Aramex Annual
Integrated Report


Your Expectations, Our Inspiration

Turning to our industry, logistics and supply chainpresented unique and dynamic opportunities fordiversified growth-oriented players during 2023.

Dear valued stakeholders,
On behalf of the Board of Directors, it is an honour to present to you Aramex’s 2023 Annual Report. I am pleased to begin by expressing my gratitude to Aramex’s leadership and their respective teams for their exceptional dedication and the Company’s performance throughout the year. The Board of Directors takes great pride in Aramex’s collective efforts and great service standards, which have been instrumental in propelling regional economies forward. The past year witnessed a global economic landscape riddled with uncertainties, hindering economic activity across borders, and proving a challenging operating environment for growing sectors including logistics. Aramex’s global operations were impacted by macroeconomic headwinds including inflationary pressures, rising interest rates, and continued global supply chain disruptions. However, our home markets across the Gulf Cooperation Council (GCC) have exhibited great resilience in navigating this challenging economic landscape. Bolstered by key economic visions, resulting in increased government spending and economic diversification initiatives, GCC economies noted remarkable resilience in economic activity. These strategic initiatives have significantly fortified the region’s growing significance in the global economy, particularly as a burgeoning trade hub as the region ramps up non- oil exports.

This is evident in the estimated GDP growth of 3.8% in the non-oil sector of the GCC in 2023, while overall GDP growth in the region was modest at 0.5% for 2023 and is expected to pick up to 2.7%. For our key markets in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA), non-oil GDP growth in 2023 is estimated at 5% and 4%, respectively, as per the latest data released by the International Monetary Fund (IMF) and Emirates NBD Outlook in January 2024. Elsewhere across the world, the US GDP growth was 2.5% and the Euro zone was stable with an estimated 0.5% growth in GDP. Emerging Markets and developing Asia recorded the highest estimated GDP growth of 5.4%, while GDP in Sub Saharan Africa is estimated to have grown 3.3%.

Turning to our industry, logistics and supply chain presented unique and dynamic opportunities for diversified growth-oriented players during 2023. Despite geopolitical risks and subdued economic performance across key markets including Europe, UK, and China, the ongoing expansion of ecommerce, logistics and warehousing have and will continue to offer clear growth opportunities. For instance, the global ecommerce fulfilment market is estimated to grow at a compounded annual growth rate (CAGR) of 10% between 2022 and 2030. In certain markets including the GCC, economic ambitions have driven further sectoral expansion with the addition of new and specialized product lines further supported by online user growth, growing infrastructure and transport networks.

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We prioritized quality revenue growth, operational efficiencyand cost optimization through the economic cycle deliveringa healthy and stable Gross Profit of AED 1.43 billion for the fullyear 2023 and a strong gross profit margin of 25%.

Dear valued stakeholders,
The world is in flux and our industry has felt the effects caused by uncertainty. Uncertainty in economic drivers and predictions, uncertainty in transport routes and access, and uncertainty in life as we know it.
As a young boy, I grew up in an area affected by geopolitical conflict and I have seen the enduring impact it leaves on people, livelihoods, and business. Founded more than 40 years ago in the Middle East, Aramex had and has many employees who have lived through uncertainty. What defines and unites us all is our resilience and passion for a shared vision of the future, for abetter tomorrow. So, I would like to start this letter by thanking our 16,000+ strong employee base, by thanking each and every Aramexian for their dedication during another challenging year.Driven by hard work and an entrepreneurial spirit, Aramex has been a reliable partner to consumers and businesses around the world.I am proud to say that we enabled companies across industries to widen their reach and maintain the trust of their customers despite supply chain disruptions. For our B2C customer base we provided faster and reliable solutions, access to new markets, and more visibility across a shipment’s journey thanks to our improved technology, customer experience and customer service.

At the time of writing this letter, I see an acceleration in the global supply chain diversification trend, and persistent uncertainties that are redefining the way goods are being moved, stored, and fulfilled. The current situation at the Red Sea has caused a new disruption in the global shipping industry, and I am proud that Aramex is able to support customers with alternative solutions.Thanks to our large trucking fleet in the region, we have been able to deploy our own-operated trucks via Dubai, United ArabEmirates (UAE) and via Dammam, Kingdom of Saudi Arabia(KSA) for shipments arriving from Asia and via Port Said, Egypt for shipments arriving from Europe. This provides a solution to the Red Sea route or the alternative route via Cape of GoodHope which takes approximately 7 to 14 days longer on average, depending on specific locations in Asia and Europe.

