Slide 1: ASM 25 October 2018
ASM 25 October 2018 Sue Sheldon | Chairman Mark Troughear | CEO
Slide 2: A heritage that started in 1964
A heritage that started in 1964
Slide 3: Sue Sheldon, Chairman
SUE SHELDON CHAIRMAN · ASM PRESENTATION · INTRODUCTION · Slide 3
Slide 4: Agenda
AGENDA − Chairman’s Introduction − CEO’s Review and Trading Update − Resolutions · ASM PRESENTATION · INTRODUCTION · Slide 4
Slide 5: General Highlights
GENERAL HIGHLIGHTS
Slide 6: General Highlights
GENERAL HIGHLIGHTS − Year on year revenue, earnings and dividend growth − Investment in capacity for the air network and critical Auckland and Christchurch facilities − The move to Agile IT deployment − A successful first year in the Medical Waste industry − The successful completion of a major data
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Jun‐18 Jun‐17 Increase Note $M $M % Revenue 580.9 545.3 6.5 EBITA (before non‐recurring items) (i) 93.7 89.3 4.9 Non‐recurring items 2.6 3.7 EBITA (ii) 96.3 93.0 3.5 NPAT (before non‐recurring items) (iii) 59.6 56.6 5.3 Non‐recurring items after tax 2.6 4.3 NPAT (iv) 62.2 60.9 2
Slide 8: FY18 Express Package & Business Mail
FY18 EXPRESS PACKAGE & BUSINESS MAIL Operating Revenue EBITDA $428.8m 6.5% $74.8m 6.4% EBITA EBITA Margin $67.9m 4% 15.8% · ASM PRESENTATION · INTRODUCTION · Slide 8
Slide 9: FY18 Information Management
FY18 INFORMATION MANAGEMENT * EBITDA, EBITA and EBITA Margin represent the operating results of the division, exclusive of any non-recurring items. Operating Revenue EBITDA* $153.8m 6.6% $35.4m 8.1% EBITA * EBITA Margin * $29.8m 7.8% 4% 19.4% · ASM PRESENTATION · INTRODUCTION · Slide 9
Slide 10: Final Dividend
FINAL DIVIDEND − Final dividend: 15.25 cps − Imputation credits: 5.9306 cps (at 28% tax rate) − Supplementary dividend: 2.6912 cps − Record date: 14 September 2018 − Payment date: 2 October 2018 − No DRP was offered in respect of this dividend · ASM PRESENTATION · INTRODUCTION · Slide 10
Slide 11: Corporate Governance
CORPORATE GOVERNANCE − Compliance with the new NZX Corporate Governance Code − Launched an updated Freightways website − 2018 annual report expands on Freightways strategy and a range of ESG initiatives · ASM PRESENTATION · INTRODUCTION · Slide 11
Slide 12: Mark Troughear, CEO
MARK TROUGHEAR CEO · ASM PRESENTATION · INTRODUCTION · Slide 12
Slide 13: Agenda
AGENDA − Business Strategy: • Express Package & Business Mail • Information Management − ESG Initiatives − Trading Update − Outlook · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 13
Slide 14: Express Package Video
Express Package Video
Slide 15: Express Package & Business Mail
EXPRESS PACKAGE & BUSINESS MAIL · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 15
Slide 16: Express Package & Business Mail
EXPRESS PACKAGE & BUSINESS MAIL 1. Residential Network Review • Assess the opportunities across our various brands to improve our delivery density, productivity and courier earnings • Our objective is to improve our residential delivery productivity by at least 5% 2. Pricing for Effort • Recognise t
Slide 17: Express Package & Business Mail
EXPRESS PACKAGE & BUSINESS MAIL 3. Visibility and Data Analytics • Improve visibility for customers and receivers on the progress of their deliveries and improve reporting on every aspect of our business for our teams • Our objective is to improve customer and receiver satisfaction and enable our te
Slide 18: Information Management
INFORMATION MANAGEMENT · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 18
Slide 19: Information Management: Facility Utilisation
