Gati Investors Presentation FinalV1

8/10/2019 Gati Investors Presentation FinalV1

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Gati Limited

Investor Presentation August 2014


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The presentation contains certain forward looking statements concerning future

business prospects and business profitability of Gati and its affiliates, which are subjectto number of risks and uncertainties that could cause actual results to differ materiallyfrom those in such forward looking statements. The risks and uncertainties relating tothese statements include, but not limited to, risks and uncertainties regarding fluctuationin earnings, our ability to manage growth, competition(both domestic and international),economic growth in India and the target countries for exports, ability to attract andretain highly skilled professionals, time and cost overruns on contracts, our ability tomanage our international operations, government policies in action with respect toinvestments, fiscal deficits, regulations, etc., interests and other fiscal costs generallyprevailing in the economy. The company does not undertake to make anyannouncements in case of these forward looking statements become materiallyincorrect in future or update any forward looking statements made from time to timeby or on behalf of the company.

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FORWARD LOOKING & PRECAUTIONARY STATEMENT


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INDEX

Company Profile

Unparalleled Infrastructure

Key Milestones

Key Financial Metrics

GATI Group Structure

GATI-EDGE & IT Capabilities

Key Business Verticals

Other Verticals

Debt Management

Capex Plans and Financial Highlights

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4

5

7

6

8

10

15

18

19

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22Awards & CSR Activities

24Way Forward


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Hub & Spoke

First company to introduce time sensitive movement of

commercial packages on door to door delivery concept inIndia since 1989

Multimodal capabilities and delivers more than 5.5 million

commercial packages every month

Company identified potential of E Logistics business and isgrowing it as a separate business vertical since FY 2011-12

Gati moves 1.4% of Indias non -service GDP on itsnetwork

One stop solution to all logistics requirements

Covers 667 district out of total 671 districts. LargestExpress network in India

Company ventured into the reefer truck transportationthrough 100% acquisition of Kausar India Ltd. Currently ithas a fleet strength of over 200 Vehicles.

PROFILE

World Class ITCapabilities

Largest ExpressNetwork

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5000+ Young

Work Force

2.6 Million Sftof Warehouse

Capacity

24X7 CallCentre

Over 200Reefer Trucks

2 e-Fullfilment

Centres

4500 FleetSize

400+ Truck

Partners

1300 PlusGati Business

Associates

500+ Bikers

600+ Officesincluding 16

Distributionhubs

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UNPARALLELED INFRASTRUCTURE


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1989-95

1996-00

2001-06

2007-14

Introduced door to door service

Introduced cash on delivery

Expansion to SAARC

Received ISO Certification

Introduction of 24*7 customerconvenient centre

Launch of MechatronicWarehouses

Introduction of ownCustomized ERP GEMS

Launched India-centric distributionsolutions and forayed into Asia Pacificregion

Gati Millennium Express: First cargotrain of Gati

Ventured in Cold Chain Logistics

Joint Venture with KWE Japan

Ventured into E Commerce Logistics

Project Udaan: Business transformationexercise with IBM

Expansion of Cold Chain Vertical throughwarehouses

Creating Vision 2020

Establishing e-Fulfillment centers for e-Commerce clients

KEY MILESTONES

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Gati Limited(Consolidated)

Partly OwnedSubsidiaries

Wholly OwnedSubsidiaries

Gati Limited

(Standalone)GATI-KWE(70%)

Gati Kausar

(Cold Chain)

Gati Import Export(Trading)

Zen Cargo Movers

(CHA)

Gati Asia Pacific PteLtd (Singapore)

E -Commerce

Freight Forwarding

Fuel Stations

Surface Express

Air Express

Parcel Train (GTS)

Supply Chain

Service OfferingSubsidiary

GATI GROUP STRUCTURE

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KEY FINANCIAL METRICS

For FY 2014 the figures of Total Revenue and EBITDA are pertaining to period of July 2013-June 2014. Reserves & Surplus and Gross Block figures are as on 31 st March2014 7

Rs. In Millions

* *

**

*


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GATI-EDGE

CustomizedServices

One StopSolution For

Logistics

World ClassIT Capabilities

Pan IndiaMultimodalNetwork

Professional

Management

Pioneer InExpress

Distribution

THE GATI-EDGE

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Integratedtechnology

systems

Customer relationshipmanagement

Employeeproductivity

Real time shipmentinformation

24 X 7 Customer care

Customized warehousemanagement

Customer account

management(Invoicing / transitdetails)

