WisTech Global Looks To Capitalise On Global Supply Chain Congestion...

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WiseTech Global Looks To Capitalise On Global Supply Chain Congestion


Sea port access and air freight restrictions have created global supply chain congestion and disruption, resulting in higher freight rates, caused by COVID.

  • International logistics service providers are fast tracking replacement of in-house legacy systems and transitioning to CargoWise for productivity gains, driving WiseTech revenue growth
  • Continued investment in R & D, $167 million in FY21, equating to 33 percent of Total Revenue.
  • FY22 revenue of $600 to $635 million and EBITDA of $260 million to $285 million reaffirmed, representing increases of 18 to 25 percent and 26 to 38 percent, respectively
  • Favourable long-term industry dynamics and the market power of CargoWise, ensures consistent long-term earnings growth for the Group.

WiseTech Global (‘WiseTech’ or the ‘Group’) is the owner of ‘CargoWise‘, an integrated, global software platform for international logistics service providers. Customers include over 18,000 logistics companies from 165 countries. The Group’s software services 40 of the top 50 global third-party logistics providers and 24 of the 25 largest global freight forwarders worldwide.

AGM Commentary

The chairman provided market context in relation to WiseTech’s FY21 performance and the Group’s response to COVID-related factors that are shaping its strategic direction.

Strong consumer demand for goods, buoyed by government fiscal stimulus around the world, continues to support global trade. However, diminished shipping container availability and port access issues have limited sea freight capacity. Reduced air freight belly-hold capacity resulting from passenger travel restrictions, has created supply chain congestion and disruption, resulting in higher freight rates.

These market conditions have accelerated the move by international logistics service providers to fast track the replacement of their in-house legacy systems with advanced, integrated software platforms, such as CargoWise. WiseTech are a major beneficiary of this trend. The superior functionality of their integrated global software platform delivers efficiencies, productivity enhancement, transparency, risk mitigation and facilities planning to logistics providers.

Increased consolidation of logistics providers within the sector is also driving WiseTech’s revenue growth. Consolidation is being driven by larger global logistics providers. WiseTech benefits from this consolidation because existing customers are the acquirer, or WiseTech’s platform is already in place in the acquired business, and adopted by the acquirer. These structural trends are translating into immediate revenue growth for WiseTech.

Market penetration of WiseTech’s fully digital logistics solutions is still in the early stages and so the ongoing revenue growth opportunities are vast. The Group secured six new global rollouts in FY21 and signed global leader, FEDEX, post 30 June 2021. These rollouts are in addition to the 30 existing rollouts that WiseTech currently has in place.

The chairman explained that the Group has intentionally slowed its near-term acquisition activity in order to focus on expanding the CargoWise ecosystem and to extract synergies from past acquisitions, to maximise operating leverage and drive scalability. The Group will also continue to innovate and enhance is Intellectual Property by undertaking extensive R & D. In FY21, WiseTech invested $167 million in R & D, equating to 33 percent of Total Revenue.

Ninety-seven percent of the CargoWise $331 million revenue base is recurrent and delivers an extraordinary high gross profit margin of 85 percent of sales revenue. The notion of ‘make it once and sell it many times’ continues to be an appealing aspect of the WiseTech business model.

The attractiveness of the WiseTech business model is also reflected in its strong financial position at 30 June 2021 of $315 million in cash and no outstanding debt. The Group’s operating cash flow increased by 57 percent on FY20, highlighting the strength of WiseTech’s underlying operating model. This strong balance sheet is strengthened by the flexibility of a new, unsecured $225 million facility, provided by a syndicate of 6 banks.


The favourable long-term industry dynamics and the market power of the integrated, global software platform, CargoWise, ensures consistent long-term earnings growth for the Group.

This was reiterated by the Founder and Chief Executive Officer, Richard White, in his shareholder address, when he stated that there has never been a greater need for globally integrated logistics technology, in the sector that WiseTech operates.

The CEO reaffirmed FY22 revenue estimates of $600 to $635 million, an increase of 18 to 25 percent, compared to the previous year. This equates to EBITDA growth of 26 to 38 percent, representing $260 million to $285 million, for the FY22 financial year.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

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