar, Laos.

9

81.8 93.1 116.3

135.2 158.7

196.8

0

50

100

150

200

250

FY10 FY11 FY12 FY13 FY14 FY15

Financial Highlights

Revenue

RM million

Pre-Tax Profit

RM million

EBITDA Net Profit

8.3 9.9 12.3

19.2 24.3

31.3

10.1% 10.6% 10.6%

14.2% 15.3%

15.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

5

10

15

20

25

30

35


Pre-Tax Profit Margin

14.1 14.5 18.5 27.3

31.6 41.4

17.2% 15.6% 15.9%

20.2% 19.9% 21.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

10

20

30

40

50


EBITDA MarginRM million

6.0 7.0 8.7 13.6

23.4 28.3

7.3% 7.5% 7.5%

10.1%

14.7% 14.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0


Profit After Tax MarginRM million

10

FYE Jun (RM million) FY13 FY14 FY15

Group Revenue 135.2 158.7 196.8

Y-o-Y Growth (%) +16.3% +17.4% +24.0%

Profit from operations 20.7 25.7 32.7

Y-o-Y Growth (%) +48.9% +24.2% +27.2%

Margin on operations (%) 15.3% 16.2% 16.6%

• GDEX has been able to sustain its strong growth due to its constant growth in

revenue and its operational efficiencies

• GDEX’s growth is driven by the organic growth of the Express Delivery Service

business and stronger performance in its Logistics Division

• GDEX reports lower effective tax rate as the Group was awarded Pioneer Status by

Malaysian Investment Development Authority (“MIDA”)

GD Express SB (100% owned subsidiary) obtained the Pioneer Status

Certificate from MIDA on 24 January 2014.

The first courier company to have obtained pioneer status from MIDA

Provides for the tax exemption on 70% of GDEX’s statutory income on

Integrated Logistics Services related activities

Valid for 5 years with effect from 26 Sep 2012 to 25 Sep 2017

Renewable for another 5 years upon initial expiry

Sustaining Strong Growth Up To FY15

11

• Express Delivery Service

business accounted for 95.7%

and 87.9% of group revenue and

PBT respectively for FY15.

• Logistics Division turned

profitable in FY15 on strong

volume growth, albeit with

smaller base

• Logistics Division reported

72.7% growth in revenue for

FY15 with healthy PBT margin of

45.2%

Segmental Breakdown

FY15 Revenue Contribution By Division FY15 PBT Contribution By Division

FYE Jun (RM million) FY13 FY14 FY15

Group Revenue 135.2 158.7 196.8

Y-o-Y Growth (%) +16.3% +17.4% +24.0%

Express Delivery 134.0 153.7 188.4

Y-o-Y Growth (%) +15.6% +14.7% +22.6%

Logistics 1.2 5.0 8.4

Y-o-Y Growth (%) +210.0% +316.7% +68.0%

Profit Before Tax 19.3 24.3 31.3

Y-o-Y Growth (%) +56.9% +26.0% +28.8%

Express Delivery 19.4 22.1 27.5

Y-o-Y Growth (%) +56.5% +13.9% +24.4%

Logistics (0.104) 2.2 3.8

Y-o-Y Growth (%) +44.1% NM +72.7%

Express Delivery 95.7%

Logistics 4.3%

Express Delivery 87.9%

Logistics 12.1%


Operations Overview

13

• Adopted “Hub and Spoke” distribution system to enhance efficiencies

• 67,000 sq ft all-weather central clearing hub in Petaling Jaya, Selangor, Malaysia

• Comprehensive domestic network with a strengthened network infrastructure of 193 stations; 1 operation headquarters, 61 branches, 2 affiliate stations, 55 agents,19 lodge-in centres and 56 reseller agencies.

Customer calls

GDEX Customer

Service for a

pick-up service

GDEX assigns

dispatch to pick-up

shipments and bring

them back to the

GDEX station

Shipments

from station

are directed

to the GDEX

HQ Hub

The shipments

are sorted and

distributed at

the GDEX HQ

hub

The sorted

shipments are

sent to the

designated

GDEX stations

Shipments

delivered to

recipient

Express Delivery & Logistics Division

The Heart Of Express Delivery Services

Catering to Customers’ Logistics Needs

Customer delivers

bulk materials to

GDEX warehouse

These materials are

sorted systematically

and repacked into

customised GDEX

boxes

The boxes are

sealed and

addressed to

the recipients

The boxes are

sent to the

GDEX HQ Hub

for sorting and

distribution

The sorted

boxes are sent

to designated

GDEX stations

The boxes

are then

sent to the

recipients

• Enabling greater efficiencies and cost savings for customers through provision of innovative logistics solutions

• Boosting warehousing facilities and freight handling resources to complement express delivery services

• As at June 2015, total warehouse space (for logistics operations) is 105,726 sq ft.

