3pl Third party
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Third Party Logistics Market – India
December 2012
Executive Summary
Market
More than half of the gross revenue generated in global Third Party Logistics (3PL) market were accounted by top xx players in 2011 3PL Market in India is estimated to reach around INR xx bn by 20‐‐ at a CAGR of nearly xx% during 2011 ‐16 The market is rapidly evolving in India with more customers using outsourcing to reduce cost
Drivers
Challenges
Drivers & Challenges
– Economic growth – High cost of Logistics in India – Growth in Consumer Electronics and Durables Industry – Growth in Auto & Auto Components Sector – Growth in Retail Sector – Phased implementation of VAT – Infra related Govt initiatives Identification Technology – Barcode, RFID
Technology Adoption
P M A S
LE
– Infrastructure Congestion – High Inventory Levels – Lack of Skilled Manpower – Lack of Trust and Awareness
Material Handling Technology ‐ Automated Guided Vehicle System (AGVS) , Information directed System Major Players Company A Company B Company E Company H
Communication Technology ‐ Global Positioning System (GPS) Tracking Information Technology – ERP, eBizNET – SC suite, Vin eRetail
Company C Company F Company I 2
Competition
Company D Company G
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
•Introduction •Market Overview
Global India
•3PL – Shipper Relationship •Drivers & Challenges •Competition •Recent Transactions •Strategic Recommendations •Appendix
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
•Technology Adoption
P M A S
LE
3
Evolution of 3PL
SAMPLE
1990s ‐ Present 1980s 1970s • Value‐added services such as packaging, labeling, systems support and inventory management were offered • Higher outsourcing and more value‐ added services (VAS*) are being offered
• Importance on improved 1950’s & 1960s productivity, cost reduction • Logistics outsourcing and long‐ was limited to term transportation and contracts warehousing • Mainly short‐term transactions
*VAS includes import/export management, customs clearance, clearance, freight forwarding, customer service, rate negotiation, order processing, assembly/installation, distribution, order fulfillment, reverse logistics, consulting services that include distribution network planning, site selection for facility location, fleet management, freight consolidation, logistics audit etc. THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
4
Demand for services of expert logistics outsourcing providers is rising worldwide
Market Overview ‐Global
• Global Third Party Logistics (3PL) market is currently valued at around INR xx bn • Major share of revenue generated is contributed by Region A, Region B and Region C • Factors contributing to the growth of global 3PL market:
xx
Market Size & Growth
INR bn
8,000 6,000 4,000 2,000 0
5.2% x1 x2
P M A S
LE
a4% a5% a3%
20‐‐
20‐‐
Note: Market size considers global 3PL gross revenues and the conversion is done using 2010 exchange rate
Global 3PL Revenues (2011)
a1% Region A Region B Region C Region D Region E a2%
Note: Gross Logistics Revenue of Top 50 Global 3PL players have been considered THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
5
Major Players in Global 3PL Market
SAMPLE
a1% a2% a11% a3% a4% a6% a5% a8% a10% a7% a9% xx is the market leader in global 3PL market
Share of Top 10 Global 3PL Players* (20‐‐)
Player A Player B Player C Player D
Player E Player F Player G Player H
Player I Player J Player K
Note: *among the top 50 global 3PL players THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
6
Third party logistics is fast gaining popularity in the Indian logistics market
Market Overview ‐India (1/3) Market Size and Growth
INR bn xx% x5 x4 x3 x6
• Third party logistics (3PL) market in India is at a nascent stage, currently at around xx% of overall logistics market • Findings
3PL Market Comprises of Two Segments Asset Based
P M A S
LE
x1 20‐‐
x2
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
Share of 3PL in Total Logistics
20‐‐
a1%
Non‐Asset Based
20‐‐e
b1%
Own some of the assets used in supply chain management which often include trucks, distribution centres and warehouses
Does not own such assets Possess flexibility that allows them to respond to clients’ needs on a case‐by‐ case basis
