Freightways Group Limited · NZX:FRW
Freightways — H1 FY2024 Earnings Presentation
25 slides from Freightways's earnings presentation, Feb 19, 2024
Slide 1: Freightways HY24 Result: A Platform for Growth
HY24 RESULT FREIGHTWAYS A PLATFORM FOR GROWTH 19 FEBRUARY 2024 NZX | ASX FRW
Slide 2: Disclaimer
Disclaimer Read this presentation with the financial statements The financial results in this presentation should be read in conjunction with the financial statements for the half year ended 31 December 2023, which can be found in the Freightways half year results announcement available on the NZX a
Slide 3: Contents and Presenters
Contents Presenters Slide 1. Introduction 4 2. Financial Summary 6 Capital Management 3. Divisional Performance 10 MARK TROUGHEAR STEPHAN DESCHAMPS Chief Executive Officer Chief Financial Officer 4. Business Strategy 15 5. Outlook 19 6. Appendices 22 NEIL WILSON STEVE WELLS General Manager General M
Slide 4: Our Four Lines of Business
Our Four Lines of Business EXPRESS PACKAGE & TEMPERATURE INFORMATION WASTE RENEWAL BUSINESS MAIL CONTROLLED MANAGEMENT • B2B - overnight national network delivery - courier and • Physical storage and • Document Destruction • Refrigerated national transport OVERVIEW mail information management • Medi
Slide 5: Our Trans-Tasman Footprint
Our Trans-Tasman Footprint AUSTRALIA (35% Revenue) NEW ZEALAND (65% Revenue) Whangarei Tauranga Darwin Auckland / North Shore Townsville Rotorua Hamilton / Putaruru Hawke's Bay New Plymouth Brisbane Taupo Whanganui Perth Sydney Palmerston North Nelson / Blenheim Wellington Adelaide Canberra Central
Slide 6: Financial Summary and Capital Management
FREIGHTWAYS HY24 RESULT Financial Summary and Capital Management 6 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 7: HY24 Group Highlights
HY24 Group Highlights1 12.4% 0.5% 9.5% Revenue Growth EBITA2 Growth NPAT3 Growth 18c Dividend (same as HY23) Across Freightways Across Freightways Across Freightways NOTES 1. Metrics shown relative to pcp 2. Non-GAAP measure 3. GAAP (Generally Accepted Accounting Practice), IFRS-compliant measure 7
Slide 8: HY24 Consolidated Performance
HY24 Consolidated Performance HY24 PERFORMANCE OVERVIEW HY24 HY23 Change Note $m $m % • Revenue growth of 12.4% supported by growth across both EPBM of Operating Revenue 620.7 552.1 12.4 14.8% and IM of 2% EBITDA (non-GAAP) 1 119.5 113.7 5.1 • Solid performances for Allied Express, Network Couriers
Slide 9: Capital Management and Dividend Policy
Capital Management and Dividend Policy CAPITAL MANAGEMENT PRINCIPLES • Targeting solid Investment Grade credit profile, at a level that minimises the cost of capital • Net Debt / EBITDA between 2.0x and 3.0x post IFRS16 INTERIM DIVIDEND | 18 CPS (= pcp) DIVIDEND POLICY 7.00 cps Imputation credits •
Slide 10: Divisional Performance
FREIGHTWAYS HY24 RESULT Divisional Performance 10 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 11: HY24 Express Package and Business Mail
HY24 Express Package and Business Mail • EPBM divisional revenue up 15% on the pcp (including Allied’s HY24 HY23 Change Note $m $m % contribution) Operating Revenue 517.1 450.3 14.8 • EPBM EBITA is flat on pcp • Labour markets have loosened with no material vacancies in any EBITDA (non-GAAP) 1 97.0
Slide 12: HY24 Trans-Tasman Express Package & Business Mail
HY24 Trans-Tasman Express Package & Business Mail NEW ZEALAND AUSTRALIA • NZ Network volume for HY24 was up 1.8% on the • Allied has performed well over the half. While same- pcp (including lower priced eCommerce, customer volumes are down slightly, Allied has done equivalent to 3% of volume) well t
