Freightways Group Limited · NZX:FRW
Freightways — H1 FY2021 Earnings Presentation
28 slides from Freightways's earnings presentation, December 2020
Slide 1: Freightways Half Year Results Presentation
FREIGHTWAYS HALF YEAR RESULTS PRESENTATION for the six months ended 31 December 2020
Slide 2: Highlights
Highlights The financial results in this presentation should be read in conjunction with the abridged financial statements for the six months ended 31 December 2020 which can be found in the NZX preliminary results announcement. – Growth in courier revenue of x% – Storage revenue has increased by 4%
Slide 3: Highlights
Highlights – Growth in courier revenue of 12% – Storage revenue has increased over – Secure Destruction has rebounded in through a combination of organic & the pcp with utilisation now at 83% in NZ and is improving slowly in AU market share gains (including new NZ and 70% in AU – Medical Waste has g
Slide 4: Financial Summary for the six months ended 31 December 2020
Financial Summary for the six months ended 31 December 2020 HY21 HY20 Change $M $M % Revenue 410.3 318.9 28.7 EBITA, before change in fair value of contingent i. 71.0 50.1 41.7 consideration – Big Chill Distribution Limited (BCD) Change in fair value of contingent consideration – BCD (19.2) 0.0 EBIT
Slide 5: Change in fair value of contingent consideration (Non-recurring Item)
Change in fair value of contingent consideration (Non-recurring Item) 2021 Non-recurring expense of $19.2 million (no tax applicable) in respect of a change in fair value of contingent consideration (increasing accrual for estimated future Big Chill (BCD) final settlement payment). Stronger than exp
Slide 6: Revenue Segmentation
Revenue Segmentation for the six months ended 31 December 2020 HY21 HY20 Change $M $M % Express package & refrigerated transport 296.0 209.4 41.3 Postal 24.8 27.2 (8.7) Storage & handling 30.0 31.2 (3.8) Destruction activities 35.5 31.9 11.5 Other 23.9 19.2 24.8 Total revenue 410.3 318.9 28.7 NOTES
Slide 7: Express Package & Business Mail / Information Management
Express Package & Business Mail for the six months ended 31 December 2020 HY21 HY20 Change $M $M % Operating Revenue 327.7 237.6 37.9 EBITDA 74.4 49.8 49.5 EBITA 57.4 39.9 44.1 EBITA Margin 17.5% 16.8% Information Management for the six months ended 31 December 2020 HY21 HY20 Change $M $M % Operatin
Slide 8: Express Package
Express Package B2C Proportion B2C Item Growth vs 2019 25% 60% 22% 52% 21% 50% 19% 20% 19% 19% 50% 46% % OF NETWORK ITEMS 20% ITEMS 39% 40% 37% 15% 34% 30% 10% 20% 5% 10% 0% 0% Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jul Aug Sep Oct Nov Dec Note: Excludes point to point and dedicated B2C items Fre
Slide 9: Express Package: Pricing For Effort Trend
Express Package Pricing For Effort Trend $1.20 $1.01 $1.00 $0.94 $0.96 $0.96 $0.92 $0.80 $0.71 PFE PER ITEM $0.60 $0.40 $0.20 $- Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Freightways Limited and its subsidiaries. Half Year Report ended 31 December 2020.
Slide 10: Express Package
Express Package Growth in Network Courier Items v 2019 Net Promoter Score - Network Couriers 16% 35 32.7 14% 14% 30 27.1 % GROWTH IN ITEMS 12% 25 10% 10% 22.7 10% 9% 9% 20.3 9% 20 8% NPS 15 13.3 6% 10 4% 2% 5 0% 0 Jul Aug Sep Oct Nov Dec Volume Trend EP Note: Excludes point to point and dedicated B2
Slide 11: Information Management and Secure Destruction Metrics
Information Management and Secure Destruction Metrics Australian Secure Destruction and Med-X Revenue Growth v 2019 Medical Waste Bin Swaps v 2019 250 0.0 Jul Aug Sep Oct Nov Dec 200 -2.0 -4.0 % Change 150 -6.0 % Change -8.0 100 -10.0 -12.0 50 -14.0 -16.0 0 Months Jul Aug Sep Oct Nov Dec Freightways
Slide 12: Balance Sheet
Balance Sheet KEY POINTS • Total assets increased from FY20 by $9m, including $11m increase in cash & cash equivalents and higher trade & other receivables from increased activity and timing of receipts ($7m), partially offset by decrease in property, plant & equipment ($3m) and right-of-use assets
Slide 13: Cashflow
Cashflow KEY POINTS • Cash generated from operations of $104m was $42m above the PCP due to strong results compared to PCP and the inclusion of Big Chill (acquired on 1 April 2020) • Net cash inflows from operating activities (i.e. after deducting interest and tax payments) were $39m above the PCP •
Slide 14: Capital Expenditure