a2% xx xx
b2%
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
7
Cost considerations are the major reasons for the outsourcing of various logistics services
Market Overview ‐India (2/3)
• Findings
60 40
Increase in Share of Local Companies Outsourcing Services
% x2
Share of local companies outsourcing has increased by almost xx times in xx years
Top 5 Reasons for Outsourcing Logistics Services
IMPACT Low Medium
P M A S
0
20
LE
x1 20‐‐
20‐‐
Note: Approximate % share
Use of 3PL Services
Logistics cost goes down by…
High
Logistics cost reduction Focus on core competencies
Improved customer services Improve return on assets To increase inventory turn
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
~xx%
… thereby attracting more customers in this sector
8
3PL Market Presence in India
North City A City B City C City D City E City F City G City I East City J City K City L City M City N
E L P M SA
South City O City P City Q City R City S City T City U City V City W City X
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
West City Y City Z City A’ City B’ City C’ City D’ City E’ City F’ City G’
9
3PL Market Insights (2/2)
• Highest demand for 3PL services comes from the Consumer electronics & durables and pharmaceuticals • Region wise West accounts higher demand for 3PL services in India
Demand from Various Sectors (2011)
a8% a6% a7% a4% a1%
a4% a2% a3% Sector A Sector B Sector C Sector D
P M A S
Sector G Sector H
LE
Demand from Different Regions (2011)
b4% b1% b3%
b2% Sector E Sector F
Region A Region B
Region C Region D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
10
Changes in Use of 3PL Services Globally
Survey Result on Use of 3PL Services Worldwide
Positive Responses on Increased Usage of 3PL Services
% Respondents
100 50 0
SAMPLE
y2 y3 y4 Survey results
% Respondents y
100
x
y1
50 0
3PL
Shipper
Region Region Region Region A B C D
Positive Responses on Returning to In sourcing
% Respondents p 40 q
20 0
Result
Positive Responses on Reduction of 3PLs Used
% Respondents
100 50 0
m
n
Result
3PL
Shipper
3PL
Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX” THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
11
Shipper – 3PL Relationship
% Respondents
100 50
Shipper’s Benefits from Use of 3PL Services
a4 a3 a5
SAMPLE
Result Benefit D Benefit E
a1
0
a2 Benefit B
Benefit A
Benefit C
Success Factors
Openness, transparency & good communication
Result
Flexibility to hold current & future business needs
% Respondents p 100
50 0
Result
Interest in “gainsharing” between 3PLs & shippers
Result
% Respondents
100
x
50 0
y
q
% Respondents m 60
40 20 0
n
3PL
Shipper
3PL
Shipper
3PL
Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX” THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
12
Drivers & Challenges
Drivers
Economic growth High cost of Logistics in India Growth in Consumer Electronics and Durables Industry Growth in Auto & Auto Components Sector Growth in Retail Sector Phased implementation of VAT Government Infrastructure Initiatives
Challenges
Infrastructure Congestion
P M A S
High Inventory Levels Lack of Skilled Manpower Lack of Trust and Awareness
LE
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
13
Economic growth is creating demand for 3PL services and is a major driver in the market
Economic Growth(1/2)
• xx
E L P M SA
Key Economic Indicators Rapid Urbanization
% a4 a5
40 30 20 10 0
Impact
GDP Growth Trend*
%
10 8 6 4 2 0
a1
a2
a3
b1
b2
b3
b4
b5
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
*Note: Figures for financial year – April to March THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
14
Simultaneous cost reduction coupled with high productivity by electronics manufacturers will drive the 3PL market
Growth in Consumer Electronics and Durables Industry
• xx
Impact
E L P M SA
Sales Trends in Consumer Electronics
‘000 xx% x1
20,000
India’s Consumer Electronics and Durables Market
INR bn
600 400 200 0
xx% a1 a2 a4 20‐‐ a3 b1 b2 b3 b4 20‐‐ Type B Type D 15
x2
15,000 10,000 5,000 0
20‐‐
20‐‐
Type A Type C
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
Growing dependence on 3PL services from automobiles and auto components sector to facilitate market growth
