Mainfreight Limited · NZX:MFT
Mainfreight — FY2012 Earnings Presentation
31 slides from Mainfreight's earnings presentation, May 2012
Slide 1: Full Year Result to March 2012
FULL YEAR RESULT TO MARCH 2012
Slide 2: Revenue up 35% to $1.81 billion; EBITDA up 50%
Revenue up 35% to $1.81 billion An increase of $472 million Excluding Wim Bosman Group, $1.40 billion, up 4% EBITDA $138.19 million, up 50% Excludingg Wim Bosman Group, p, $110.06 $ million,, up p 20% Net surplus before abnormals $65.75 million, up 39% Abnormals add $14.70 $14 70 milli
Slide 3: Best ever result at revenue, EBITDA and net surplus levels
Best ever result at Revenue, EBITDA and Net Surplus levels One year of Wim Bosman Group ownership Earn Earn‐out out threshold not met Write‐back of €10 million to Profit & Loss account (IFRS rule) New Zealand and Australian profit performance Increased capital investment in land and term
Slide 4: Revenue NZ$1.814 billion by region
This Year Last Year NZ$1.814 billion NZ$1.342 billion Europe New Asia New $417,609 Zealand $36,174 Zealand 23% $449,041 3% $412,566 25% 31% USA Asia $420,468 $35,782 31% 2% USA Australia Australia $411,872 $472,292 $499,264 23% 35% 27% % NZ$000 NZ$000
Slide 5: EBITDA NZ$138.19 million by region
This Year Last Year NZ$138.19 million NZ$91.58 million New Asia Europe Zealand $3,470 New $28,133 $54,597 4% USA Zealand 20% 40% $14,626 $ $47,863 $47 863 16% 52% Asia $2,651 2% USA $18,987 Australia 14% Australia $25,625 $33 822 $33,822 28% 24% NZ$000 NZ$000
Slide 6: Net debt and drivers of increased debt
NZ$ million This Year Last Year Term borrowings 278.8 97.1 Finance lease 68 6.8 05 0.5 Overdrafts 9.2 – D Deposits it (46 1) (46.1) (50 0) (50.0) Total Net Debt 248.7 47.6 Increased debt as a result of: Acquisition A i iti off Wi Wim B Bosman G Group €110 million illi Capital expenditure $85 m
Slide 7: Working capital and operating cash flow
NZ$ million This Year Last Year Operating cash flow 77.1 71.8 Workingg capital p movements negative g $ $12.2 million in 2012 yyear,, largely g y due to bonus and acquisition costs Working capital movements positive $13.6 million in 2011 year Capex expectations for F13: Property $56 million
Slide 8: Capital expenditure breakdown
NZ$000 New Zealand Property - Palmerston North terminal 8,500 - Invercargill terminal 6,900 - Christchurch terminal commencement 10,000 - Sundry other 5,200 - Properties for sale (8,400) 22,200 Australia Property - Brisbane terminal commencement 12,700 - Adelaide p purchase 5,500 - Melbourne land 15
Slide 9: Final dividend 14 cents per share
14 cents per share for final dividend Takes total dividend for year to 26.0 cents per share; a 30% increase on last year’s total of 20.0 cents per share Books closing 13 July 2012 Payment y 20 Julyy 2012
Slide 10: Revenue by division
$000 This Year Last Year Variance NZ Domestic: NZ$ 76,975 71,294 8.0% NZ International: NZ$ 32,626 30,599 6 6% 6.6% AU Domestic: AU$ 52,877 42,034 25.8% AU International: AU$ 44,284 45,636 ( ) (3.0)% USA*: US$ 82,520 78,784 4.7% Asia: US$ 6,908 5,208 32.6% Europe: EU€ 63,013 – Total Group: NZ$ 444,8
Slide 11: EBITDA by division
$000 This Year Last Year Variance NZ Domestic: NZ$ 12,710 11,532 10.2% NZ International: NZ$ 2,479 1,687 47 0% 47.0% AU Domestic: AU$ 4,512 2,784 62.1% AU International: AU$ 2,847 2,136 33.3% USA*: US$ 4,804 3,055 57.3% Asia: US$ 423 613 (30.9)% Europe: EU€ 3,840 – Total Group: NZ$ 37,166 24,625 50.
