NewCo. will launch a contract logistics business in Saudi Arabia providing warehousing, distribution, and value-added services. It aims to become one of the largest logistics companies in the country within 5 years by growing its warehousing space to 120,000 sqm across 5 locations and expanding its fleet to 300 vehicles. The business expects to generate average annual returns of 15% through revenue growth from existing services and expanding into new regions. An initial capital investment of SR 20 million is required to start operations.

1. NewCo. Contract Logistics
Investment Proposal
By
Hashim Al-Fatayerji
0560002340

2. NewCo. Contracts Logistics 2
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2
1
Agenda
Executive Summary
Industry Overview
Financial Model
Financial Projections
SWOT Analysis
Opportunity
7 Organization Chart

3. NewCo. Contracts Logistics 3
Executive Summary:
 NewCo. will aim to attract clients who want to outsource their warehousing and distribution operations by providing them with integrated
end to end services
 NewCo. services will include value added services (packaging, cross ducking, reverse logistics….etc)
 The attractiveness of the new venture is based on:
 Few players in the market most of which are small
 Growth potential in future logistics offering and geographical growth potential across MENA
 Vertical integration into other services including freight forwarding and transportation
 NewCo. focus will be on growth locally by growing its warehousing capabilities to 120,000 m2, while growing its fleet to 300 vehicles in 5
locations across Saudi Arabia within the next 5 years
 Total estimated capital investment SR 20m
 The NewCo. will finance growth from local bank loans estimated at SR 40m over the duration of the first 5 years
 The investment is expected to deliver an average ROE of 15% over the next 5 years
There is an opportunity to launch a Contract logistics (warehousing & distribution) business with the potential of
becoming one of the largest companies in Saudi Arabia in 5 years

4. NewCo. Contracts Logistics 4
Global Logistics Market Breakdown
Outsourced
8.4%
In-house
91.6%
Freight Forwarding
• Non asset-based service that dispatches shipments via asset based carriers and
arranges space for shipments those carriers include sea, air and rail
Contract Logistics (Warehousing & Distribution)
Key logistics Services
Total Market value is at US$
8.3T
Source: Armstrong and Associates, Bain & Co.
• Asset-based or asset-light services that improve, warehousing, distribution with
scaled and customized value-added services for client
Transport Management
• Full Truck Load(FTL) and Less than Truck load (LTL) products are moved between
two points cross city or cross country

5. NewCo. Contracts Logistics 5
The global Market
Highly Fragmented Logistics market share of Major Players
8%
4%
4%
2% 2%
1%
1%
1%
1%
1%
75%
DHL Kuehne + Nagel DB Schenker
Nippon Express C.H. Robinson Worldwide CEVA Logistics
DSV Sinotrans Panalpina
SDV (Bolloré Group) Others
Source: Armstrong and associates At Kearney Reports
• Fragmented industry (4,000 global
Players) Concentrated at top end with
10 companies earning 25% revenues
of the market in 2014
• Continues consolidation of industry
through private equity investments
and M&As
• Major Acquisitions: 2015 OPX
acquisition of Conway and ND
Logistics
• $700 B is 2014 estimate of global SCL
market
• Key growth drivers include
burgeoning global commerce
expanding supply chains, deeper
corporate reliance on outsourcing
services

6. NewCo. Contracts Logistics 6
Saudi Arabia Economic Market
Favorable Macro
Economic
Conditions
In Saudi Arabia
Improving Business
Environment in
Saudi Arabia
Real Demand for
logistics
 Largest economy in the MENA Region. GDP as of 2013: USD 750 B
 Sustainable GDP Growth : over 2.5% p. a
 Increase need to outsource due to the economic downturn
 Saudi Arabia’s FDI inflow is the highest in the MENA region
 Ranked 44th by world bank most attractive country in the world for doing business
 Improving competitiveness and ease of doing business in Saudi Arabia
 Large with high potential: estimated at USD 20 B in 2015
 7% expected growth rate in 2015

7. NewCo. Contracts Logistics 7
Opportunity
Small & medium companies face continuous challenges to manage their operations
Integrated Services Providers
Current Competitive
Landscape
Service Gap
• No particular focus on
warehousing &
distribution
• Limited expertise
• Limited regional coverage
• Lack of integrated
solutions
• Delay in delivery
• Limited customization
capabilities
• Limited technological
capabilities
Automotive
Consumer
Electronics
Healthcare
Construction
Industrial
Client Pain Points
• Non-core Process
• Increasing Complexity
• Technology & Regulations
• Rising costs
• Scale Economics
• Knowledge/Expertise
• Best Process
• Greater Coverage
• Flexibility

