Agility Earnings Call Presentation - Q1 2021 Results Thursday, 20th May 2021 - Agility ...
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Thursday, 20th May 2021 Agility Earnings Call Presentation Q1 2021 Results
Disclaimer
This presentation is strictly confidential and is being shown to you solely for your information and may not be
reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any purpose.
This presentation has been prepared by Agility Public Warehousing Company KSCP (“Agility”) and reflects the
management’s current expectations or strategy concerning future events and are subject to known and unknown risks
and uncertainties.
Some of the statements in this presentation constitute "forward-looking statements" that do not directly or exclusively
relate to historical facts. These forward-looking statements reflect Agility’s current intentions, plans, expectations,
assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which
are outside Agility’s control. Important factors that could cause actual results to differ materially from the expectations
expressed or implied in the forward-looking statements include known and unknown risks. Agility undertakes no
obligation to revise any such forward-looking statements to reflect any changes to its expectations or any change in
circumstances, events, strategy or plans. Because actual results could differ materially from Agility’s current
intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking
statements contained in this presentation with due care and caution and seek independent advice when evaluating
investment decisions concerning Agility.
No representation or warranty, express or implied, is made or given by or on behalf of Agility or any of its respective
members, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the
information or opinions contained in or discussed at this presentation.
2
Agenda
1 DSV-GIL Transaction overview
2 Financial Highlights
3 Business Segments
4 Sustainability
5 Q&A
3
DSV-GIL Transaction Overview
4
Key terms of DSV acquisition of Global Integrated Logistics
Agility to remain a key supply chain player and becomes the second largest shareholder
in DSV and hold a Board seat
• DSV will acquire Agility’s Global Integrated Logistics (“GIL”) business in exchange for 19.3M shares
Overview • After completion of the transaction, DSV has agreed to nominate an Agility designee to DSV’s Board of Directors
• Agility will be the 2nd largest shareholder in combined company, based on today’s shareholder register
Transaction Terms • GIL business valued for an Enterprise Value of ~ $4.2 Bn (KWD1.3 Bn) and Equity Value of $4.1 billion (KWD 1.2 Bn) at
announcement
• Expect GIL to be reported as part of Agility financials until Completion as per IFRS 5
Reporting • Post Completion the management intends to report the investment in DSV as a Financial asset at fair value
through other comprehensive income i.e. Through Equity as per IFRS 9. This accounting treatment is subject to
final Board approval.
Timing • Completion of the transaction is expected towards the end of the third quarter of 2021
• Services Agreement: DSV to provide Agility with certain services in connection with its SHIPA business
• Framework Agreement: DSV to (i) appoint Agility as the developer of choice for any development in MEA
Other Agreements
(excluding, South Africa), India; and (ii) provide Agility with the opportunity to be a strategic partner in any future
real estate funds or investments
5
*The transaction is subject to satisfaction of regulatory conditions and approval by Agility’s shareholders.