14

331 335 397

453

578

FY11 FY12 FY13 FY14 FY15

Sorting Capacity, Fleet Size and Workforce

Fleet Size (No. of Trucks & Vans)

No. of Staff

Source : Company data

Sorting Capacity (Parcels per day)

• Current sorting capacity can sort 72,000 parcels per day. Able to hit 90,000 parcels per day on stretch level.

• Plans to further expand the capacity to cater for the growing demand.

30000

60000 60000

72000 72000


Parcels per day

1718 1826 2013

2315 2761


• Large fleet size is needed to service the extensive network we have established in Malaysia and Singapore.

• Also gives GDEX the economies of scale and created a barrier of entry.

• Mainly local staff due to regulations requirement. Foreign workers are hired to work in the sorting hub.

• Incentive based remuneration structure encourage higher staff productivity.

15

• GDEX pursues Six Sigma measurements into all

operational procedures

Improve quality of process outputs to minimize defects

Advance to Six Sigma to encompass elimination of

defect, overproduction, waiting, non-utilized talent,

transportation, inventory, motion, extra-processing and

achieve greater capability of performance

Well Recognized Brand Underpinned by Blue Chip Clientele

Established High Quality Customer Base Third Party Accreditation

• Successfully built up strong customer base by:

Delivering services with international standards

Producing the best reliability and security of

packages

Six Sigma

2012

2009

2003 • Obtained ISO 9001:2000 Certification

First domestic express carrier company in

Malaysia to achieve ISO status

• Upgraded its Quality Management System to

ISO 9001:2008

• Obtained ISO 14001:2004 certification for

Environmental Management System (EMS)

Marks a milestone in GDEX’s ongoing

commitment to protect and conserve the

environment

We have established a broad and diverse

client base over the years

Our wide sector coverage is focused on

minimising concentration risk for the company

Our client base consist of various industry

leaders in finance, retail, media, technology

and telecommunications

2013 • Frost & Sullivan Malaysia Excellence Awards -

Domestic Express Services (Provider of the Year

for the Private Sector)

2014

• Frost & Sullivan Malaysia Excellence Awards -

Domestic Express Services (Provider of the Year

for the Private Sector)

• First courier company to be awarded Pioneer

Status by the Malaysian Investment

Development Authority (MIDA)

2015

• Forbes’ Asia’s 200 Best Under A Billion

• Frost & Sullivan Malaysia Excellence Awards -

Domestic Express Services (Excellence in

Growth)


Industry Overview

17

Top players in Malaysian market

62%

38%

International Domestics

Top 10 Players

Domestic International

Pos Laju DHL Express

GD Express Federal Express

City-Link Express United Parcel Service

Nationwide Express TNT Express

Skynet Worldwide

ABX Express

Source: Industry Performance Report 2013 by Malaysian Communication and Multimedia Commission

• International players captured larger market share (in terms of revenue) as they focus on international express service which require higher shipping rate compared with domestic shipping rate.

• Among the top ten players, GDEX captures 6.2% in 2013. • Among the six local players, GDEX captures 15% market share, after Pos Laju

(market share 23%).

18

Business Convergence

Businesses from various

sectors/industries are converging

Goods/Services will

be delivered in

Digital Platforms and Devices

Digital Form:

Movie tickets

Flight tickets

Shopping vouchers

Dining vouchers

E-Book

Physical Form:

Electrical appliances

Sports equipment

Motorcycle

Kitchen appliances

Luxury items

Efficiency is the key

Customers Suppliers Intermediaries

Customer Driven

• Sorting hub & spoke distribution channel with large number of consignment but smaller packages

Shipper A

Shipper B

Shipper C

Receiver A

Receiver B

Receiver C

Sorting Hub

19

Riding On The E-Commerce Potential in ASEAN

7.8

7.2

5.8

4 to 5 Around or below 1

Retail sales made online in 2014 (as percentage of total retail sales) Online activity in ASEAN 6*

People who go online

Online shopping in ASEAN is still at

its infancy

Make up 29% of the total population

Less than 1% of global online retail

Are young: 70% are below 35 years old

It has 3-4% of global GDP

Spend 2-4 hours per day on internet

8% of world population

Love social media: 29% of online time is spent on social media

1.3 1.3 1.0 1.7

0.9 0.8

Indonesia Malaysia Philippines Singapore Thailand Vietnam

25-30

10-15 8-12

7-10

12-15

5-7

ASEAN’s E-Commerce potential

*Note: ASEAN 6 comprises of Indonesia, Malaysia, Singapore, Thailand, Vietnam and Philippines

Market size (USD bn) 2013 level Potential


Thank You

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