Growth in Auto & Auto Components Sector
• xx
P M SA
a5
10,000 5,000 0
LE
b1 20‐‐
Impact
Growth in Automobile Market
INR bn
5,000
Growth in Auto Components Market
INR bn c% b3 20‐‐ b4 20‐‐ b5 b6
a% a1 a2 a3 a4
b% b2 20‐‐
0
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
Note: Auto components includes Engine Parts, Drive Transmission & Steering Parts, Body & Chassis, Suspension & Braking Parts Equipments, Electrical Parts, Others
Growth in Passenger Car Exported from India
Units
50,000 0
Growth in Vehicles Sold in India
‘000 Units e% d1 d2
e1% Type A e2% e3% e4% e5% Type B Type C e6% Type D Type E Type F
d% c1
c2
2,000 1,000 0
20‐‐
20‐‐
20‐‐
20‐‐
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
16
3PL providers need to customize their services and charge competitive rates so as to benefit from India’s retail boom
Growth in Retail Sector
• xx
Impact
P M A S
60 40 20 0
LE
Growth in Retail Market in India
8.4% x x2% x1% 20‐‐ Type A Type B 17
y y2% y1%
20‐‐e
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
Poor and inadequate infrastructure acts as a major obstacle to growth of 3PL market in India
Infrastructure Congestion
•xx
P M A S
Result
LE
Impact
Average speed of Commercial Vehicle (20‐‐)
kmph
100 50 0
y x
Country A
Country B
• xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
18
Lack of trust and awareness is hampering the growth of 3PL sector
Lack of Trust and Awareness
• xx
Impact
3PL Activity as % of Total Logistics Operations (20‐‐)
%
80 60 40 20 0
z y x w
E L P M SA
Vicious Cycle
xx xx xx
Country A
Country B
Country C
Country D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
19
3PL is witnessing better productivity with rising investments in GPS, RFID, online analytics & new supply chain tools
• xx
P M SA
Communication Technology • xx
LE
• xx
Identification Technology
Competitive Advantage Material Handling
• xx
Enterprise Applications
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
20
Major Public Companies – Summary
Net Profit/Loss
2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400
Size of the Bubble represents Market Capitalization in INR bn
m2
1,200 1,000 5,000 10,000 15,000
P M A S
m3
20,000 25,000
LE
30,000
m1
m4
35,000
40,000
45,000
Total Income Company A Company C Company B Company D
Note: All figures are in INR mn and are based on the latest financials available THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
21
Public: Domestic Company – Player A (1/3)
Company Information
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange
Offices and Centres – India
Products and Services
Category Products/Services
P M A S
LE
Mumbai
Head Office
Key People
Name Designation
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
22
Public: Domestic Company ‐ Player A (2/3)
Financial Snapshot
INR mn
40,000 30,000 20,000 10,000 0 20,836.4
Key Ratios
Net Profit/Loss INR mn
34,381.0 35,858.4 3000 2000 1000 0
Particulars y‐o‐y change 2012 (2012‐11)
‐0.19 0.06 ‐0.15 0.48 1.52 ‐11023.91 0.32 4.55 8.78% 6.54% 8.44% 15.42%
Total Income
28,803.1
2011
2010
2009
Profitability Ratios
Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
8.97% 6.48% 8.58% 14.94% 7.61% 5.76% 7.77% 13.74% 13.53% 46.22% 8.07% 19.68% 8.01% 6.24% 8.13% 13.07% 13.95% 36.95% 8.62% 23.75%
2009
2010
2011
Financial Summary
• The company earned a net profit of INR 2,345.9 mn in FY 2012, as compared to net profit of INR 2,228.7 mn in FY 2011
• The company reported total income of INR 35,858.4 mn in FY 2012, registering an increase of 4.3% over FY 2011 • The company earned an operating margin of 8.78% in FY 2012, a decrease of 0.19 percentage points over FY 2011 • The company reported debt to equity ratio of 0.86 in FY 2012, a decrease of 1.63% over FY 2011
P M A S
xx xx xx xx
2012
Cost Ratios
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Current Ratio Cash Ratio Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
LE
14.71% 13.18% ‐ 50.35% 10973.56% 8.27% 7.95% 16.76% 12.20%
0.19 17.24 0.03
91.11% 17.24% 1.65%
90.92% 0.00% 1.62%
92.34% 6.07% 0.68%
91.90% 8.64% 1.12%
Liquidity Ratios
‐48.94% ‐43.37% 1.00 0.26 1.95 0.47 1.82 0.63 2.13 0.83
Leverage Ratios
‐1.63% ‐20.15% ‐3.90% 0.86 0.27 5.39 0.88 0.34 5.61 0.70 0.24 11.27 0.52 0.17 7.20
Key Financial Performance Indicators
Indicators
Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)
Value (27/11/2012)
Efficiency Ratios
Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
35.97% 3.01% 36.26% ‐21677.73% 2.23% 2.53 1.25 5.10 ‐1655.74 2.33 1.86 1.21 3.74 7.67 2.28 3.39 1.39 3.59 7.97 2.37 3.77 1.37 3.11 5.86 2.07
Improved
Decline
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
23
Public: Domestic Company ‐ Player A (3/3)
Key Business Segments
Container Freight Stations Project & Engineering Solutions Multimodal Transport Operations
Key Geographic Segments
Australia & New Zealand Africa Mediterranean America Far East India Europe
%
100% 50% 0%
% 6% 94% 10% 83%
7%
10% 83%
7%
100% 50% 0%
2008
2009
2010
Business Highlights
Description
Overview
News
P M A S
LE
28% 30%
16%
2% 6% 16%
18% 27% 31% 2009
2% 2% 5% 15%
19% 29% 29% 2010
2% 2% 4% 15%
2008
3PL & Warehousing
Acquisitions
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
24
Recent Transactions
Transactions in 3PL Companies in India
Date
Jul‐12 Apr‐12 Feb‐12 Dec‐11 Jul‐11 Apr‐11 Feb‐11 Oct‐10 Oct‐10 Sep‐10 Jun‐10 Mar‐10 Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 Company 7 Company 8 Company 9 Company 10 Company 11 Company 12
SAMPLE
Deals & Investments in 3PL firms
Acquirer/Investor
Company 13 Company 14 Company 15 Company 16 Company 17 Company 18 Company 19 Company 20 Company 21 Company 22 Company 23 Company 24
Target
Amount (INR mn)
xx xx xx xx xx xx xx xx xx xx xx xx
Stake
xx xx xx xx xx xx xx xx xx xx xx xx
Note: This list is not exhaustive THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
25
Strategic Recommendations (1/3)
Issues Recommendations
Lack of 3PL operators in X
• xx
Less X service logistics providers
Non‐compliance of best practices by Y
P M A S
• xx • xx • xx
LE
ZZ imposed on shipping lines which consumes up their profit
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
26
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THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
27
Third Party Logistics Market – India
December 2012
Executive Summary
Market
More than half of the gross revenue generated in global Third Party Logistics (3PL) market were accounted by top xx players in 2011 3PL Market in India is estimated to reach around INR xx bn by 20‐‐ at a CAGR of nearly xx% during 2011 ‐16 The market is rapidly evolving in India with more customers using outsourcing to reduce cost
Drivers
Challenges
Drivers & Challenges
– Economic growth – High cost of Logistics in India – Growth in Consumer Electronics and Durables Industry – Growth in Auto & Auto Components Sector – Growth in Retail Sector – Phased implementation of VAT – Infra related Govt initiatives Identification Technology – Barcode, RFID
Technology Adoption
P M A S
LE
– Infrastructure Congestion – High Inventory Levels – Lack of Skilled Manpower – Lack of Trust and Awareness
Material Handling Technology ‐ Automated Guided Vehicle System (AGVS) , Information directed System Major Players Company A Company B Company E Company H
Communication Technology ‐ Global Positioning System (GPS) Tracking Information Technology – ERP, eBizNET – SC suite, Vin eRetail
Company C Company F Company I 2
Competition
Company D Company G
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
•Introduction •Market Overview
Global India
•3PL – Shipper Relationship •Drivers & Challenges •Competition •Recent Transactions •Strategic Recommendations •Appendix
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
•Technology Adoption
P M A S
LE
3
Evolution of 3PL
SAMPLE
1990s ‐ Present 1980s 1970s • Value‐added services such as packaging, labeling, systems support and inventory management were offered • Higher outsourcing and more value‐ added services (VAS*) are being offered
• Importance on improved 1950’s & 1960s productivity, cost reduction • Logistics outsourcing and long‐ was limited to term transportation and contracts warehousing • Mainly short‐term transactions
*VAS includes import/export management, customs clearance, clearance, freight forwarding, customer service, rate negotiation, order processing, assembly/installation, distribution, order fulfillment, reverse logistics, consulting services that include distribution network planning, site selection for facility location, fleet management, freight consolidation, logistics audit etc. THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