Slide 13: NZ Network Courier Item Trend For HY24
NZ Network Courier Item Trend For HY24 Volume is [As a % of HY23] up 1.8% for the half year VOLUME WEEKS 13 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 14: HY24 Information Management and Waste Renewal
HY24 Information Management and Waste Renewal HY24 HY23 Change Note $m $m % • TIMG (AU & NZ) revenue is up 4% overall (measured in the Operating Revenue 105.7 103.6 2.0 functional currency of the entities) – key contributors are digitalisation revenue and Stocka (new eCommerce 3PL start up) EBITDA (
Slide 15: Strategy Update
FREIGHTWAYS HY24 RESULT Strategy Update 15 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 16: Three Horizons of Growth
Three Horizons of Growth HORIZON 1 HORIZON 2 HORIZON 3 BUSINESS DIVISION EXTEND AND DEFEND GROW SCALE ESTABLISH NEW LINES OF BUSINESS B2B B2C OVERSIZE (25KG+) • Focus on a profitable market • Acquired First Global in • Scale Oversize revenue in NZ share gains November to provide a cross • New busine
Slide 17: Three Horizons of Growth
Three Horizons of Growth ACTIVITIES HORIZON 1 HORIZON 2 HORIZON 3 BUSINESS DIVISION EXTEND AND DEFEND GROW SCALE ESTABLISH NEW LINES OF BUSINESS STORAGE DIGITISATION ECOMMERCE 3PL • Improvement in utilisation of • Digital revenues up 19% and 31% • STOCKA eCommerce offering existing warehouses throug
Slide 18: Disciplined Approach to M&A
Disciplined Approach to M&A Target characteristics: Acquisition Strategy & Investment Criteria Established / profitable, well-managed and growing businesses Revenue and EBITA are up under Freightways ownership Significant investments made in automation and new or Earnings accretive acquisitions
Slide 19: Outlook
FREIGHTWAYS HY24 RESULT Outlook 19 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 20: Outlook
Stable volumes likely to continue Outlook despite tough economic • Volumes have remained stable in Australia and New Zealand and will continue to be subject to the conditions economic environment in both countries • Labour markets have eased and we expect labour rate increases to normalise in FY25 •
Slide 21: Questions
FREIGHTWAYS HY24 RESULT Questions 21 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 22: Appendices
FREIGHTWAYS HY24 RESULT Appendices 22 | FREIGHTWAYS HY24 RESULTS PRESENTATION
Slide 23: Appendix – Reconciliation of post-IFRS16 to pre-IFRS16
Appendix – Reconciliation of post-IFRS16 to pre-IFRS16 (unaudited) FREIGHTWAYS GROUP HY24 ($m) HY23 ($m) Post NZ IFRS16 NZ IFRS16 Pre NZ IFRS16 Post NZ IFRS16 NZ IFRS16 Pre NZ IFRS16 Notes adjustment (non-GAAP) adjustment (non-GAAP) Operating Revenue 620.7 - 620.7 552.1 - 552.1 EBITDA (non-GAAP) 1 1
Slide 24: Appendix – Reconciliation of post-IFRS16 to pre-IFRS16
Appendix – Reconciliation of post-IFRS16 to pre-IFRS16 (unaudited) EXPRESS PACKAGE & BUSINESS MAIL Notes HY24 ($m) HY23 ($m) Change (%) Operating Revenue 517.1 450.3 14.8 EBITDA (after NZ IFRS16) 1 97.0 92.1 5.3 Less: NZ IFRS16 adjustment (20.9) (16.1) 30.4 EBITDA (before NZ IFRS16) 76.0 76.1 (0.1)
Slide 25: Appendix – Reconciliation of post-IFRS16 to pre-IFRS16
Appendix – Reconciliation of post-IFRS16 to pre-IFRS16 (unaudited) INFORMATION MANAGEMENT & WASTE Notes HY24 ($m) HY23 ($m) Change (%) RENEWAL Operating Revenue 105.7 103.6 2.0 EBITDA (after NZ IFRS16) 1 27.9 26.3 6.2 Less: NZ IFRS16 adjustment (10.6) (9.4) 11.9 EBITDA (before NZ IFRS16) 17.3 16.8 3