Cargojet Inc. · TSX:CJT
Cargojet — Investor Presentation (March 2023)
30 slides from Cargojet's investor presentation, Mar 3, 2023
Slide 1: Corporate Overview March 2023
Corporate Overview March 2023
Slide 2: Caution Concerning Forward Looking Statements
Caution Concerning Forward Looking Statements This presentation includes certain forward-looking statements that are based upon current expectations which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein
Slide 3: Who We Are
Who We Are Entrepreneurial company that prides itself in building lasting customer relationships while delivering exceptional service Engaged and passionate workforce of over 2,200, with over $980 million in revenues In 20 years, we have become Canada’s #1 cargo airline, only national overnight air
Slide 4: Business Model
Business Model ▪ Only national network that enables next day service for courier industry to over 90% of Canadian population, a strong competitive advantage ▪ Entrepreneurial mindset: allows speed to market, responsiveness and sharp focus on network optimization and cost management ▪ Long-term custo
Slide 5: Ambition and Strategy - Pillars
Ambition and Strategy - Pillars Build the most efficient “middle-mile” Play a key role in enabling air capability to allow couriers and e-commerce growth across North America logistics players to fulfil their time- by understanding and fulfilling emerging sensitive “next-day” delivery promise requir
Slide 6: Ambition and Strategy - Tactics
Ambition and Strategy - Tactics Backbone for all time-sensitive deliveries across Canada for all major logistics and courier players Maintain e-Commerce Cargojet is the de-facto enabler of e-commerce in Canada leadership (B2B and B2C) Cargojet reaches 90% of Canadian population through its overnight
Slide 7: Ambition and Strategy - Tactics
Ambition and Strategy - Tactics Continue to optimize fleet utilization by building both day and week-end networks including Charters and ACMI model Opportunistically utilize west-to-east lanes for non-courier freight opportunities (Asia inbound) and E-commerce growth Exploit adjacent revenue opportu
Slide 8: Key Market Segments
Key Market Segments ▪ Domestic Network (includes Surcharges, and Interline) ▪ CMI – Crew, Maintenance, Insurance ▪ ACMI (Aircraft, Crew, Maintenance and Insurance) primarily dedicated scheduled routes ▪ “All-in Charter” primarily adhoc business ▪ International Cargo Service 2022 Revenue by Cargo 202
Slide 9: Domestic Business - Network
Domestic Business - Network Cargojet operates its network across North America transporting over 25 million pounds of time-sensitive cargo weekly Cargojet operates over 80 flight legs each business night using a combination of B767-300F; B767-200F and B757-200F aircraft to over 15 cities
Slide 10: Domestic Business – The Growth of E-Commerce
Domestic Business – The Growth of E-Commerce E-commerce % of Retail 40.0% 36.0% 35.0% 31.4% 32.4% 30.7% 28.8% 28.0% 28.20% 27.7% 30.0% 27.3% 25.90% 25.0% 25.0% 20.8% 20.4% 20.0% 18.3% 14.7% 15.2% 15.0% 13.1% 13.4% 12.5% 12.40%14.50%14.30%14.50%14.50%14.60% 11.2% 11.3% 11.8% 10.0% 11.8% 11.1% 11.7% 1
Slide 11: Growth of E-Commerce – Canada Only
Growth of E-Commerce – Canada Only Canadian E-Commerce Gross Sales E-Commerce % of (in billions) Retail $8.0 $7.4 $7.2 18.0% $7.0 $6.7 16.0% $5.9 $6.1 $5.8 $6.0 $5.4 $5.3 $5.5 $5.7 14.0% $5.2 12.0% $5.0 $4.5 10.0% $4.0 8.0% $3.0 6.0% 4.0% $2.0 2.0% $1.0 0.0% Mar $- Nov Dec Apr May Jan Jun Aug Sep Fe
Slide 12: Domestic Business - Customers
Domestic Business - Customers ▪ Overnight network reaching 90% of the Canadian population 24/7 ▪ Approx. 75% of Domestic Revenues are under long-term contracts with renewal options Our standard customer contracts include: ▪ Surcharges for uncontrollable cost changes ▪ Guaranteed volume minimums ▪ CP
Slide 13: International Alliances