Over the past few years, ongoing supply chain disruptions have led to changes such as near shoring. Businesses require more local solutions, to ship and fulfill regionally to be able to service their customers without interruption. In response, we have repositioned our business with four well defined products and specialism: domestic express, international express, warehousing and supply chain, and freight forwarding (across sea, air and land).We invested in technology and automation, and built capabilities in specialized sectors such as e-commerce, energy and pharma. We can offer our customers an end-to-end solution, or a customized solution across the first mile (freight forwarding), mid-mile (warehousing, storage and fulfillment) and last-mile (courier express services). More information on our redefined business model is provided in this annual report, in the “Strategic context and market environment” section..

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600+ cities across 70+ countries, Aramex employs over 16,000 professionals.

Founded in 1982, Aramex has emerged as a global leader inlogistics and transportation, renowned for its innovative servicestailored to businesses and consumers. As a listed company on theDubai Financial Market (since 2005) and headquartered in theUAE, our strategic location facilitates extensive customer reachworldwide, bridging the gap between East and West.
With operations in 600+ cities across 70+ countries, Aramexemploys over 16,000 professionals. Our success is attributed tofour distinct business products that provide scalable, diversified,and end-to-end services for customers. These products are:
• International Express, encompassing Aramex’s ParcelForwarding Business (Shop & Ship and MyUS).

With operations in 600+ cities across 70+ countries, Aramex employs over 16,000 professionals. Our success is attributed to four distinct business products that provide scalable, diversified, and end-to-end services for customers. These products are:

• Domestic Express
• Freight Forwarding
• Logistics & Supply Chain Solutions

Sustainability is at the core of our vision and mission. To build a trulysustainable business, we leverage our core competencies to makea positive impact as responsible members of the communitieswe serve. Through partnerships with local and internationalorganizations, we strive to expand our reach and benefit moreindividuals through targeted programs and initiatives. To addressenvironmental concerns and combat climate change, we havecommitted to the Science Based Targets initiative (SBTi),renowned globally. This commitment propels us to accelerate ourclimate action goals, aiming for Carbon-Neutrality by 2030 andNet-Zero emissions by 2050.

International Express

The International Express product, which also includes Aramex’sParcel Forwarding Business (Shop & Ship and the MyUS businessthat was acquired in 2022), delivers efficient cross-borderdoor-to-door shipping services and timely delivery solutionsacross diverse business sectors. Our comprehensive suite ofinternational express solutions caters to customer preferences interms of cost, speed, automatic delivery notifications, and real-time online tracking updates.

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Domestic Express

Domestic Express ensures seamless door-to-door parcel and package deliveries nationwide, offering choices between same-day or next-business-day services.Additional options include cash-on-delivery, along with convenient package collection and returns services.

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Freight Forwarding

With more than 500 trucks, Aramex operates one of thelargest and most advanced land freight networks in the GCCregion and between UK and Ireland.

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Aramex delivers customized logistics solutions to its clients byseamlessly integrating a global network of warehouses, distributionfleets, and value-added services. Underpinning our approach isa comprehensive, end-to-end logistics infrastructure that makesit possible for us to provide our customers with a technologicallyadvanced, highly efficient and transparent transfer of goods acrossthe supply chain. Supporting this is a strategically located networkof logistics centers that span the GCC, Levant, Africa, Europe, theUS, and Asia. This international reach, married with local touchpoints,makes it possible for us to guarantee a safe, timely and highly visibleend-to-end logistics experience across the supply chain fromfactories till the end user.

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Strategic Highlights & Business Model

Strategic context and market environment
During the year 2023 we continued implementing our strategy to rebalance the business from a B2C express parcel driven organization to amore diversified operating model: we aim to provide an end-to-end service offering to our customers through four well-defined products, namely our international express and domestic express products, as well as our freight forwarding and logistics & supply chain products, which continue to be underpinned by an asset light operating model. This means that we remain flexible and agile in responding to our customer’s requirements for transportation and logistics. In the entire history of our company, this has never been more relevant than today.
The year 2023 saw an acceleration in market shifts and new industry trends, resulting in a dynamic operating environment for our company and our customers. Global supply chain diversification and rising economic uncertainties are redefining the way goods are being moved, stored, and fulfilled. Raising inflation and interest rates, as well as currency devaluation in certain markets are impacting our customer’s spending power and priorities. We continue to be partially insulated from some of the challenging global market forces due to the favorable GDP
developments in our home markets in the GCC, especially the United Arab Emirates and Saudi Arabia. The resilience of economic activity in these home markets (our inbound markets) also contributed to solid demand from our main outbound markets in the US and UK, as well as new origins in emerging markets. But Aramex is of course still subject to changes in its industry environment. Global rates in shipping and freight forwarding have drastically reduced compared to the pandemic years. In domestic express we see increased competition, leading to an increasingly commoditized last mile industry where service differentiation and developing premium offerings are key to maintaining attractive margins. Supply chain disruptions are leading to changes such as nearshoring, whereby we are seeing certain customers requiring more local solutions, to ship and fulfill regionally. This impacts all our products, in various ways and we believe that Aramex is uniquely positioned to benefit from some of these market changes. Our integrated offering across the four products is a distinct competitive advantage and a unique end-to-end service capability in many of our key markets. This model provides cross selling opportunities for Aramex, with many customers looking for a partner with both express and logistics capabilities as well as freight forwarding and warehousing capabilities, while others prefer to break down the supply chain and require bespoke and tailored solutions.