8. NewCo. Contracts Logistics 8
NewCo. Strategy
Focus on Contract Logistics Solutions
Strategy
• Vision: To become the most
respected and admired logistics
partner
• Mission: bring value and competitive
advantage through best in class
logistics solutions
Dedicated
Services
Distribution Services
Warehousing Services
Operational
Excellence
Growth FocusInnovation
Talent & Culture
Information Technology

9. NewCo. Contracts Logistics 9
Warehousing
 Turnkey transportation
service
 Drivers
 Vehicles
 Routing & scheduling
 Management &
administrative support
 Solutions design and analysis
 labor balancing and distribution
synergies across sites
 A range of dedicated and multi-
customer transportation solutions
to meet your service needs
 Best practice operational
processes, controls and
management information
Description :
Logistics Services
For customers who want to outsource
entire warehousing, transportation,
procurement, engineering and IT services
For customers who still want to
manage their overall distribution, but
want to outsource vehicle
management, drivers, route planning
& deliveries
Services:
DistributionOfferings:
NewCo. Business Model
Service Offering
Dedicated
For customers who still want to
manage their distribution moves, but
want to outsource the warehousing
operations from it
 Inventory management
 Order processing
 Bar-coding, re-packaging &
labeling
 Order fulfillment, pick and
pack, etc.
 Retail store distribution
 Return management
programs

10. NewCo. Contracts Logistics 10
Wide Range of potential clients across Saudi Arabia

11. NewCo. Contracts Logistics 11
Service Offering
Warehousing
0%
10%
20%
30%
40%
50%
60%
-
10
20
30
40
50
60
70
80
90
Y1 Y2 Y3 Y4 Y5
Revenue Growth
Y1 Y2 Y3 Y4 Y5
Hubs
Growth
1 2 4 8 12
Warehousing Revenue
Revenue Expectation in SR m
• We aim to attract S&Ms companies
who have continuous expansion needs
and warehousing challenges
• We have based our assumptions on
80% pallets utilization and low revenue
price base
• Expansion will be in the main Saudi
cities and we could grow regional after
Saudi leadership positioning is
achieved
• Key advantages will be advanced IT
system, efficient handling and service
flexibility

12. NewCo. Contracts Logistics 12
Service Offering……..Continues
Value Added Services:
• Value added service should become a key
advantage point of our company
positioning
• Our offering flexibility will guarantee long
term relationship with the client and upsell
on the existing offering
• Those services have not been included in
the forecasted revenue due uncertainty and
fragmentation of market needs
• The award of those services will be
considered as separate project and
separate cost structure
Sorting &
Consolidating
Light assembly & sub-
assembly
Manufacturing support
Technical Inspection
Cargo loading &
unloading
Customized packaging
Customized labelingKittingReverse Logistics

13. NewCo. Contracts Logistics 13
Service Offering…..Continues
Distribution
• Distribution is strategic because its
an easier entry point for the
customers and opens the
opportunity for contract logistics
services
• Service will include most types of
trucks and trailers and will grow
based on client demand
• Depreciation will be based on 6
years with 30% salvage value
• Resourcing drivers will be the main
challenge, however we are
planning to attract young Saudis
with competitive incentive plan
0%
10%
20%
30%
40%
50%
60%
70%
80%
-
5
10
15
20
25
30
35
Y1 Y2 Y3 Y4 Y5
Distrebution R Growth
Distribution Revenue
Revenue Expectation in SR m
Y1 Y2 Y3 Y4 Y5
Fleet
Growth
18 53 110 190 290

14. NewCo. Contracts Logistics 14
Geographical Growth plan
Year Expansion Plan
Y1 Jeddah
Y2 Dammam
Y3 Riyadh
Y4 Jubail
Y5 Abha

