Machine brings vital care closer to home for Maldivians

Mohammed Esa, Agility GIL SVP of Global Business Development, recently joined executives from DB Schenker on a Gartner panel that looked at the impact of coronavirus on shippers and freight movements.

Four-year award includes demilitarisation, recycling and disposal of surplus assets

LONDON – March 16, 2020 – Agility Defense & Government Services (DGS) was awarded a four-year contract to collect, demilitarise and sell surplus military equipment and property overseen by the Defence Equipment Sales Authority (DESA) of the UK Ministry of Defence.

The contract includes disposal of surplus assets in operational and non-operational locations outside of the UK and has a potential throughput of $12.8 million over the four years.

DESA is the UK MoD arm authorised to sell surplus military equipment and inventory. DESA handles the disposal of all materiel that can generate revenue within the UK and overseas, including aircraft, aircraft spares, ships, boats, river craft and other marine vessels and spares, military and domestic vehicles, with the exception of nuclear, domestic waste and infrastructure.

Agility DGS had held the DESA Middle East overseas disposal contract since 2012 and was initially focused on the draw-down of the UK armed forces in Afghanistan. The latest award expands Agility DGS’s work to include any location globally where the UK MoD have a presence. The new scope of work begins May 1.

Under terms of the contract, the global overseas sales and disposals contract will be managed from Agility DGS’s Stoke-on-Trent facility in the UK, utilizing a customised Quantum ERP system to track inventory, manage the sales process and provide reporting.

Efficient disposal of the surplus inventory saves the MoD and UK taxpayers from the expense of shipping items back to the UK for disposal. Agility DGS will arrange for shipment of valuable items elsewhere if sales are not feasible in local markets.

“In this contract, we outlined the core processes we have developed and refined over seven years of operational delivery,” said Gareth Webberley, Vice President of Agility DGS Europe. “We proposed innovative solutions around the top-level activity management for sales, disposal, recycling and reporting, coupled with Agility’s global footprint and use of the web to broaden our customer reach.”

North Asia chief Soren Poulsen will head up Asia-Pacific operations

BAAR, Switzerland – Feb. 27, 2020 – Agility, a leading global logistics provider, announced today that the CEO of its Global Integrated Logistics (GIL) business, Essa Al-Saleh, will be stepping down after thirteen years in the role and twenty two years with the company.

He will be succeeded by industry veteran Chris Price, who will become GIL CEO on May 1.

“I am truly grateful to Essa for his foundational role in making Agility a leading player in our industry. His partnership, dedication, and commitment to Agility’s journey stand out,” said Tarek Sultan, Agility Vice-Chairman and CEO.

Al-Saleh leaves the company to pursue personal interests, but will continue to offer advisory support.

“Essa’s legacy is spearheading 40+ acquisitions and integrating these businesses into a single network of more than 18,000 employees, operating in 100+ countries, and contributing near $4 billion in revenue,” Sultan said. “Essa is a true leader: he built a strong company culture while driving consistent improvement in growth and profitability. He leaves Agility GIL in a position of strength.”

Successor Chris Price currently heads Agility’s nearly $1.5 billion Asia Pacific logistics business and has been with the company for thirty-six years. Before becoming Regional CEO for Asia, Price served in multiple leadership roles, including CEO Netherlands, CEO for the UK and Ireland, and CEO for Northern Europe, which included the Nordic countries.

“Chris has demonstrated extraordinary skill and leadership at every step. He is customer-centric and experienced in leading high-performing teams,” said Agility CEO Tarek Sultan. “Chris brings strategic vision and deep operational understanding to this role. His strong relationships in our business and with customers will help ensure a smooth transition.”

Soren Poulsen, currently head of Agility GIL North Asia, will succeed Price as regional CEO for Asia-Pacific. Poulsen joined Agility in 2014 as CEO Greater China, and later assumed the role of Area CEO for North Asia which includes Japan, Korea & Taiwan.

In addition to freight forwarding and contract logistics, Agility GIL also provides specialized logistics for projects, chemicals, and fairs and events. GIL also acts as a partner for Shipa Freight, the online freight forwarder founded by Agility to serve small and medium-size companies.

Figures in the table above have been rounded

KUWAIT – February 22, 2020 — Agility, a leading global logistics provider, today reported 2019 net profit of KD 86.8 million, or 52.14 fils per share, an increase of 7% from 2018. Revenue for the year reached KD 1,578.6 million and EBITDA was KD 193.1 million, increases of 1.8% and 24.7%, respectively.

For the fourth quarter 2019, Agility reported a net profit of KD 23.2 million, or 13.93 fils per share, an increase of 4.4% over Q4 2018. EBITDA for Q4 2019 was KD 50.7 million, an increase of 24.3%, revenue remained flat.

Board of Directors Recommendation 

Agility’s Board of Directors has recommended a cash dividend distribution of 20% (20 fils per share), along with 10% bonus shares (10 shares for every 100 shares), subject to approval of the General Assembly.