Agility has been clear that consolidation is a priority
And the timing is right to act now
Agility has been open to Changing industry
Increased scale is needed
consolidation for some dynamics make this good
in a competitive sector
years now timing
Wider industry consolidation has GIL was built by acquisition; it’s how Industry even more attractive for M&A
been occurring for years the industry works because of:
Economies of scale are critical in GIL today is subscale; ranked 21st COVID-19: supply chain disruption,
freight forwarding, with significant in the industry, in terms of logistics as an essential industry
commercial and operation benefits Revenues in 2020 E-commerce: accelerated
The industry is getting more Some past consolidation and dramatically, with gains in the last
competitive, with growing customer merger attempts were made by GIL; year equivalent to gains in the last
expectations around better but targets are scarce (with high ten
capabilities and reach valuation) and integration risks are Digital: Technology is reshaping
material supply chains and underlying cost
considerations of manufacturing
6
Why DSV
DSV shows significant financial robustness
DSV has secured a high rating from both S&P (A-) and Moody’s (A3)
The recent EBIT performance is strong, and superior if compared to GIL’s
The firm shows resiliency through economic cycles, being solid and supported by reputable shareholders
DSV has a proven track-record of integration
DSV has extensive experience of integrating acquired businesses and delivering synergies
It has also shown significant improvements in terms of ability to grow organically
DSV and GIL have good complementarity
The two firms combined will become a strong player in the market, taking advantage of significant synergies
Good complementarity in terms of products and services offered, geographical focus, and customers served
Similar corporate culture with focus on customer service, entrepreneurship and corporate responsibility
DSV is valuing GIL at a significant premium
DSV offer is valuing GIL at an enterprise value of $4.2 Bn as of announcement date
This offer comes with a significant premium to GIL standalone valuation based on a range of methods including current trading level
of peers, precedents and intrinsic valuation
DSV and Agility will explore other forms of collaboration
In addition to the offer for GIL, DSV has offered other forms of collaboration
These would cover different areas, such as Real Estate, e-commerce, CSR platform and more
Agility is not exiting the logistics industry, it remains a key player in Supply Chains Globally
7
The combined company creates a top-three industry leader
Third-party logistics providers by 2020 revenue in USD billion
1 DHL Logistics (DE) 32.4
2 Kuehne + Nagel (CH) 25.4
Combined DSV Panalpina + Agility… 21.7
3 DB Schenker (DE) 19.4
4 Nippon Express (JP) 18.5
5 DSV Panalpina (DK) 17.7
C. H. Robinson (US) 15.1
6
XPO Logistics (US) 11.3
7
UPS (US) 11.0
8
Expeditors (US) 10.1
9
J. B. Hunt (US) 9.2
10
Dachser (DE) 7.7
11 Sinotrans (CN) 7.4
12 CEVA Logistics (CH)
(FR) 7.4
13 Bolloré (FR) 6.6
14 SNCF Geodis (FR) 5.8
15 Kintetsu (JP) 5.2
16 Kerry Logistics (HK) 5.1
17 Gefco (FR) 4.9
18 Samsung SDS (KR) 4.8
19 NYK Group (JP) 4.7
20 Rhenus & Co. (DE) 4.7
22 Agility GIL (KW) 4.0
Source: Journal of Commerce, DSV estimates
8
DSV Panalpina Diluted Adjusted Earnings per share (DKK)
16% (20x) CAGR 2002 – 2020 , consistent long term performance
33.7
26.5
22.1 22.1
18.4
12.9 13.4
9.5 10.1 10.5
7.8
5.8 6.1 6.2
4.5 3.9
3.4
1.7 1.9 2.3
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1
2021
(TTM)
CAGR +16%
9
GIL / DSV Growth Rate Q1 2021
DSV Q1 2021 GIL
USD 1,227 Mn Net Revenue USD 256 Mn
16.5% Vs Q1 2020 Growth 16.2% Vs Q1 2020
USD 483 Mn EBIT USD 54 Mn
95.8% Vs Q1 2020 Growth 936.6% Vs Q1 2020
39.4% Conversion
Ratio
20.1%
USD / DKK 6.3444 USD / KWD 0.3022
10
Note: DSV numbers based on Interim Financial Report Q1 2021
* DSV Air Freight volumes are still impacted by discontinued Panalpina activitiesGIL Relative Size to Agility Total Group
11GIL’s Relative Size to the Agility Group
Average 6 years (2015-2020) in KWD MM
GIL
Non-GIL
1,449 470 132 97 66
20 10
34 (15%)
(20%)
(26%)
260
(55%)
1,081
(75%)
78 56
98 (85%)
(80%)
(74%)
209
(45%)
368
(25%)
Rev NR EBITDA EBIT NI
12GIL’s Relative Size to the Agility Group
Profit and Loss Impact- KWD Mn
+43
(+3%)
Highlights
1,621
1,578 101 58
GIL Revenues
Non-GIL GIL contributed ~ 70-75% of Agility’s total revenues.