INFORMATION MANAGEMENT 1. Facility Utilisation • Warehouse utilisation was 81% in NZ and 61% in Australia at the end of 2018. OUR OBJECTIVE: 83% 70% FY19 NZ FY19 AU · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 19
Slide 20: Information Management: Digital Services and Medical Waste
INFORMATION MANAGEMENT 2. Growth in Digital Services • Invest in further sales & marketing resource to be able to scale-up our digital revenue streams, which are currently circa 10% of revenue for this division • Our goal is to grow the revenue for these services and, through that scale, drive impro
Slide 21: Acquisitions and Alliances
ACQUISITIONS AND ALLIANCES 1. Acquisitions completed in 2018 • Bolt-on Secure Destruction business in NSW • Records Management business in VIC • Medical Waste business in NSW which allows us to establish a starting point in medical and sanitary collection and disposal services 2. Acquisitions comple
Slide 22: ESG Initiatives
ESG INITIATIVES 1. Materiality assessment · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 22
Slide 23: ESG Initiatives: Materiality assessment
ESG INITIATIVES 2. Materiality assessment: SDG 3 Good health and well-being SDG 8 Decent work and economic growth SDG 9 Industry, innovation and infrastructure SDG 13 Climate action SDG 16 Peace, justice and strong institutions · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 23
Slide 24: ESG Initiatives: Highlights
ESG INITIATIVES 3. Highlights • SDG 3: Installed Guardian Seeing Machines into the cabs of our linehaul fleet • SDG 8: Implemented a programme to provide a pathway for school leavers and long-term unemployed into the workforce • SDG 8: Implemented Employee Assistance Programme across NZ and AU • SDG
Slide 25: Key Sustainable Developmental Goals
KEY SUSTAINABLE DEVELOPMENTAL GOALS 4. Courier earnings (SDG 8) • Average courier revenue = NZ$97,000 per annum • Significant improvements to point-to-point and residential incomes over the past 6 months • Trial of a new residential courier pay model at Post Haste • Average courier pay up 8-10% year
Slide 26: Q1 Trading Update
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Slide 27: Q1 Consolidated Performance
Q1 CONSOLIDATED PERFORMANCE Quarter ended: (Unaudited) Sept‐18 Sept‐17 Increase Note $M $M % Revenue 155.1 143.2 8.3 EBITDA (i) 27.6 26.9 2.5 EBITA (ii) 23.9 23.6 1.4 NPATA (iii) 15.6 15.5 0.2 NPAT (iv) 15.1 15.0 0.2 NOTES (i) Operating profit before interest, tax, depreciation and amortisation (ii)
Slide 28: Q1 Express Package & Business Mail
Q1 EXPRESS PACKAGE & BUSINESS MAIL * Unaudited Operating Revenue EBITDA $114.1m 8.3% $19.4m 6.6% EBITA EBITA Margin $17.5m 6% 6% 15.4% · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 28
Slide 29: Q1 Information Management
Q1 INFORMATION MANAGEMENT * Unaudited Operating Revenue EBITDA $41.6m 8.5% 8.5% $9.3m 0.1% 0.1% EBITA EBITA Margin $7.8m 1.7% (1.7%) 18.7% · ASM PRESENTATION · CEO’S REVIEW & TRADING UPDATE · Slide 29
Slide 30: Outlook
OUTLOOK 1. Increased demand for services in both divisions 2. Continue to target year on year earnings growth for FRE 3. Expect by the end of 2019 that our pricing and efficiency initiatives for B2C are gaining traction 4. Investing for the future in terms of IT, sales and marketing resource 5. Capi
Slide 31: Questions
QUESTIONS © = v7
Slide 32: Resolutions
RESOLUTIONS 1. Election of Director – Abby Foote 2. Election of Director – Andrea Staines 3. Re-election of Director – Peter Kean 4. Approval of Directors’ fees 5. Authority to fix Auditor’s remuneration · ASM PRESENTATION · RESOLUTIONS · Slide 32
Slide 33: ASM 25 October 2018
ASM 25 October 2018 Sue Sheldon | Chairman Mark Troughear | CEO