Slide 1: FY21 Results Presentation
FY21 RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2021 23 AUGUST 2021 Mark Troughear | Chief Executive Officer Stephan Deschamps| Chief Financial Officer 2
Slide 2: Agenda and Presenters
AGENDA PRESENTERS Introduction & Highlights Financial Results Express Package Mark Troughear Stephan Deschamps Chief Executive Officer Chief Financial Officer Big Chill Information Management Waste Renewal The Startery & Outlook Neil Wilson Steve Wells General Manager of General Manager of Freightwa
Slide 3: Highlights
HIGHLIGHTS OVERALL INFORMATION MANAGEMENT Revenue growth of 27% Improved margins in AU after suffering a decline in activity levels due to Covid GAAP EBITA growth of 21.9% and NPAT growth of 4.6% Print and copy margins have improved steadily over the Adjusting for the accrual of the final Bi
Slide 4: Financial Summary
FINANCIAL SUMMARY FOR THE YEAR ENDED 30 JUNE 2021 FY21 FY20 Change Note $m $m % Revenue 800.5 630.9 26.9 EBITA, before change in fair value of contingent consideration – Big Chill i. 130.5 97.8 33.4 Distribution Limited (BCD) and other income & expenses (non-GAAP) Change in fair value of contingent
Slide 5: Increased Accrual for the Final Payment for Big Chill
INCREASED ACCRUAL FOR THE FINAL PAYMENT FOR BIG CHILL CHANGE IN FAIR VALUE OF CONTINGENT CONSIDERATION 2021 2020 The final payment for BCD, due in August 2022, will be Other (income) expenses: $000 based on a multiple of the BCD FY22 EBITA; A stronger than expected performance for the year Impai
Slide 6: Revenue Segmentation
REVENUE SEGMENTATION FOR THE YEAR ENDED 30 JUNE 2021 FY21 FY20 Change $m $m % Express package & refrigerated transport 572.6 421.6 35.8 Postal 48.5 49.1 (1.3) Storage & handling 60.7 60.3 0.7 Destruction activities 70.6 61.6 14.7 Other (i) 48.1 38.3 25.8 Total revenue 800.5 630.9 26.9 NOTES i. Other
Slide 7: Express Package & Business Mail; Information Management
EXPRESS PACKAGE & BUSINESS MAIL for the year ended 30 June 2021 FY21 FY20 Change $m $m % Operating Revenue 633.0 474.4 33.4 EBITDA 142.8 101.7* 40.4 EBITA 109.5 77.8* 40.8 EBITA Margin 17.3% 16.4%* INFORMATION MANAGEMENT for the year ended 30 June 2021 FY21 FY20 Change $m $m % Operating Revenue 170.
Slide 8: Balance Sheet and Cashflow
BALANCE SHEET CASHFLOW KEY POINTS KEY POINTS Total assets has remained at similar levels to FY20. Cash generated from operations of $198m was $37m above the PCP due to strong results compared to PCP and the inclusion of Big Chill Total liabilities decreased from FY20 by $31m, including: (acqui
Slide 9: Capital Management Policy
CAPITAL MANAGEMENT POLICY CAPITAL MANAGEMENT PRINCIPLES Targeting solid Investment Grade credit profile, at a level that minimises the cost of capital. Range of Net Debt / EBITDA between 2x and 3x. Debt/EBITA DIVIDEND POLICY •ROIC Positive Investments Dividend Policy aligned with Capital Management
Slide 10: Capital Expenditure
CAPITAL EXPENDITURE FOR THE YEAR ENDED 30 JUNE 2021 2021 2022 Full Year Actual Full Year Forecast $M $M Capital Expenditure 18 24 - 26 Depreciation and software amortisation 57 60 (including impact of NZ IFRS 16) Depreciation and software amortisation 22 23 (excluding impact of NZ IFRS 16) 11
Slide 11: Dividend
DIVIDEND FINAL DIVIDEND 18 CPS IMPUTATION CREDITS 7.00 CPS (FULLY IMPUTED AT 28% TAX RATE) SUPPLEMENTARY DIVIDEND 3.1765 CPS RECORD DATE 17 SEPTEMBER 2021 PAYMENT DATE 1 OCTOBER 2021 NOTES I. The DRP will not be offered for this dividend. 12
Slide 12: Strategy: A Family of Brands
STRATEGY A FAMILY OF BRANDS Our market leading brands combine density & shared infrastructure with specialist knowledge in each niche. We work across a range of activities, achieving high levels of quality and efficiency, We focus on adding value to how we pick- up, process and deliver. Our culture