Gati EnterpriseManagement System(GEMS)*

Oracle Financials

Oracle CRM

WarehouseManagement System

HRInformationSystem

Vehicle TrackingSystem

Business Intelligence

Mailing systems

Enterprise Management

WORLD CLASS IT CAPABILITIES

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KEY BUSINESS VERTICLES

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GATI-KWE: EXPRESS DISTRIBUTION

GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS

GATI: ECOMMERCE LOGISTICS SOLUTIONS

OTHER BUSINESS VERTICALS


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Gati hived off its Express Distribution and Supply Chain division to its joint venture with Kintetsu WorldExpress (KWE), a Japanese logistics player

With close to 80% contribution in the total revenue and ~16% market share in the industry, This is one ofthe key verticals for the Company

Provides express surface cargo, premium air cargo, rail transport solutions, supply chain management &warehousing solutions through pan-India presence

Fleet strength of over 4,500 vehicles and a warehousing capacity of 2.6mn sq. ft.

Direct relationships with air line companies for moving air cargo

First to introduce parcel train movement in India, runs parcel train between Kalyan-Kolkatta Guwahati

Revenue Break-up (FY2014) W ell spread across the country with dominance in surface transport

79%

8%

11%

2%

Mode of Transport

Surface Rail Air Others

15% 14%

13%

13%

8%6%

31%

Industry-wise

Pharma IT Hardware Auto AncillaryEngineering Textiles FMCGOthers

24%

35%

10%

31%

Geography

South West East North

B u s i n e s s

O v e r v

i e w


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12

13-14 14-15

116 139

20%

13-14 14-15

1063 1230

16%

GROWTH PLAN

REVENUE in Cr

EBITDA in Cr

Key Highlights

Grown at 16% in FY 13-14 to reacheda annual turnover of 1063Cr.

EBITDA improved to 10.9% in FY 13-

14.

Expected to grow consistently at 16% .

Delivers over 5.5 Million packages in a

month

Project Udaan to continue unlocking

values.


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Leading integrated player in the reefer truck transportation.

Fleet size of over 200 vehicles.

Climate control capability from +20 degrees to 20 degrees Celsius.

Transporting 2 Lac tons annually.

ISO 9001:2008 certified.

Pan India network.

Plan to set up 10 cold chain warehouses across 8 strategic locations with atotal capacity of approximately 43,000 pallets.

GATI KAUSAR: INTEGRATED COLD CHAIN SOLUTIONS

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13-14 14-15

4 7

75%

13-14 14-15

47 55

17%

GROWTH PLAN

REVENUE in Cr

EBITDA in Cr


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ECOMMERCE LOGISTICS

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14-15E13-1412-1311-12

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12

REVENUE in Cr

Amongst top 5 E-logistic players in the country.

Capacity to deliver over 23000 shipments per day.

Provides value added services: COD, packing, reverselogistics, E-Fulfillment.

525 Bikers for last mile delivery.

Growth over 100% YoY and expected to sustain for nexttwo years

2.6 Mn packages delivered in last 9 months.

6 e-Pick centers & 3 e-Pack Center.

Growth Plans

Increase delivery capability to 30,000 shipments perday by Dec 2014.

Capacity expansion: Bikers 1000 NosE-logistics outlets - 90 NosE-Fulfillment Centers - 19 Nos

Tabs to all Bikers for real time track & trace.

Customization of IT to suit E-ta ilers requirements.


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Offers an end-to-end solution for companies including international freight forwarding, customs handling, import ofgoods, warehousing and last-mile delivery to the end-customer (B2B, B2C)

OUR CUSTOMERSNew entrants/ Single-brand players entering Indian marketCompanies wanting to test waters before establishing their own set up, including product manufacturers with facilitiesoutside countryTrading companies procuring from multiple product manufacturers abroadOrganizations with philosophy of focusing in core strength

Enables import, trade and distribution in India

Forayed into a integrated supply chain contract with a major player in the hospitality industry to manageinventory requirements

Gati ImportExport Trading

Ltd. (GIETL)

OTHER VERTICAL: GIETL

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Benefits: Stabilization of delivery patterns will drive behavioral change within the procurement processat individual hotels

Need: Supply chain framework to build and improve efficiency in the domestic hospitality industryprocurement process. Current engagement with one of the largest hotel chains comprising of close to100 hotels in 40 locations across India