Capital Expenditure for the six months ended 31 December 2020 2020 2021 Full Year Actual Full Year Forecast $M $M Capital Expenditure 23 20 - 22 Depreciation and software amortisation 47 59* (including impact of NZ IFRS 16) Depreciation and software amortisation 18 22* (excluding impact of NZ IFRS 1
Slide 15: Dividend
• INTERIM DIVIDEND: 15.5 cps • IMPUTATION CREDITS: 6.0278 cps (fully imputed at 28% tax rate) Dividend • • SUPPLEMENTARY DIVIDEND: RECORD DATE: 2.7353 cps 12 March 2021 • PAYMENT DATE: 1 April 2021 • THE DRP WILL NOT BE OFFERED FOR THIS DIVIDEND Freightways Limited and its subsidiaries Half Year Rep
Slide 16: Strategy
STRATEGY Freightways Limited and its subsidiaries Half Year Report for the six months ended 31 December 2020
Slide 17: Express Package
Express Package STRATEGY • Pricing For Effort will be used to target those areas of our business where the price does not yet fully reflect the true cost of performing the service: Stage II of PFE was launched effective August at an additional 50c per residential delivery. In Stage III, a final addi
Slide 18: Business Mail
Business Mail STRATEGY Express Package • Continue to expand our network to meet customer demand and achieve greater efficiencies in the last mile • Provide customers with a multi-channel offer (digital and physical mail) • Provide high levels of service at premium prices Freightways Limited and its
Slide 19: Information Management
Information Management STRATEGY Express Package • Target high-security 3PL customers to fill excess capacity at sites where site utilisation is low • Further streamline AU cost base to improve margins • Continue to provide high service levels to the AU digitalisation project which has commenced. Tim
Slide 20: Secure Destruction
Secure Destruction STRATEGY Express Package • Grow the Med-X brand through AU • Continue to target market share gains and find innovative ways of targeting customers who have relocated from CBD zones • Invest in high value waste streams and recycling opportunities to divert waste from landfill and i
Slide 21: Product Development
Product Development STRATEGY Express Package • The Startery – dedicated resource to design and test new products and services in conjunction with our businesses • Specialised skills and processes to develop ideas that leverage design thinking, lean start-up and business model canvas methodologies •
Slide 22: Outlook
• Whilst the economic environment remains uncertain, we are encouraged by the strong trading results achieved in the first half of FY21 • We would expect that – In Express Package, volume will be influenced by macro-economic activity, new consumption trends and supplemented by new business wins; – I
Slide 23: Conclusion
Conclusion While FY21 has started strongly for Freightways, we are aware that we must not be complacent - that factors beyond our immediate control will require us to act as swiftly as we have demonstrated we can in the past. We are proud of our achievements to date in growing contractor incomes, de
Slide 24: Appendix: Reconciliation of GAAP
Appendix: Reconciliation of GAAP for the six months ended 31 December 2020 Freightways Group HY21 HY20 Change $M $M % Operating Revenue 410.3 318.9 28.7 EBITDA (GAAP) 80.6 71.3 13.1 Add back: Change in fair value of contingent consideration – BCD 19.2 - Less: NZ IFRS16 adjustment (21.6) (15.1) 42.3
Slide 25: Appendix: Reconciliation of GAAP to pre-NZ IFRS16 – Express Package & Business Mail
Appendix: Reconciliation of GAAP to pre-NZ IFRS16 for the six months ended 31 December 2020 Express Package & Business Mail HY21 HY20 Change $M $M % Operating Revenue 327.7 237.6 37.9 EBITDA (GAAP) 74.4 49.8 49.5 Less: NZ IFRS16 adjustment (12.7) (6.4) 99.0 EBITDA (before NZ IFRS16) 61.7 43.4 42.2 E
Slide 26: Appendix: Reconciliation of GAAP to pre-NZ IFRS16 – Information Management
Appendix: Reconciliation of GAAP to pre-NZ IFRS16 for the six months ended 31 December 2020 Information Management HY21 HY20 Change $M $M % Operating Revenue 84.9 82.3 3.2 EBITDA (GAAP) 26.5 23.0 15.2 Less: NZ IFRS16 adjustment (8.7) (8.6) 1.7 EBITDA (before NZ IFRS16) 17.8 14.4 23.3 EBITA (GAAP) 15
Slide 27: Freightways Limited and its subsidiaries Half Year Report for the six months ended 31
Freightways Limited and its subsidiaries Half Year Report for the six months ended 31 December 2020
Slide 28: Disclaimer
Highlights Disclaimer. This presentation has been prepared by Freightways Limited ("Freightways") for information purposes only. This presentation is not a product disclosure statement, prospectus or investment statement. Nothing in this presentation constitutes an invitation to subscribe for shares