Revenues
1,115 1,216
(71%) (75%) The majority (~75%) of GIL revenues are Freight
Forwarding related Revenues, which makes net
revenues a better metric to assess the impact post
463 405
closing
(29%) (25%)
Non GIL revenue post closing is estimated to be KD
2019A GIL Non-GIL 2020A 400-450mln
Net Revenues
-38
(-7%) GIL contributed 51-57% of Agility’s total net
Net Revenues
532
11 revenues.
49 494
GIL Weight has increase in 2020 due to COVID
272 GIL
(51%) 283 Impact
(57%) Non-GIL
It is expected that post closing NR margin will
improve from ~30% to more than 50%
260
(49%) 212
(43%)
2019A GIL Non-GIL 2020A
13GIL’s Relative Size to the Agility Group
Profit and Loss Impact- KWD Mn
-41 Highlights
(-32%)
127
22
5
GIL COVID impacted the non-GIL segment
(18%) 46 Non-GIL disproportionately, while the impact on GIL was
85 favourable
EBIT
27
(32%) Furthermore, GIL took significant cost measure at the
104 beginning of COVID which helped GIL to outperform.
(82%)
58 However, GIL had to take a one-off restructuring cost of
(68%) ~KD 13mln
Non-GIL performance includes a KD 28mln one off
2019A GIL Non-GIL 2020A
impact of Amghara land
These factors have lead to the increase in the weight of
-45 GIL relative contribution to the overall group’s
(-52%) performance and contributed in 2020, 32% and 29% to
87
Net Income
10 2 EBIT and NP of the group respectively compared to
GIL
(12%) 18% and 12% in 2019.
Non-GIL
47
It is expected that the non-GIL segment profitability will
42 recover post COVID.
77 12
(88%) (29%)
29
(71%)
2019A GIL Non-GIL 2020A
14GIL’s Relative Size to the Agility Group
Balance Sheet Impact* - KWD Mn
Highlights
Total Assets & Liabilities
2,272 2,272
415 GIL
807 (38%) GIL represents 36% and 38% of the total assets and total
(36%) Non-GIL Segment
666
Equity
liabilities respectively in 2020.
(62%)
Net carrying value of GIL is ~KD 390mln as of end of 2020
1,465 Non-GIL segment had the lion’s share of the capex
(64%) 1,191
(100%) /Investments spent over the last 5 years
Non-GIL Net Debt to EBITDA stood at 3.3x in 2020 (2019:
2020 Assets 2020 Liabilities & Equity 1.4x) due to COVID impact on EBITDA as well as the
increase in Capex funding
Non-GIL will be left with 19.3MM
Capex was mainly spent on Reem Mall, Ships in Tristar,
highly liquid (1) DSV shares which
could more than repay the group
Investments in Hyliion and other.
Net Debt to EBTIDA
debt if required 1.61
GIL
Going forward, it is expected that the level of capex in non-
Non-GIL Segment GIL segment will be lower compared to the last 5 year avg.
0.90 3.33 as some projects will be delivered.
1.40
0.86
1.67
2019A 2020A
15
Notes:
1. DSV has $50.5 Bn of Market Capitalization and a L1M average volume traded of 0.43 MM as of 07-May-21 * All are adjusted for Operating LeasesPost Closing Agility’s Profile
Post Closing Profile
Strategic, Controlled Strategic, non-controlled Future Investments
Businesses businesses Agility will have a Strong
Pre-COVD EBIT of ~KD 104mln Estimated Value of KD 1.5bln balance sheet with the ability
($345mln) (~$5bln), 753 fils/share to invest
ALP DSV Organic investments
Tristar NREC Acquisitions
NAS GWC ESG Sector related
UPAC ex RM RM Other
GCS Tech
16Post Closing Agility’s Profile – Financial Snapshot
Well positioned for further growth
Strategic, Controlled Entities Strategic, Non-Controlled Entities
Absolute Value in KWD Mn CAGR (%) Total Value
2020 2016- 2016- M KWD
2016 2017 2018 2019
* 19 20
Total Quoted Securities* 1,453
Revenue 307 346 398 463 405 14.8% 7.2%
Total Unquoted Securities 154
Net Revenue 184 218 234 260 212 12.2% 3.6%
EBIT 65 82 98 104 58 16.9% -2.9% TOTAL 1,607
Debt ** 167
EBIT Margin 21% 24% 25% 22% 14%
NET VALUE 1,441
EBIT Margin
7% 7% 8% 8% 5%
inc. GIL
Agility # of Shares Outstanding 1,913,539,451
Net Debt ** 86
Value per Share (KWD) 0.753
* 2020 Revenue was impacted by the Covid-19 pandemic and 2020 EBIT included a one-
time expense of KWD 28 M associated with the loss of Amghara Land. * Quoted Securities are valued as 18 May 2021 and include DSV, GWC, NREC, Hyliion,
Tortoise II, and Queen’s Gambit shares.