Slide 12: New Zealand Domestic
NZ$ million This Year Last Year Sales revenue 449.0 412.6 EBITA 44 8 44.8 10 0% 10.0% 38 9 38.9 9 4% 9.4% EBITDA 54.6 12.2% 47.9 11.6% Expectations for growth and profitability in New Zealand market remain Network intensityy Online / home‐delivery strategies Sector specialisation p
Slide 13: Australia Domestic transport
NZ$ million This Year Last Year Sales revenue 316.1 290.8 EBITA 38 1 38.1 12 1% 12.1% 33 5 33.5 11 5% 11.5% EBITDA 47.8 15.1% 42.3 14.5% Continuing to gain market share, particularly Food / food‐related / beverage g DIY sectors Rail usage g increased;; spend p is now $ $35 million p per annu
Slide 14: Warehousing
Warehousing h utilization l improvedd Food grade warehouse commissioned in Auckland Upgrade U d off Ch Christchurch i h h ffacilities ili i to add dd more capacity i Palmerston North and Invercargill construction to be completed late 2012 Land L d negotiations ti ti for f rail‐served il d
Slide 15: New Zealand International
NZ$ million This Year Last Year Sales revenue 132.9 121.8 EBITA 66 6.6 5 0% 5.0% 54 5.4 4 4% 4.4% EBITDA 6.8 5.1% 5.6 4.6% Revenue growth across all trades Significantly up in Sea Imports Air Export growthh – long l haul h l Perishable volume declined 4.9% on exchange rate issues for exporte
Slide 16: Australia Domestic
AU$ million This Year Last Year Sales revenue 385.4 367.0 EBITA 23 7 23.7 6 2% 6.2% 17 5 17.5 4 8% 4.8% EBITDA 26.1 6.8% 19.9 5.4% Market share gains continue to assist growth domestically Food / beverage / DIY sectors prominent; less exposure to garments / whiteware, etc Improved performance
Slide 17: Australia Mainfreight
AU$ million This Year Last Year Sales revenue 203.2 175.1 EBITA 17 0 17.0 8 4% 8.4% 11 5 11.5 6 6% 6.6% EBITDA 18.8 9.2% 13.1 7.5% Quality of service improving – more to do to reach our expectations Network expansion with new branches opened on Sunshine Coast and Albury, lb and d Chemcouriers h
Slide 18: Australia International
AU$ million This Year Last Year Sales revenue 182.2 191.9 EBITA 67 6.7 3 6% 3.6% 60 6.0 3 1% 3.1% EBITDA 7.3 4.0% 6.8 3.5% Sales revenue decline of 5% Ocean freight rate deterioration 3 large FCL account losses early 2011 Perishable facilities established in NSW to complement Victoria and N
Slide 19: USA overall result
US$ million This Year Last Year Sales revenue 332.3 308.2 EBITA 12 1 12.1 3 7% 3.7% 82 8.2 2 7% 2.7% EBITDA 15.3 4.6% 10.7 3.5% Overall result satisfactory driven by Mainfreight improvement
Slide 20: CaroTrans USA
US$ million This Year Last Year Sales revenue 133.4 134.0 EBITA 84 8.4 6 3% 6.3% 87 8.7 6 5% 6.5% EBITDA 9.2 6.9% 9.3 7.0% Revenue and EBITDA static on back of lower US export volume and declining ocean freight rates Strong focus being taken on developing Import product to offset dominance of ex
Slide 21: Mainfreight USA
US$ million This Year Last Year Sales revenue 198.9 174.2 EBITA 3.8 1.9% (0.6) (0.3)% EBITDA 6.1 3.1% 1.4 0.8% Revenue growth across both Domestic (18.8%) and International (10.8%) divisions Have split business into two divisions – Domestic and International Stronger focus on each sector Est
Slide 22: International trade development
International trade development focusing on Asian and European trade lanes Mexico City branch to open June 2012 Toronto branch to open July 2012
Slide 23: Asia result
US$ million This Year Last Year Sales revenue 28.9 26.5 EBITA 18 1.8 6 4% 6.4% 23 2.3 8 9% 8.9% EBITDA 2.1 7.4% 2.5 9.6% Disappointing result Revenue up 9% but not enough in this sized market EBITDA down 16% on poor gross margins and overhead cost increase Revenue Poor in in‐country countr
Slide 24: Asia margin
Margin Competition for volume squeezing margins Over Over‐commitment commitment to air freight bulk service agreement on USA trade lane – now dissolved Sales capacity increased Expect more in‐country sales for Export and Import Europe and USA trade lane focus China network expansion ha
Slide 25: Europe: one year of ownership completed
EU€ million This Year Last Year Year* Sales revenue 244.8 238.3 EBITA 78 7.8 3 2% 3.2% 10 8 10.8 5%# 4.5% 4 EBITDA 16.5 6.7% 19.4 8.1% * 12 month period to 31 December 2010 # Includes I l d amortisation i i off intangibles i ibl on acquisition i i i ini last l year’s ’ figure fi One year of owners
Slide 26: Earn out incentive payment won't be paid
Earn out incentive payment won’t’ bbe paidd Predicated on €20 million EBITDA for period 1 January 2011 to 31 December 2011 EBITDA below €18.33 million threshold Accrual written back to Profit & Loss account as per IFRS ruling, rather than h a write i b backk to goodwill d ill
Slide 27: European Forwarding, Air & Sea, Logistics
European Forwarding d Network expansion: Lyon, France and Hamina, Finland Reduction in Belgian Forwarding from 3 hubs to 2 Rationalisation of European agency networks Air & Sea Network expansion: Brussels, Belgium; Paris, France; and Schiphol, Amsterdam Rebranded this division as Mainf
Slide 28: Europe property and outlook
Property – building b ld projects completed l d Paris, France Ostend, Ostend Belgium Ploiesti, Romania We remain satisfied with our European investment and expansion Expect further growth throughout Europe Customer relationships providing opportunities globally R Remain i vigilant i
Slide 29: Overall performance satisfactory
Overall performance satisfactory satisfactory, however Disappointed in our International division results generally, and the European result Australia and New Zealand trading well and expect ongoing improved financial and operational performance in both markets In China we have halted furthe
Slide 30: Europe and Group outlook
Europe Expect first quarter to disappoint with poor May trading (16 working days vs 21 last year) Second quarter will see benefits of new Logistics accounts and increase in intra‐Europe freight volume for all countries Group Performance Optimistic for overall improvement across Group in 20
Slide 31: Annual Meeting of Shareholders and result release dates
Annuall Meeting off Shareholders h h ld Barrel Hall, Villa Maria Estate 26 July 2012 118 Montgomerie Road, Mangere, Auckland Quarter Release Date Q1 – 3 months ended 30 June 2012 9 August 2012 Q2 – 6 months ended 30 September 2012 13 November 2012 Q3 – 9 months ended 31 December 2012 12 February 201