Agility Consolidated Results

Agility continues to deliver growth despite regional and economic challenges. In 2019, EBITDA grew by 5.6% (pre-IFRS16), following three consecutive years of double-digit growth.

“Global trade tensions, regional economic uncertainty, and financial market pressure in emerging markets all contributed to a challenging year for our logistics business. Internally, the costs associated with our investment in digitization also had an impact; one that we believe will continue in 2020,” said Tarek Sultan, Agility Vice Chairman and CEO. “Driving operational efficiency and better customer service through digitization continue to be a priority. It is an investment in our future.”

Beyond digital, emerging markets also remain a key investment focus. This includes building logistics parks across the Middle East and Africa, the Reem mega-mall project in Abu Dhabi, bringing on new ocean vessels and fuel farms through our fuel logistics subsidiary, and growing rapidly in Africa through our airport services subsidiary.

“We move into 2020 cognizant that we are likely to see volatility in the global economy that may impact our logistics business, as well as slower market activities in certain markets in the Middle East and Africa that may affect certain portfolio companies. That said, we are confident that despite these challenges, we are well-positioned to navigate through them,” Sultan said.

Agility Global Integrated Logistics (GIL)

(All numbers in this section are pre-IFRS 16)  

For the full year 2019, GIL EBITDA was KD 35.4 million, a 1.4% decline from 2018. This decline was mainly driven by the costs associated to the acceleration of the digital transformation.

Year-to-date net revenue improved 2.9%. Net revenue growth was driven by strong Freight Forwarding yields; higher warehouse utilization and new facilities in Contract Logistics; and greater contributions from specialty products (Project Logistics and Fairs & Events). GIL consistently executed well on its commercial strategy, showing growth with selected industry verticals that are strategic priorities such as Life Sciences.

Full year 2019 revenue fell 2.5% and remained flat on a constant currency basis. 2019 was a challenging year for the freight forwarding industry as a whole. According to IATA, 2019 witnessed the lowest air freight volumes since 2009. Full Year Air and Ocean Freight volumes decreased by 6.8% and 0.6% vs. 2018 driven by declining market demand, but were offset by higher yields.

GIL fourth quarter EBITDA was KD 10.9 million, a 3.8% decline from same period in 2018. The decrease was due to higher operating expenses related to new Contract Logistics facilities, as well as investments in digital transformation.

GIL’s Q4 net revenue was KD 70 million, a 3.3% increase vs. Q4 2018.  The net revenue increase was driven mainly by growth in Project Logistics, Contract Logistics and Fairs & Events. The overall net revenue margin improved to 24.8% in Q4 2019 vs. 23.1% in Q4 2018. GIL gross revenue was KD 282.7 million, a 3.7% decline (or 2.6% decline on a constant currency basis) from same period in 2018.

Q4 Air Freight volume decreased by 7% (in tonnage) as a result of falling trade volumes and lower demand from customers across industries and geographies. This decline in volume was partially offset by higher yields – expressed as net revenue/ton – which increased 1.1% from same quarter last year.

Ocean Freight TEUs grew 1.9%, but Q4 yields declined 2.2% vs. the same period in 2018. GIL Ocean Freight yields were strongest in the Americas and Europe.

Contract Logistics achieved healthy growth, mainly in the MEA Region (Kuwait, Saudi Arabia) but also in the US, Australasia and Singapore.  Project Logistics also showed solid growth in multiple countries.

To strengthen performance and its market differentiation, GIL is implementing its digital strategy. By accelerating its digital transformation, GIL intends to enhance customer and supplier connectivity, create innovative customer solutions, increase the efficiency of its business processes, and enable comprehensive business insight.

Agility’s Infrastructure Companies

(All numbers in this section are pre-IFRS 16)

For full year 2019, Infrastructure group’s EBITDA grew 7.7% and revenue increased 14% and for the last quarter of 2019, EBITDA grew 6.1% and revenue increased 12.8%.  Agility is investing in these companies to drive its future growth.

Agility Logistics Parks (ALP) reported 14.9% revenue growth for the year, despite challenging market conditions. In Kuwait, ALP’s focus is driving the efficiency and optimizing the use of existing assets. In Riyadh, Saudi Arabia, ALP completed another 120K sqm of warehousing space in 2019.  In Africa, developments in ALP Ghana Phase III and Phase I in both Mozambique and Ivory Coast are approaching completion.

Tristar, a fully integrated liquid logistics company, posted 10.9% revenue growth in 2019, mainly from Fuel and Maritime improvements. Fuel sales increased mainly in Africa and Yemen. Additionally, improvements were realized in the Road Transport and Warehousing (RTW) segment coming from new contracts. Tristar is focusing on a growth strategy across all business segments.  New vessels in the Maritime segment are expected in second half of 2020.  RTW will continue to ramp-up existing contracts with mining companies and oil majors.  In addition, Tristar is investing in new fuel farms in Africa.