** To calculate net debt of controlled entities total Net Debt in 2020 of KWD 253 M is
adjusted for funds used to fund RM, NREC shares acquisition, and other investments ** Figure includes funds used to fund RM, NREC stake, some Tech investments
.
Note: These figures are based on unaudited estimates and are subject to change upon
finalizing the closing process
.
17Shareholders’ Value Creation
18Company’s Mission 1997
Chairman’s Message “Annual Report 1997”
“Of particular importance is “The Public Warehousing
the realization that our Company (Agility) intends to
company’s future growth become a leading facilitator
prospects will be limited if of commerce and commerce-
we continue to restrict our related logistics through the
activities to the development of high quality
management of low value- and innovative services
added real estate which create value for our
properties” esteemed customers”
“Privatization earmarked a period of change, development and redirection
in the face of new opportunities and risk”
19Value Creation Since Privatization – 1997 to May 2021
(KD Mn)
IRR for 24 years is ~ 28% (~62x of pre-privatization value)
+2,628
(+6,098%) Summary income statement
2,671
CAGR Growth
1997** 2019 2020 1997- 1997-
2,086 2019 2019
Revenue 8.4 1578.6 1620.7 26.9% 188X
EBIT 4.6 125.3 85.5 16.2% 27.2X
43 542 Net income 5.2 89.3 47.5 13.8% 17.2X
Mcap Pre- * Cash Div Value Growth May-21
Privitization
*an estimate of price before privatization 2019 is a better comparison as 2020 has the COVID impact
** estimates of recurring earning power pre-privatization
20The company has a strong track record of value creation
2011-May 2021 (KD Mn)
Value Creation & Aspirations (KD Mn)
Created KD 2 Bln in value for our shareholders with 25% IRR since 2011
Value Growth -1,741 KD Mln (88%)
Dividends1- KD 240 Mln (12%)
758
+55% 2,369
758
234
19%
179 -72 8
+17% 213 -63
+1,982 335 22 -4%
+45% 160
(512%) 19
137 204 318
254 +18% +35%
38 17
+48% 96
42 -272 170
176 35
225
+46% -234
30
387 147 -27%
30
387
Dec 11 MCap 2012 2013 2014 2015 2016 2017 2018 2019 2020 May-21 Total
21
1 Dividends DeclaredKey Takeaways
Agility will be a better and stronger company
Strategic Value Economic Value
Stronger Logistics Future Cooperation Highly Profitable Unlock Shareholders
Financial Flexibility
Platform with DSV Non-GIL Business Value
DSV is one of the best Agility and DSV will explore The deal creates the The remaining business GIL was valued at a
global operators further areas of cooperation resources and flexibility to generates the majority of premium
Agility will be the 2nd with other related Agility explore new opportunities Agility’s earnings power Estimated Return to
businesses- Agility Logistics for next phase of Solid, stable and high- Shareholders Through
largest shareholder Parks, Shipa companies, company’s growth margin Dividends and Share
Agility will have a board and technology ventures Buybacks of c. $150-250