CURRENT SETUP

SUPPLIERSHOTEL

LOCATIONS

F

F

F:

:

F

Decentralizedsupplies ordering

systemHigh transactioncosts for suppliersand hotels

Uncertain deliverylead times

Excess inventoryholding at Hotelstores

Improved servicelevels

Reduction inInventory withinthe supply chain

Reduction inoverall logisticscosts

Previous Setup SUPPLIERSHOTEL

LOCATIONS

FF

F:

:

F

GIETLSOLUTION

InventoryOwnership

Fixed Supply Chain Services Fee(Primary, warehouse, secondary, trading)

CASE STUDY: GIETL

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China

Hong Kong

SingaporeThailand

Nepal Bhutan

Bangladesh

Caters to Asia Pacific regions through own offices and other countries through agents

Provides cargo movement between SAARC nations through surface

InternationalFreightForwarding

GATIS PRESCENCE IN AISA PACIFIC & SAARC REGION

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DEBT MANAGEMENT

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GATI-KWE credit rating hasbeen upgraded by ICRA. Longterm facilities : A (A Minusprevious year), Short termfacilities: A1 (A2 Plus previousyear).

Debts are reduced throughbetter working capitalmanagement.

Debts of Gati Ship are

excluded since June 2014, dueto de-subsidarization

Debts are expected to becontained below INR 500Crores.

Rs. In Millions


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Future Plans

To invest in cold chain warehouses to offer integrated solutions to the clients

To invest in establishing 19 e-Fulfillment centers across so many cities to offer

customized and value added services to e-Commerce clients

To upgrade and enhance IT infrastructure to offer customized solutions and meetfuture growth initiatives

Entity FY15 FY16 FY17 Total

Gati Kausar 690 913 665 2,268

Gati (e Commerce Vertical) 200 150 150 500

GKEPL 200 200 250 650

Total 1090 1263 1065 3418

(Amt. in Rs. Mn)

CAPEX PLANS

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Particulars Audited Projected

Year FY 13 FY 14 # FY 15E*

Total Income 12,895 15,029 17,577

EBIDTA 987 1,263 1,687

Depreciation 248 294 298

EBIT 740 969 1,388

Finance cost 437 433 417

Profit before tax 303 535 970

(Consolidated figures in Rs. Mn)

# Figures are annualized as the Company changed its financial year end to March from June with financial year 2013-14

FINANCILA HIGHLIGHTS: PROFIT & LOSS

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Year Award Category / By Award

2014 Confederation Of Indian Industry Scale Award for Supply Chain and Logistics Excellence

2014 3 rd Asia Manufacturing Supply Chain Summit Achievement in Continuous Improvement

2014 ICC Supply Chain and Logistics Excellence Awards Road Transportation

2014 Confederation Of Indian Industry 5S Excellence

2014 SONY Best Warehouse Award

2013 Rasbic Awards 2012-13 Recruiting & Staffing Best in ClassAwards

Most Innovative Recruiting & Staffing Program/Initiative

2013 Logistics and Supply Chain Leadership Awards ELSC CEO of the Year Ms. Chitra Shinde

2013 Logistics and Supply Chain Leadership Awards Best Road Service Provider of the Year

2013 Foundation for Liberal & Management Education 30 Best HR Leaders - Mr. J. Subramanian

2013 Carlson Rezidor Hotel Group Corporate Social Responsibility

2013 Mahindra Transport Excellence Awards "Lady Transport Personality of the Year-2012" & "LadyTransporter of the Year 2012-RegionalWinner South" - Ms. Chitra Shinde

AWARDS

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Adopts Tiger in a Zoo,Hyderabad Plantation Drive

Support to WOW

Project

Support to Uttarakand

calamity

Book Donation toGati School

Blood Donation Camp,Hyderabad

Inauguration ofComputer Lab at

Hyderabad

Clothes DonationDrive

CSR

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Expansion

Efficiency

Innovation

WAY FORWARD

Target to deliver 1 million packages per day by 2020

Group to grow at a rate of 15 17% in FY 14-15

EBITDA margins to improve by 50 basis points

Exit from shipping business completely

Debt to be contained below INR 500 Cr & leveraging theimproved credit rating of GATI-KWE

Well positioned to reap the benefits of proposed GSTimplementation

Capital infusion & construction of cold chain warehouses

Growing e-logistics business through a asset light model

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THANK YOU

Gati Investors Presentation FinalV1

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