Slide 13: Strategy: Why We Do This
STRATEGY WHY WE DO THIS Better outcomes don’t just happen. It takes a conscious effort from our team to move things forward for our customers, our team, our shareholders and our communities. Our “why” is we move you to a better place. HOW WE WORK Three principles guide how our teams and our partners
Slide 14: Express Package
EXPRESS PACKAGE 23 AUGUST 2021 Scott Hedgman | Steve Wells Express Package 15
Slide 15: B2C Network Item Growth: FY21 v FY19
EXPRESS PACKAGE B2C NETWORK ITEM GROWTH: FY21 V FY19 60% 50% 40% 30% 52% 49% 48% 20% 38% 38% 37% 36% 34% 28% 25% 25% 25% 10% 0% JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN 16
Slide 16: B2C Proportion of Total Items
EXPRESS PACKAGE B2C PROPORTION OF TOTAL ITEMS – NETWORK COURIERS PRE-LOCKDOWN DURING LOCKDOWNS NEW “NORMAL” 14% 20% 17% 17
Slide 17: Pricing for Effort – B2C Pricing per Item
EXPRESS PACKAGE PRICING FOR EFFORT – B2C PRICING PER ITEM JULY ‘20 JANUARY ‘21 JUNE ‘21 $0.71 $1.04 $1.32 18
Slide 18: Express Package Strategy: Pricing for Effort
EXPRESS PACKAGE STRATEGY PRICING FOR EFFORT – B2C 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 III of PFE for residential deliveries was launched effective February 2021 at an addit
Slide 19: Express Package Strategy: eCommerce
EXPRESS PACKAGE STRATEGY The most important aspects of parcel delivery are: delivering as expected, on time and undamaged. Cost and tracking are also of high importance. ECOMMERCE Delivers your parcels when and how they say they will Doesn’t damage the parcels in transit Our eCommerce proposition
Slide 20: Express Package Strategy: Service
EXPRESS PACKAGE STRATEGY SERVICE Independent transit testing will be conducted over the next 6 months to benchmark our service v our key competitors. Our latest transit testing and internal measurement have set positive NEW ZEALAND COURIERS DELIVERED UNDER benchmarks for FY22 PRESSURE AT THE BUSIE
Slide 21: Express Package Strategy: Contractor Status
EXPRESS PACKAGE STRATEGY CONTRACTOR STATUS EXAMPLE AVERAGE NZC DRIVER A Tripartite Working Group is considering options to better Average Gross Earnings $120,000.00 protect contractors. The group is due to report to the Minister at the end of 2021. Average Costs* -$28,800.00 FRE have submitted t
Slide 22: Network Courier Revenue – Weeks Trading
EXPRESS PACKAGE NETWORK COURIER REVENUE – 6 WEEKS TRADING PRE‐COVID19 LEVEL 4 LOCKDOWN 18 AUGUST 2021 TRADING FY22 PRICE PFE B2C REVENUE INCREASES INCREASES SURCHARGES 4.2% 3.0% 1.1% 1.5% 9.8% 23
Slide 23: Big Chill Distribution
BIG CHILL DISTRIBUTION 23 AUGUST 2021 Mike Roberts | Big Chill 24
Slide 24: Background
BACKGROUND CURRENT STATE BCD operate in the NZ temperature-controlled transport and storage market providing; ‒ Express Parcel delivery to: Foodservice providers, Supermarkets, Hospitality and Quick Service Restaurants ‒ 3PL services for a range of clients in Auckland ‒ Full Truck Load services fo
Slide 25: BCD Strategy
BCD STRATEGY GOAL To maintain and grow our position as the supplier of choice for fresh and frozen food distribution across NZ. NETWORK • We will expand our facilities in Christchurch and Waikato/BOP region to be able to cope with expected demand. • Assess bolt-on acquisitions at the right time and
Slide 26: Information Management
INFORMATION MANAGEMENT 23 AUGUST 2021 Neil Wilson | General Manager 27
Slide 27: Information Management Strategy: Digital Revenue
INFORMATION MANAGEMENT STRATEGY DIGITAL REVENUE POSITIONING FOR DIGITAL GROWTH A new 3PL service offering being trialled in NZ. A number of cornerstone customers already secured to assist scaling the new business model. The Startery has assisted by focussing on customers with high unmet needs ta
Slide 28: Information Management Strategy: Key Strategies