seat Resilient & diversified
MM Per Year for 8.0% Stake
across geographies,
services
22Q1 Financial Highlights
23Group Summary Financial Performance
KD Mn
Revenue Net Revenue
+28.6% +5.1%
485.5 133.9
127.4
377.6
Margin Margin
33.7% 27.6%
Q1 2020 Q1 2021 Q1 2020 Q1 2021
EBIT Net Profit
+31.2% +28.7%
26.9 12.6
20.5 9.8
Margin
5.5% Margin Margin
Margin
2.6% 2.6%
5.4%
Q1 2020 Q1 2021 Q1 2020 Q1 2021 24Group Financial Performance
KD Mn
Revenue contribution by Business Group Net Revenue contribution by Business Group
Y/Y
39.6% 0.3% 28.6% Y/Y
Growth 16.2% -7.0% 5.1%
Growth
GIL
Infra
485.5 133.9
0.3 127.4 -4.3
GIL 10.8
107.6
377.6 Infra
66.5 77.2
379.3 (52%) (58%)
271.6 (78%)
(72%)
60.9 56.7
106.0 106.3 (48%) (42%)
(28%) (22%)
2020 GIL Infra 2021 Q1 2020 GIL Infra Q1 2021
GIL revenue and net revenue increase was driven by strong results in Air Freight and
Contract Logistics
Infra structure revenue came inline with last year numbers, with some infra entities not
recovered completely from COVID-19
25Group Financial Performance
KD Mn
EBITDA contribution by Business Group EBIT contribution by Business Group
Y/Y Y/Y
139.7% -29.1% 19.2% 40.3% 936.1% -44.2% 31.2% 71.7%
Growth Growth
GIL
Infra
54.7 35.2
-8.1 46.4
15.6 -8.4
39.0 26.8 14.8 26.9 16.4
(49%) (46%)
11.2 26.8 20.5
(29%) (58%) 1.6 16.4
(8%) (61%)
27.8 27.9 19.0 18.8
(71%) 19.7 (51%) (92%) (54%)
10.6
(42%) (39%)
Q1 2020 GIL Non-GIL Q1 2021 Q1 2021 Q1 2020 GIL Non-GIL Q1 2021 Q1 2021
Adjusted Adjusted
GIL revenue growth with a range of cost reduction measures resulted in EBITDA growth
Within infra, EBITDA and EBIT performance came inline with last year’s performance, despite
some entities still being impacted by the COVID pandemic
EBITDA and EBIT adjusted for non-operating performance
26Balance Sheet
KD Mn
Assets Equity & Liabilities
Balance sheet Q1 2021 Q1 2020 Variance %
Current assets 708.1 695.9 12.3 1.8%
24.6%
30.3% Current Liabilities
Non-Current assets 1,632.7 1,545.1 87.7 5.7% Current Assets
Total assets 2,340.9 2,240.9 100.0 4.5%
Current liabilities 576.2 491.9 84.3 17.1%
23.9%
Non-current liabilities 559.5 582.0 -22.6 -3.9% Non-Current Liabilities
Total liabilities 1,135.6 1,073.9 61.7 5.7%
Shareholders’ equity 1,154.7 1,113.4 41.3 3.7%
69.7%
Non-Current Assets
51.5%
Highlights
Total Equity
Net Debt1 209.3 165.8
Net Debt1 / EBITDA2 1.4X 1.4X
2,341 2,341
1 Excluding Lease liabilities
2 Pre IFRS16 and annualized
27Statement of Cash Flows
KD Mn
Cash Flow Statement Q1 2021 Q1 2020 Variance % Capex Allocation
Cash from Operating activities
before changes in working capital 54.9 41.7 13.1 31.5%
75 100 94 118 141 46 573
Changes in working capital -8.6 -10.0 1.5 -14.7%
8.4%
11.9% 8.6%
20.5%
14.0% 15.7% ALP
Other Items -6.0 -5.3 27.8%
-0.7 14.2%
29.6%
Net Cash flow from operating 21.7%
40.3 26.4 13.9 52.5% 30.0%
activities 17.9% 29.1% Tristar
58.5%
Capex + Investments 45.5 27.7 17.8 64.3% 5.7% 25.5%
8.9%
14.2%
7.8%