4
Demand for services of expert logistics outsourcing providers is rising worldwide
Market Overview ‐Global
• Global Third Party Logistics (3PL) market is currently valued at around INR xx bn • Major share of revenue generated is contributed by Region A, Region B and Region C • Factors contributing to the growth of global 3PL market:
xx
Market Size & Growth
INR bn
8,000 6,000 4,000 2,000 0
5.2% x1 x2
P M A S
LE
a4% a5% a3%
20‐‐
20‐‐
Note: Market size considers global 3PL gross revenues and the conversion is done using 2010 exchange rate
Global 3PL Revenues (2011)
a1% Region A Region B Region C Region D Region E a2%
Note: Gross Logistics Revenue of Top 50 Global 3PL players have been considered THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
5
Major Players in Global 3PL Market
SAMPLE
a1% a2% a11% a3% a4% a6% a5% a8% a10% a7% a9% xx is the market leader in global 3PL market
Share of Top 10 Global 3PL Players* (20‐‐)
Player A Player B Player C Player D
Player E Player F Player G Player H
Player I Player J Player K
Note: *among the top 50 global 3PL players THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
6
Third party logistics is fast gaining popularity in the Indian logistics market
Market Overview ‐India (1/3) Market Size and Growth
INR bn xx% x5 x4 x3 x6
• Third party logistics (3PL) market in India is at a nascent stage, currently at around xx% of overall logistics market • Findings
3PL Market Comprises of Two Segments Asset Based
P M A S
LE
x1 20‐‐
x2
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
Share of 3PL in Total Logistics
20‐‐
a1%
Non‐Asset Based
20‐‐e
b1%
Own some of the assets used in supply chain management which often include trucks, distribution centres and warehouses
Does not own such assets Possess flexibility that allows them to respond to clients’ needs on a case‐by‐ case basis
a2% xx xx
b2%
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
7
Cost considerations are the major reasons for the outsourcing of various logistics services
Market Overview ‐India (2/3)
• Findings
60 40
Increase in Share of Local Companies Outsourcing Services
% x2
Share of local companies outsourcing has increased by almost xx times in xx years
Top 5 Reasons for Outsourcing Logistics Services
IMPACT Low Medium
P M A S
0
20
LE
x1 20‐‐
20‐‐
Note: Approximate % share
Use of 3PL Services
Logistics cost goes down by…
High
Logistics cost reduction Focus on core competencies
Improved customer services Improve return on assets To increase inventory turn
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
~xx%
… thereby attracting more customers in this sector
8
3PL Market Presence in India
North City A City B City C City D City E City F City G City I East City J City K City L City M City N
E L P M SA
South City O City P City Q City R City S City T City U City V City W City X
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
West City Y City Z City A’ City B’ City C’ City D’ City E’ City F’ City G’
9
3PL Market Insights (2/2)
• Highest demand for 3PL services comes from the Consumer electronics & durables and pharmaceuticals • Region wise West accounts higher demand for 3PL services in India
Demand from Various Sectors (2011)
a8% a6% a7% a4% a1%
a4% a2% a3% Sector A Sector B Sector C Sector D
P M A S
Sector G Sector H
LE
Demand from Different Regions (2011)
b4% b1% b3%
b2% Sector E Sector F
Region A Region B
Region C Region D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
10
Changes in Use of 3PL Services Globally
Survey Result on Use of 3PL Services Worldwide
Positive Responses on Increased Usage of 3PL Services
% Respondents
100 50 0
SAMPLE
y2 y3 y4 Survey results
% Respondents y
100
x
y1
50 0
3PL
Shipper
Region Region Region Region A B C D
Positive Responses on Returning to In sourcing
% Respondents p 40 q
20 0
Result
Positive Responses on Reduction of 3PLs Used
% Respondents
100 50 0
m
n
Result
3PL
Shipper
3PL
Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX” THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
11
Shipper – 3PL Relationship
% Respondents
100 50
Shipper’s Benefits from Use of 3PL Services
a4 a3 a5
SAMPLE
Result Benefit D Benefit E
