Slide 1: Full Year Presentation
Full Year Presentation 8 August 2005
Slide 2: This presentation relates to the Freightways Limited NZX announcement and media release of 8
This presentation relates to the Freightways Limited NZX announcement and media release of 8 August 2005. As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.
Slide 3: Presentation
Presentation 2005 highlights Operating performance Business strategy Outlook
Slide 4: Freightways
Freightways
Slide 5: 2005 Highlights
2005 Highlights
Slide 6: General Highlights
General Highlights • All subsidiaries have performed very well • Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets • Archive Security acquisition performed fully to expectation during first full year of own
Slide 7: Financial Highlights
Financial Highlights 2005 2004 variance $000 $000 % Operating revenue 233,725 214,498 9% EBITDA 54,996 45,618 21% EBITA 50,539 40,714 24% NPAT 21,991 16,137 36% NPATA 26,948 21,081 28% Earnings per share (NPAT) 17 cents 13 cents 30%
Slide 8: Operating Performance
Operating Performance
Slide 9: Operating Revenue
Operating Revenue 250 200 150 $M 2nd Half 100 1st Half 50 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Year Ended • 9% revenue growth compared to 2004 • 5-year compound average annual revenue growth of 7%
Slide 10: Where Revenue Growth Has Come From
Where Revenue Growth Has Come From 240 1% 234 3% 0.5% 230 4.5% 220 214 $M 210 200 190 180 2004 Organic Pricing Market share Acquisition 2005 Growth drivers
Slide 11: EBITA
EBITA 50 40 $M 30 2nd Half 20 1st Half 10 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Year Ended • 24% EBITA growth compared to 2004 • 5-year compound average annual EBITA growth of 19%
Slide 12: Drivers of EBITA Growth
Drivers of EBITA Growth • Good cost control • Disciplined margin focus relating to new business • Favourable business mix • Leverage gained by adding revenue to established national infrastructure
Slide 13: Cash Flows
Cash Flows • Cash generated from operations of $55m reflects strong EBITDA result • Capital expenditure at expectation of $8.6m • Borrowings reduced by $4m during the year
Slide 14: Balance Sheet
Balance Sheet • Continuation of strong negative working capital position • Increase in fixed assets of $4m (net of depreciation) • Reduction in bank borrowings of $4m • Goodwill amortised over 20 years ($5m annual charge)
Slide 15: Dividends
Dividends Jun-05 Dec-04 Jun-04 Dec-03 Dividend declared $10.7m $9.45m $8.55m $7.25m Cents per share 8.50 7.50 6.90 5.85 Full year (cps) 16.00 12.75 Key points: • Increase of 26% compared to 2004 • Fully Imputed • Record date 16 September 2005 • Payable 30 September 2005
Slide 16: Finance Facilities
Finance Facilities • Refinancing completed November 2004 to replace subordinated debt with core bank debt • Interest savings of approximately $500k p.a. flow from 1 July 2005 • New finance facility provides $140m core debt and $15m acquisition facility • Debt drawn to $127m at 30 June 2005
Slide 17: Business Strategy
Freightways Business Strategy Hubs Shuttle Links Courier "Spoke" to/from area Geographic Area
Slide 18: Business strategy
Business strategy • Continued development of growth opportunities in Freightways’ existing three core markets • Positioning, People, Performance, Profit • Explore incremental and complementary growth opportunities • Invest in IT and infrastructure
Slide 19: Outlook
Freightways Outlook
Slide 20: Capital expenditure
Capital expenditure 2006 2005 Forecast Actual Capital expenditure $7.2m $8.6m Depreciation $5.3m $4.5m • 2005/06 includes stepped investment in core IT infrastructure
Slide 21: Outlook
Outlook • A less buoyant economy is expected • Investment in people and infrastructure • Characteristics of competitive environment expected to remain unchanged • Consistent application of proven market strategies • All subsidiaries well positioned to accommodate growth • Positive outlook for shareh
Slide 22: Summary
Summary Strong successful business Positioned to deliver continuing earnings growth Delivering an attractive dividend yield