Value creation story

Business overview by segment

Value creation

Management resources

Value provision

Growth strategy

Sustainability

Business overview
by segment

Data section

EXPOLANKA - THE JOURNEY OF A GLOBAL SRI LANKAN

Proactive ESG Strategy

The journey to create asustainable long-term value
Executive Director and Group CEO

MR. HANIF YUSOOF

The company has placed great emphasis on ESG as a
critical component of the business operations of thecompany, with a focus on building a sustainable andwell governed framework which encompasses ourpromise to all our stakeholders.
“Global Goodness” our hallmark brand representing
our sustainability initiatives provides a framework
which enables the company to undertake initiatives
which guides our business operations in a moreenvironmentally friendly, socially conscious manner.

A successful business strategy has to be ably supported
by a strong governance framework which allows thebusiness to deliver earnings quality and integrity. The
organization has built in several processes, policies
and structures which encapsulate the governanceframework of the company. An example of the qualityof our governance framework is reflected in thesuccessful implementation of J-Sox audits with 100%
compliance, consistently over a 3 year period.

Resilience in Motion
A glimpse into the past
The roots of our entrepreneurial journey dates back to1978 with the liberalization of the domestic economy
in Sri Lanka. At the onset Expolanka was synonymous
as being a Diversified organization. The company wasinvolved in several unrelated businesses a result of ourdiversification strategy. The Jewel amongst all thesebusinesses remained the Logistics business, EFL
Global, as it is now known.
Our international expansion commenced in 1992,
where we ventured into Bangladesh through astrategic partnership. We now have a global presencein 34 International markets, where over 95% of ourrevenue is derived from operations outside of SriLanka.

Just prior to and immediately preceding the IPO, theorganization undertook a portfolio restructure exercise
aimed at primarily reallocating our resources to theLogistics business, this resulted in the group divesting
several businesses. It was this important step that laid
the platform and framework for Expolanka to growinto being the Global Logistics leader it is today.
SG Holdings acquired 51% of Expolanka in 2014, which
has since increased to 75.6%. The support andunderstanding of Sagawa was one key ingredient
which gave us the much-needed confidence to pursue
and expedite our growth journey, enabling us toembark on our single most important expansion
initiative into our largest market USA, in 2017.

Adopting a consistent, continuous multi-pronged strategy
Focused on the Logistics Sector
The USA expansion was the pivotal moment, which
expedited the transformation of Expolanka into theglobal leader it is today. The Strategy has been multipronged, simple and agile, epitomizing the DNA of thecompany.
The key component of our strategy has always
remained customer centricity enabling the company
to develop a large base of strategic customers ensuinga growth in both Air Freight & Ocean Freight Volumes.
This strategy was supported by our overreachingdesire to operate as an efficient organization. The

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company implemented a proactive procurement plan
enabling the business to develop relationships andbuild capacities in trying market conditions.
Furthermore, the company continued to develop
network infrastructure and capabilities which was akey nexus enabling the rapid growth of theorganization. Investments into technology too played
key role in building resilience in the organization as itenabled the company to leverage its capabilities in anefficient manner.

The advent of the Pandemic saw businesses globallyadopting to the new normal conditions. Expolanka
was not only able to successfully navigate thesechallenges, the company was able to deliver
extraordinary financial results stemming from theInvestments it has made and the infrastructure it hasbuilt to support its strategic initiatives. The efforts inbuilding our commercial team, customer relationships,technology platforms and building the strength ofenabled us to propel our performance particularly
over the last two years. The company delivered aGroup Revenue of Rs. 694Bn (YoY +217%) with anoperating profit of Rs. 79.9Bn (YoY +385%) and a PAT ofRs. 72Bn (YoY +389%). Operationally the company
delivered significant growth in both its Air Freight
Volumes (YoY+51%) and Ocean Freight Volumes (YoY+49%). The efficiency of our operations and the qualityof earnings is further demonstrated in the returns wehave generated with an ROE of 96% and an ROCE of56%.
These exceptional results were not achieved
opportunistically, but an outcome of the company
adopting a varied multi-pronged strategy consistently
and continuously, implemented with precision.

The Journey Continues
The focus for the future will be to sustain thisperformance. Market conditions remain dynamic withseveral factors at play. The company has remained
agile and nimble adopting to these conditions. The
aim of the business will be to consolidate its current
position by growing volumes whilst managing
margins. Increasing customer wallet share whilst
strategically growing customer base will at the centerof the growth strategy adopted by the company.
Service expansion is another key initiative adopted by
the company to grow the domestic logistics businessparticularly in the US Market. The company will look to
expand its market position in the mid to long term
focusing on other key markets such as Europe whilst
growing the Intra Asia business operations.
At the same time, we will also work to strengthen andexpand trade lanes to and from Japan while closely
coordinating with domestic and overseas offices ofSG Holdings boasting a robust customer base inJapan. In this way, we believe we can become a Global
Logistics Player in future aiming for a geographicbalance and a customer balance that is not excessively
oriented toward the United States. In addition,
digitization is at the forefront of the strategy and is
aimed at enabling and augmenting the business
operations of Expolanka.
This will continue to be supported by our ESG Strategy
which will position Expolanka as a truly sustainableorganization. As a company we believe in creating
sustainable long term value and we will continue topursue our strategic initiatives into the future to enable
Expolanka to deliver true value to all its stakeholders.

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