INFORMATION MANAGEMENT STRATEGY KEY STRATEGIES Media and archive activity levels have been impacted by Covid, TIMG AU Overhead Labour particularly in Australia. Pricing improvement has been implemented to protect margins. As a % of revenue: Sales resources focused on new business in areas with w
Slide 29: Waste Renewal
WASTE RENEWAL 23 AUGUST 2021 Neil Wilson | Freightways 30
Slide 30: Waste Sector Growth
WASTE SECTOR GROWTH POSITIONING FOR A SUSTAINABLE FUTURE Current State Future Strategy Medical Paper e-waste Product Liquid Soft Food Textiles Waste Destruction Paper Plastics Waste Board INTEGRATED LOGISTICS COLLECTION SERVICE AUTOMATED CUSTOMER REPORTING – TONNES DIVERTED, CO2, RENEWAL, PRODUCTS P
Slide 31: Saveboard Business Model
SAVEBOARD BUSINESS MODEL •Fonterra •Frucor •Skycity FEED STOCK •Freightways SUPPLIERS •Goodman Fielder •Nestle SAVEBOARD PROGRESS TO DATE Expected to be operational late 2021, first production line will divert 4,000 tonnes of waste from landfill. New Zealand building code compliance achieved C
Slide 32: The Startery: Purpose and Pipeline
PURPOSE To build meaningful new lines of business for FRE over a 5-year timeline. Provides FRE businesses a structured process to test and incubate new ideas Focus on Horizon 2 and 3 growth leveraging existing business capability Incremental lean funding to manage risk and start-up complexit
Slide 33: Outlook
OUTLOOK 23 AUGUST 2021 Mark Troughear | Chief Executive Officer Stephan Deschamps | Chief Financial Officer 34
Slide 34: Outlook (1/2)
OUTLOOK (1/2) We were encouraged by revenue growth in Express Package in the first 6 weeks of FY22. Last week, New Zealand entered an alert level 4 lockdown, after similar decision in a number of Australian states. As a result, we have immediately implemented our well- established processes to e
Slide 35: Outlook (2/2)
OUTLOOK (2/2) Whilst we are targeting revenue and earnings growth in FY22 from all of our business units we remain conscious that even the best laid plans can be influenced by macro factors that we are less able to control: A tight labour market putting upward pressure on labour costs, Current
Slide 36: Conclusion
CONCLUSION FY21 was a record year for Freightways in terms of earnings, the contribution of acquisitions, the exploration of new services and growth of contractor incomes. We are excited by the opportunities in front of all of our businesses in FY22 to continue to develop and where appropriate b
Slide 37: Appendices
APPENDICES 23 AUGUST 2021 Mark Troughear | Chief Executive Officer Stephan Deschamps | Chief Financial Officer 38
Slide 38: Appendix: Reconciliation of GAAP to Pre-NZ IFRS16 and Other Expenses
APPENDIX: RECONCILIATION OF GAAP TO PRE-NZ IFRS16 AND OTHER EXPENSES for the year ended 30 June 2021 FY21 FY20 Change FREIGHTWAYS GROUP $m $m % Operating Revenue 800.5 630.9 26.9 EBITDA (GAAP) 164.6 135.1 21.8 Add: Change in fair value of contingent consideration – Big Chill 23.0 - Distribution Limi
Slide 39: Appendix: Reconciliation – Express Package & Business Mail
APPENDIX: RECONCILIATION OF GAAP TO PRE-NZ IFRS16 AND OTHER EXPENSES for the year ended 30 June 2021 FY21 FY20 Change EXPRESS PACKAGE & BUSINESS MAIL $m $m % Operating Revenue 633.0 474.4 33.4 EBITDA (GAAP) 142.8 98.3 45.3 Add: Other expenses - 3.3 100 EBITDA (before other expenses) 142.8 101.6 40.6
Slide 40: Appendix: Reconciliation – Information Management
APPENDIX: RECONCILIATION OF GAAP TO PRE-NZ IFRS16 AND OTHER EXPENSES for the year ended 30 June 2021 FY21 FY20 Change INFORMATION MANAGEMENT $m $m % Operating Revenue 170.7 158.7 7.6 EBITDA (GAAP) 50.8 41.8 21.5 Add: Other expenses - 5.3 100 EBITDA (before other expenses) 50.8 47.1 7.9 Less: NZ IFRS
Slide 41: Disclaimer
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, securities
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