a1
0
a2 Benefit B
Benefit A
Benefit C
Success Factors
Openness, transparency & good communication
Result
Flexibility to hold current & future business needs
% Respondents p 100
50 0
Result
Interest in “gainsharing” between 3PLs & shippers
Result
% Respondents
100
x
50 0
y
q
% Respondents m 60
40 20 0
n
3PL
Shipper
3PL
Shipper
3PL
Shipper
Note: 1,561 industry executives and managers representing users and non‐users of 3PL services (shippers respondents) and 697 executives and managers representing firms that provide 3PL services (3PL respondents) across the globe were surveyed in “XX” THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
12
Drivers & Challenges
Drivers
Economic growth High cost of Logistics in India Growth in Consumer Electronics and Durables Industry Growth in Auto & Auto Components Sector Growth in Retail Sector Phased implementation of VAT Government Infrastructure Initiatives
Challenges
Infrastructure Congestion
P M A S
High Inventory Levels Lack of Skilled Manpower Lack of Trust and Awareness
LE
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
13
Economic growth is creating demand for 3PL services and is a major driver in the market
Economic Growth(1/2)
• xx
E L P M SA
Key Economic Indicators Rapid Urbanization
% a4 a5
40 30 20 10 0
Impact
GDP Growth Trend*
%
10 8 6 4 2 0
a1
a2
a3
b1
b2
b3
b4
b5
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
*Note: Figures for financial year – April to March THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
14
Simultaneous cost reduction coupled with high productivity by electronics manufacturers will drive the 3PL market
Growth in Consumer Electronics and Durables Industry
• xx
Impact
E L P M SA
Sales Trends in Consumer Electronics
‘000 xx% x1
20,000
India’s Consumer Electronics and Durables Market
INR bn
600 400 200 0
xx% a1 a2 a4 20‐‐ a3 b1 b2 b3 b4 20‐‐ Type B Type D 15
x2
15,000 10,000 5,000 0
20‐‐
20‐‐
Type A Type C
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
Growing dependence on 3PL services from automobiles and auto components sector to facilitate market growth
Growth in Auto & Auto Components Sector
• xx
P M SA
a5
10,000 5,000 0
LE
b1 20‐‐
Impact
Growth in Automobile Market
INR bn
5,000
Growth in Auto Components Market
INR bn c% b3 20‐‐ b4 20‐‐ b5 b6
a% a1 a2 a3 a4
b% b2 20‐‐
0
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
20‐‐
Note: Auto components includes Engine Parts, Drive Transmission & Steering Parts, Body & Chassis, Suspension & Braking Parts Equipments, Electrical Parts, Others
Growth in Passenger Car Exported from India
Units
50,000 0
Growth in Vehicles Sold in India
‘000 Units e% d1 d2
e1% Type A e2% e3% e4% e5% Type B Type C e6% Type D Type E Type F
d% c1
c2
2,000 1,000 0
20‐‐
20‐‐
20‐‐
20‐‐
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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3PL providers need to customize their services and charge competitive rates so as to benefit from India’s retail boom
Growth in Retail Sector
• xx
Impact
P M A S
60 40 20 0
LE
Growth in Retail Market in India
8.4% x x2% x1% 20‐‐ Type A Type B 17
y y2% y1%
20‐‐e
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
Poor and inadequate infrastructure acts as a major obstacle to growth of 3PL market in India
Infrastructure Congestion
•xx
P M A S
Result
LE
Impact
Average speed of Commercial Vehicle (20‐‐)
kmph
100 50 0
y x
Country A
Country B
• xx
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Lack of trust and awareness is hampering the growth of 3PL sector
Lack of Trust and Awareness
• xx
Impact
3PL Activity as % of Total Logistics Operations (20‐‐)
%
80 60 40 20 0
z y x w
E L P M SA
Vicious Cycle
xx xx xx
Country A
Country B
Country C
Country D
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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3PL is witnessing better productivity with rising investments in GPS, RFID, online analytics & new supply chain tools
• xx
P M SA
Communication Technology • xx
LE
• xx
Identification Technology
Competitive Advantage Material Handling
• xx
Enterprise Applications
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Major Public Companies – Summary
Net Profit/Loss
2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400