Shipment lifecycle

We believe that Aramex’s unique ability to provide a full spectrum of services to its customers across the logistics value chain will increasingly become an advantage vis-à-vis our competitors that are only able to provide more fragmented services.
We are leveraging our strengths and 40-year-history in the domestic and international express business, while further growing our freight and logistics operations across our network.Additionally, our value proposition to customers is also focused on tapping into niche market segments that are attractive to the industry, such as healthcare and energy.
In the next few years, through a combination of organic and inorganic steps, we expect to move towards fairly balanced group revenues between our domestic and express products, and our logistics and freight forwarding products.

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About Our
Integrated Report

We are proud to share our 14th integrated report with our stakeholders. This report also marks the 18th year in which we report on our sustainability and Corporate activities, and it includes the culmination of rigorous monitoring and evaluation of our activities across the entirety of our operations, business units, and sustainability efforts. Additionally, this report covers our financials, operational, and ESG (Environmental, Social, and Governance) activities and progress, along with our Green House Gas (GHG) emissions footprint for 2023 from January 1st to December 31st, and it follows our 2022 report .

Sustainability and ESG at Aramex

Since our inception, sustainability has been a part of our Aramex DNA, integrated at every level and within every function. This remains the case 40+ years on.
Sustainability the Aramex way involves a proactive, integrated, and stakeholder-centric approach to ESG and value creation across our six Capitals, keeping in mind our global and local footprints and impact on our communities. We strive to nurture our Human, Social, andRelationship Capitals, develop our Intellectual Capitals, and leverage our Manufactured andFinancial Capitals while striving to safeguard our Natural Capitals.
In line with this, we center integrated thinking across our operations and business activities, ensuring that we consistently and deliberately make coordinated efforts to connect our strategy, governance, performance, and opportunities. By embedding integrated thinking, we proactively consider the different relationships and dynamics between our operations, functional units, and across our value chain, ensuring that we are sustainably, strategically, and holistically creating value in the financial, environmental, social, and governance realms over the short-, medium-, and long-term. Our strategy development and implementation are done collaboratively as we work towards common goals in connection with our shareholders, business clients, and critical stakeholders. This approach enhances decision-making, accountability, and communication.

Diverse Industry-Centric Services: Tailored Solutions, and Vertical-Driven Growth

The role of the sustainability function is to engage and integrate efforts based on vision, research, and development to facilitate projects that are integrated into operational and sustainability goals.

We center sustainability and forward-thinking across Aramex, building strategic partnerships and collaborations, proactively managing risks, and capitalizing on opportunities to enhance our innovation and competitiveness, improve our resiliency, and respond to long-term, industry material environmental, social, and governance (ESG) needs, requirements, and risks.

Precautionary Approach
Utilizing a precautionary approach is important for Aramex to maintain its position asa responsible and sustainable business and proactively mitigate any negative impactsthat may result from our operations, business, and value chain activities. This is relevantfor the mitigation of climate risks and impacts and for safeguarding our Natural capital.As such, we make sure to conduct climate risk assessments and engage with oursupply chain to find ways to tackle our environmental and carbon footprints, which isa challenge, given our asset-light model since a significant proportion of our impactoccurs outside our control. Our application precautionary approach also involves theproactive management of health and safety matters, preservation of human rights, andupholding labor rights, anti-bribery and anti-corruption, and compliance with relevantregulations and laws and our code of conduct. Throughout this report, we refer to thedifferent policies, controls, and procedures that allow us to apply the precautionaryprinciple holistically. Additionally, we outline our environmental strategy, approach, andactivities, as well as the results of our climate risk assessment in pages xx, as per therequirements of the Task Force on Climate- Related Financial Disclosures (TCFD).

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  • Value Creation Model View
  • ESG KPIs View
  • Stakeholder Mapping View
  • Discussion and Analysis of Financial Results View
  • Appendices and Annexes View

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