International Alliances ▪ Fifty-four international Alliances/Partnerships with the world’s leading carriers ▪ Allows these carriers to extend their networks ▪ Expands Cargojet’s brand globally
Slide 14: Domestic Business - OTP 2022
Domestic Business- OTP 2022 ▪ Cargojet must demonstrate operational excellence each night to maintain industry leading on-time performance; Q4 OTP ▪ Cargojet is ISO 9001-2015 and IATA Operational Safety Audit (IOSA) certified; 98.6% ▪ Safety, Reliability and Efficiency are the essential values of Ca
Slide 15: ACMI Business
ACMI Business Cargojet currently operates dedicated ACMI routes on a long-term contract basis with routes such as: ▪ 4 Cross-Border routes at CVG airport and major airports in Canada ▪ 4 routes that operate between airports in Mexico and CVG. ▪ 1 Transatlantic route that operates between YHM and CVG
Slide 16: Adhoc Charters
Adhoc Charters ▪ Utilizing downtime from our existing fleet that operate the Domestic and ACMI networks for Adhoc charters ▪ Competitive in the Adhoc market pricing due to utilization of existing fixed costs are already covered by its Domestic and ACMI businesses. ▪ Lack of consistency in belly carg
Slide 17: Fleet
Fleet All-cargo aircraft operated by Cargojet 2022 2023 2024 2025 2026 Type Payload (lbs.) 2019 2020 2021 Plan Proj. Proj. Proj. Proj. B757-200 ER 84,000 8 8 9 13 17 17 17 17 B767-300 ER 125,000 12 14 16 18 21 21 21 21 B767-200 ER 100,000 1 3 3 3 3 4 4 4 B777-200 ER 233,000 - - - - - 3 4 4 B777-300
Slide 18: Financial Highlights
Financial Highlights ee
Slide 19: Quarterly Revenue and Adjusted EBITDA
Quarterly Revenue and Adjusted EBITDA $300 $100 $267 $247 $90 $236 $233 $250 $234 $80 Adjusted EBITDA (in $millions) $196 $70 189.5 Revenue (in $millions) $200 $188 $172 $162 $160 $60 $140 $150 $50 $119 $123 $91 $117 $87 $110 $83 $82 $83 $80 $81 $40 $70 $71 $100 $64 $67 $30 $51 $45 $40 $36 $20 $50 $
Slide 20: Cargojet Has Achieved New Levels of Revenue & Cashflow
Cargojet Has Achieved New Levels of Revenue & Cashflow $1,200 $350 $980 $300 $1,000 $758 Adjusted EBITDA & Cashflow (in $millions) $250 $800 Revenue (in $millions) $669 $200 $487 $600 $329 $455 $293 $150 $282 $383 $400 $100 $159 $197 $128 $166 $200 $110 $147 $50 $48 $- $- 2017 2018 2019 2020 2021 20
Slide 21: ACMI and Charter Revenues
ACMI and Charter Revenues 120.0 100.0 Revenue (in $millions) 80.0 77.4 40.6 27.6 14.6 27.0 20.1 60.0 24.3 23.8 13.0 10.2 17.5 40.0 66.0 60.5 9.8 54.7 52.7 60.4 20.0 7.3 43.2 38.7 37.2 44.9 6.5 7.2 5.6 32.7 37.1 15.4 15.8 16.0 19.1 19.4 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2019 20
Slide 22: Cargojet Debt on December 31, 2022
Cargojet Debt on December 31, 2022 In Millions Aircraft and Other Leases $89 Borrowings $ 308 Hybrid Debentures $309 ▪ Total debt is approx. 2.15x trailing 12-month Adjusted EBITDA ▪ Cargojet amended Syndicated Revolver in February 2022 with borrowing limit of $600M with an additional $100M increase
Slide 23: Business Outlook
Business Outlook ▪ Long term customer contracts with volume guarantees, annual price escalation and contract renewal options ▪ Highly engaged workforce with a strong safety culture continues to be the backbone of our service offerings ▪ We are well positioned to benefit from long-term secular trends
Slide 24: Reference Material
Reference Material ee
Slide 25: Air Cargo Industry Memberships
Air Cargo Industry Memberships Canadian Courier & Logistics ISO:9001:2015 Quality Association Certified Company The International Air Cargo Industry Air Transportation Association Association
Slide 26: Awards
commerce sil BS wits CANADA'S WALK OF FAME REPORT ON BUSINESS CEO OF THE YEAR ‘e Ernst & Young se) ull) Entrepreneur = COMPANIES Of The Year’ CARGOS/ET
Slide 27: Boeing 767-300ERF
Boeing 767-300ERF Maximum Payload: 125,000 lbs
Slide 28: Boeing 767-200ERF
Boeing 767-200ERF Maximum Payload: 100,000 lbs
Slide 29: Boeing 757-200ERF
Boeing 757-200ERF Maximum Payload: 80,000 lbs
Slide 30: Thank-you
CARGOVET. Thank-you ga, = WT