Size of the Bubble represents Market Capitalization in INR bn
m2
1,200 1,000 5,000 10,000 15,000
P M A S
m3
20,000 25,000
LE
30,000
m1
m4
35,000
40,000
45,000
Total Income Company A Company C Company B Company D
Note: All figures are in INR mn and are based on the latest financials available THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
21
Public: Domestic Company – Player A (1/3)
Company Information
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange
Offices and Centres – India
Products and Services
Category Products/Services
P M A S
LE
Mumbai
Head Office
Key People
Name Designation
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Public: Domestic Company ‐ Player A (2/3)
Financial Snapshot
INR mn
40,000 30,000 20,000 10,000 0 20,836.4
Key Ratios
Net Profit/Loss INR mn
34,381.0 35,858.4 3000 2000 1000 0
Particulars y‐o‐y change 2012 (2012‐11)
‐0.19 0.06 ‐0.15 0.48 1.52 ‐11023.91 0.32 4.55 8.78% 6.54% 8.44% 15.42%
Total Income
28,803.1
2011
2010
2009
Profitability Ratios
Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
8.97% 6.48% 8.58% 14.94% 7.61% 5.76% 7.77% 13.74% 13.53% 46.22% 8.07% 19.68% 8.01% 6.24% 8.13% 13.07% 13.95% 36.95% 8.62% 23.75%
2009
2010
2011
Financial Summary
• The company earned a net profit of INR 2,345.9 mn in FY 2012, as compared to net profit of INR 2,228.7 mn in FY 2011
• The company reported total income of INR 35,858.4 mn in FY 2012, registering an increase of 4.3% over FY 2011 • The company earned an operating margin of 8.78% in FY 2012, a decrease of 0.19 percentage points over FY 2011 • The company reported debt to equity ratio of 0.86 in FY 2012, a decrease of 1.63% over FY 2011
P M A S
xx xx xx xx
2012
Cost Ratios
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Current Ratio Cash Ratio Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
LE
14.71% 13.18% ‐ 50.35% 10973.56% 8.27% 7.95% 16.76% 12.20%
0.19 17.24 0.03
91.11% 17.24% 1.65%
90.92% 0.00% 1.62%
92.34% 6.07% 0.68%
91.90% 8.64% 1.12%
Liquidity Ratios
‐48.94% ‐43.37% 1.00 0.26 1.95 0.47 1.82 0.63 2.13 0.83
Leverage Ratios
‐1.63% ‐20.15% ‐3.90% 0.86 0.27 5.39 0.88 0.34 5.61 0.70 0.24 11.27 0.52 0.17 7.20
Key Financial Performance Indicators
Indicators
Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)
Value (27/11/2012)
Efficiency Ratios
Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
35.97% 3.01% 36.26% ‐21677.73% 2.23% 2.53 1.25 5.10 ‐1655.74 2.33 1.86 1.21 3.74 7.67 2.28 3.39 1.39 3.59 7.97 2.37 3.77 1.37 3.11 5.86 2.07
Improved
Decline
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Public: Domestic Company ‐ Player A (3/3)
Key Business Segments
Container Freight Stations Project & Engineering Solutions Multimodal Transport Operations
Key Geographic Segments
Australia & New Zealand Africa Mediterranean America Far East India Europe
%
100% 50% 0%
% 6% 94% 10% 83%
7%
10% 83%
7%
100% 50% 0%
2008
2009
2010
Business Highlights
Description
Overview
News
P M A S
LE
28% 30%
16%
2% 6% 16%
18% 27% 31% 2009
2% 2% 5% 15%
19% 29% 29% 2010
2% 2% 4% 15%
2008
3PL & Warehousing
Acquisitions
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Recent Transactions
Transactions in 3PL Companies in India
Date
Jul‐12 Apr‐12 Feb‐12 Dec‐11 Jul‐11 Apr‐11 Feb‐11 Oct‐10 Oct‐10 Sep‐10 Jun‐10 Mar‐10 Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 Company 7 Company 8 Company 9 Company 10 Company 11 Company 12
SAMPLE
Deals & Investments in 3PL firms
Acquirer/Investor
Company 13 Company 14 Company 15 Company 16 Company 17 Company 18 Company 19 Company 20 Company 21 Company 22 Company 23 Company 24
Target
Amount (INR mn)
xx xx xx xx xx xx xx xx xx xx xx xx
Stake
xx xx xx xx xx xx xx xx xx xx xx xx
Note: This list is not exhaustive THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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Strategic Recommendations (1/3)
Issues Recommendations
Lack of 3PL operators in X
• xx
Less X service logistics providers
Non‐compliance of best practices by Y
P M A S
• xx • xx • xx
LE
ZZ imposed on shipping lines which consumes up their profit
THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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THIRD PARTY LOGISTICS MARKET IN INDIA 2012.PPT
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