National Aviation Services (NAS), the fastest growing aviation services provider in emerging markets, grew revenue by 7.8% in 2019. Favourable market conditions in some markets where NAS operates, coupled with successful turnaround efforts, contributed to this growth. As part of its strategy to expand within the African Continent, NAS is in the process of launching new operations in several new markets.

United Projects for Aviation Services Company (UPAC), a leading real estate and facilities management company operating in Kuwait, posted 2.2% revenue decline in 2019 compared with same period in 2018. UPAC operations are still being affected by the shift in passenger traffic to dedicated airline terminals at Kuwait International Airport.  UPAC has been able to partially offset the impact by generating new revenue from car park management operations in (T4) and through the strong performance of its real estate management operations in Kuwait.  In Abu Dhabi, construction continues to progress on Reem Mall, a $1.2 billion project.

GCS, Agility’s customs modernization company, posted 8.8% growth in revenue in 2019. This was driven by new brokerage business and other services to support its core business. GCS is implementing initiatives to drive efficiency and improve profitability.

Closing

Since 2011, Agility’s EBITDA reported a 14% compounded annual growth rate and generated a 25% IRR to its shareholders.

“We are proud that in addition to our financial performance, we are focused on driving innovation in our industry and enhancing our digital logistics offering. We also continue to make strides in our sustainability goals,” Sultan said.

“We will continue to invest in the business to drive efficiency and seed future growth, even as we confront concerns about downward pressure on global trade volumes, uncertain growth prospects, and ongoing trade frictions between large economies. As always, we thank our employees, our customers, our shareholders and our partners for their engagement and support.”

Financial Performance for the full year 2019

• Agility’s net profit stands at KD 86.8 million, a 7% increase from KD 81.1 million in 2018. EPS was 52.1 fils, compared with 48.7 fils a year earlier.
• EBITDA was KD 193.1 million, a 24.7% increase from 2018.
• Agility’s revenue for 2019 was KD 1,578.6 million, an increase of 1.8% from KD 1,550.2 million in 2018. Net revenue increased by 6.7%.
• GIL’s revenue was KD 1,124.6 million, a 2.5% decline from 2018. However on a constant currency basis it remained flat compared to last year.
• Infrastructure group revenue was KD 469.7 million, compared with KD 412 million in 2018, a 14% increase from last year.
• Agility enjoys a healthy balance sheet with KD 2,082.1 million in assets. Its net debt position was KD 308.2 million as of Dec. 31, 2019. Operating cash flow was KD 151.5 million for full year 2019.

Four-year award to collect, sell and dispose of UK military equipment

ALEXANDRIA, Virginia – February 19, 2020 – Agility Defense & Government Services (DGS) has been awarded a contract with a potential throughput of $17 million over four years to sell and dispose of UK armed forces aviation platforms, equipment and spares.

DGS was selected by the Defence Equipment Sales Authority (DESA), the UK Ministry of Defence (MOD) arm authorized to sell surplus military equipment and inventory.

Under terms of the contract, DGS will handle sale and disposal of aircraft, aircraft spares, training aids and ground support equipment, along with other military equipment and spares such as communications systems. DGS performed similar work for DESA for five years as a subcontractor before selection as prime contractor under the new award, which takes effect May 1.

Agility DGS will use a customized IT system to target buyers in aerospace businesses. It also has developed databases to sanitize, cross-reference, and manage the inventory. Collection, sales and reporting activity is managed with the same database, which has been tailored to the requirements of the contract.

“To receive this contract, we outlined the core processes we have developed and refined over five years of operation, including piece-part-level traceability for over 16 million parts,” said Gareth Webberley, Vice President of Agility DGS Europe. “We proposed innovative solutions around the top-level activity management for collection, storage, sales and reporting, coupled with use of the web to broaden our customer reach.”

Under terms of the contract, Agility DGS will collect equipment and spares from the MOD in the UK.  Sales will be made worldwide, subject to applicable export controls.

The rise of digital technology has spurred the growth of ever more complex business ecosystems. As companies partner with competitors and become “frenemies”, traditional boundaries are dissolving and co-opertition is now the new normal.

At an event hosted by Agility alongside the 2020 World Economic Forum Annual Meeting in Davos, Switzerland, global business leaders from diverse industries and roles discussed the ways they are using collaborative and interdependent ecosystems to drive growth at their companies.

Watch the video highlights to discover how Unilever has shifted its mindset from looking to drive savings from its suppliers, to a relationship where they partner for mutual growth. Toshiba’s Chief Digital Officer introduces “ifLink”, a new IoT platform and shares his 3 ‘A’s approach to building a successful platform: affordability, agility and availability. Siemens Nigeria CEO describes how she uses partnerships to expand to local markets and also to drive collective action towards solving issues such as cybercrime and corruption. And PayPal’s SVP core markets explains why whether you build, buy or partner, platform integration is key.