15. NewCo. Contracts Logistics 15
Performa Income Statement (SR m)
• The company will continue to improve
its margins with more economies of
scale
• Revenue model is based on:
• 45 SR per pallet monthly income
from warehousing with 80%
space utilization
• 18,000 SR average monthly
income from trailer distribution
services
• 6,500 SR monthly income from
truck distribution
Y1 Y2 Y3 Y4 Y5
Revenue
Warehousing 6,601,500 15,403,500 30,807,000 58,374,000 89,262,000
Distribution 1,545,000 4,986,000 11,283,000 20,436,000 32,445,000
Total Revenue 8,146,500 20,389,500 42,090,000 78,810,000 121,707,000
Depreciation 359,000 1,087,000 2,453,000 4,501,000 7,143,000
Insurance 84,375 253,125 590,625 1,096,875 1,771,875
Maintenance 30,900 99,720 225,660 408,720 648,900
Fuel 30,000 90,000 210,000 390,000 630,000
Gross Profit 7,642,225 18,859,655 38,610,715 72,413,405 111,513,225
Salaries 9,699,380 15,834,020 28,729,275 45,621,110 64,677,830
Rent 1,000,000 2,000,000 4,000,000 8,000,000 12,000,000
G & A 1,364,800 1,793,600 2,830,800 4,148,800 5,466,800
Other Dep 942,125 1,408,250 2,261,125 3,887,500 4,571,750
Bad Debt 81,465 203,895 420,900 788,100 1,217,070
Operating Cost 13,087,770 21,239,765 38,242,100 62,445,510 87,933,450
Operating Profit (5,445,545) (2,380,110) 368,616 9,967,895 23,579,776
Interest - 250,000 416,667 500,000 500,000
Zakat - - - 236,697 576,994
Net profit (5,445,545) (2,630,110) (48,051) 9,231,198 22,502,781
-67% -13% 0% 12% 18%
Proforma Income Statement

16. NewCo. Contracts Logistics 16
Performa Cash Flow Statement ( SR m)
• Capital investment will be SR 20
m
• Total borrowing will be around
SR 40m within the acceptable
debt ratio for banks
• All proceeds will be focused on
financing growth mainly in
financing assets and salaries
• We might require more
borrowing based on more
contracts awards of the business
services
Y1 Y2 Y3 Y4 Y5
Cash Beginning of the year 20,000,000 9,495,221 11,350,380 7,351,665 2,832,329
Cash In
Warehousing 5,941,350 13,863,150 27,726,300 52,536,600 80,335,800
Distribution 1,390,500 4,487,400 10,154,700 18,392,400 29,200,500
Equity Raised
Debt Raised 10,000,000 10,000,000 10,000,000 10,000,000
Total Cash In 7,331,850 28,350,550 47,881,000 80,929,000 119,536,300
Total Cash Available 27,331,850 37,845,771 59,231,380 88,280,665 122,368,629
Cash Out
Insurance (84,375) (253,125) (590,625) (1,096,875) (1,771,875)
Maintenance (24,450) (86,950) (203,370) (376,910) (607,570)
Fuel (25,000) (80,000) (190,000) (360,000) (590,000)
Salaries (7,759,504) (12,667,216) (22,983,420) (36,496,888) (51,742,264)
Rent (1,000,000) (2,000,000) (4,000,000) (8,000,000) (12,000,000)
G & A (1,364,800) (1,793,600) (2,830,800) (4,148,800) (5,466,800)
Capex (3,810,000) (7,500,000) (13,920,000) (21,060,000) (27,720,000)
Opex (3,768,500) (1,864,500) (3,411,500) (6,505,500) (6,505,500)
Zakat - - - (236,697) (576,994)
Debt Interest Payment - (250,000) (3,750,000) (7,166,667) (10,500,000)
Total Cash out (17,836,629) (26,495,391) (51,879,715) (85,448,337) (117,481,003)
Cash Position 9,495,221 11,350,380 7,351,665 2,832,329 4,887,626
Cash Flow Projections

17. NewCo. Contracts Logistics 17
SWOT Analysis
Strength:
 Strong network of clients in need of supply chain logistics
services
 Strong relationship with all the existing dealers with good rates
and payment terms
 Limited competition
 Large market demand
Opportunities:
 To be leading full service provider in the MENA Region
 Potential for future vertical integration with other industry
focused companies
 Active M & A industry
Weaknesses:
 Capital Intensive Industry
 Might receive some resistance from clients staff
 Resourcing experienced and competent team
 Developing the IT system might become costly
Threats:
 Unexpected regularity risk
 Political Risk
 Failure to finance growth requirements
 Failure to manage growth

18. NewCo. Contracts Logistics 18
Proposed Organization Chart
CEO
CFO COO
Regional
Managers
Marketing
Manager
IT Manager HR Manager
Finance
Manager

19. NewCo. Contracts Logistics 19
Thank You