Net Cash flow from investing 10.9% GIL
activities -48.8 -27.6 -21.2 76.6%
16.6%
Free Cash Flow -8.5 -1.2 -7.3 591.2%
12.7% 55.8% 53.0%
50.1% 50.4%
44.2% Other
30.1%
Highlights 20.4%
Conversion ratio (OCF/EBITDA2) 86.7% 67.8%
2016 2017 2018 2019 2020 Q1 2021 Total
CAPEX as % of Revenue 9.4% 7.3%
28
2 EBITDA and OCF as reported 1 Others include Reem mall and corporate investmentBusiness Segments
29GIL Financial Performance Q1 2021
KD Mn
Revenue Net Revenue
+39.6% +16.2%
379.3 77.2
66.5
271.6
Margin Margin
20.4% 24.5%
Q1 2020 Q1 2021 Q1 2020 Q1 2021
EBITDA EBIT
+139.7%
+936.6%
26.8
16.4
Margin
7.05%
11.2 Margin
Margin 21.2%
2.4%
Margin
4.1%
1.6
Q1 2020 Q1 2021 Q1 2020 Q1 2021
30GIL Product Performance
KD Mn
Product Net Revenue Contribution Regional Net Revenue Contribution
% & (absolute) % & (absolute)
AME
AF
EUR
OF
15%
ASP
26% CL (11.7)
MEA
(20.3) PL 7.8%
44.5% 16%
21% Others Growth
(10.9)
(14.1) Growth 27%
(21.0)
21% 16.6%
20% (16.4) 27%
21.3%
(13.5) (18.0)
15.6% 33%
29% 28% (25.8)
31% 26.3%
(19.0) (22.0)
(20.4)
9% 7%
(6.1) -11.7%
(5.4)
26% 24%
21% 17% 9.0% (18.7)
-4.5%% (17.2)
(13.8) (13.2)
Q1 2020 Q1 2021 Q1 2020 Q1 2021
Net Revenue and Volumes Q1 2021
Product NR Growth Volume Growth
Air Freight 44.5% 14.8%
Ocean Freight 21.3% 0.7%
31Infrastructure Group Financial Performance
KD Mn
+0.3
(+0.3%)
Revenue QTD
106.0 106.3
Revenue
-10.2%
-0.3%
Q1 2020 Q1 2021
-8.4 -0.2
(-44%) (-1%) -38.7%
19.0 18.8
-7.0%
10.6
EBIT
8.3%
Q1 2020 Q1 2021 Q1 2021 adjusted
32Sustainability
33The three pillars of our approach to greener supply chains
Ecovadis rated Agility in the top 4% of logistics industry companies for environmental sustainability
ADDRESSING SUPPLY CHAIN ADDRESSING DIRECT
INVESTING IN INNOVATION
EMISSIONS EMISSIONS
Tracking emissions for 600,000 customer 90% of country operations report electricity $18 million invested in green supply
shipments and fuel usage chain tech over 3 years through corporate
ventures team
Supply Chain Optimization ISO 14001 certifications in sites covering Industry engagement
using network rationalization, air freight
densification, and other techniques lead to 50% of all headcount Clean Cargo Working Group (CCWG), Sustainable
Air Freight Alliance (SAFA), the World Economic
considerable cost and emissions savings Forum’s Getting to Zero Coalition, and more
*
34
2018Community partnerships for impact at scale
We have invested in 1,700+ community partnerships in 80+ countries, reaching more than 1.6 million people in need since 2006
Ghana Malaysia India
Vocational training program Supported 1,000 students with school
UNHCR community center for 12,000 refugees
graduates 325 youth refurbishment projects
Kuwait Brazil Bangladesh
Mentored 1,700+ high school students in Set up a computer lab for 600 students
Tutored 2,200 students at two schools
business fundamentals through the ‘Google for Education’ initiative
35Q&A Session
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