Mainfreight Limited · NZX:MFT
Mainfreight — FY2023 Earnings Presentation
25 slides from Mainfreight's earnings presentation, May 2023
Slide 1: Mainfreight Limited Full Year Result to 31 March 2023
MAINFREIGHT LIMITED FULL YEAR RESULT TO 31 MARCH 2023
Slide 2: Result Summary
Result Summary Revenue is $5.68 billion REVENUE An increase of 8.8% or $457 million (excluding FX up 4.2%) Offshore revenues are now $4.39 billion: 77.4% Profit Before Tax is $587.4 million Increase of 20.0% or $98.0 million (excluding FX up 14.9%) PBT Offshore PBT now $418.0 million: 71.2% ROR 10.3
Slide 3: Full Year 2023 Overview
Full Year 2023 Overview ▪ Satisfactory overall result despite slower second half: ▪ our third strongest ever. ▪ Disappointing US performance: ▪ One-off costs of US$3m to year end. ▪ Australia similarly affected by A$4m one-off costs. ▪ Operating Cash Flow improvements $504m to $757m. ▪ Expect slower
Slide 4: Dividend
Dividend Directors have approved a final dividend of DIVIDEND 87.0 cents per share Books close 13 July 2023 Payment on 21 July 2023 Full dividend for year 172.0 cents per share, 21.1% increase over the previous year Page 4
Slide 5: Discretionary Bonus
Discretionary Bonus Payable at Board’s discretion to qualifying BONUS team members $79.9 million, down from $94.20 million last year, a reduction of 15.2% Reduction in line with profit growth decline across some branches/regions Page 5
Slide 6: Capital Management
Capital Management NZ$ MILLION THIS YEAR LAST YEAR Operating cash flow $757.21 $503.80 ▪ Net capital expenditure totalled $313.9 million for the period, including: ▪ Land & Buildings $163.1 million ▪ Racking & Fit-out Costs $70.4 million ▪ Plant & Equipment $60.2 million ▪ Information Technology $20
Slide 7: Capital Management continued
Capital Management continued Net debt reduction of $124 million to $123 million in funds NET FUNDS (DEBT) NZ$000 THIS YEAR LAST YEAR Cash on Hand 341,991 202,258 Bank Term Loans (186,788) (176,005) Asset Finance Loans (32,392) (27,321) Net Funds (Debt) 122,811 (1,068) Debt Facilities $510 million $4
Slide 8: Full Year Analysis: Revenue
Full Year Analysis: Revenue $000 THIS YEAR LAST YEAR VARIANCE New Zealand: NZ$ 1,284,860 1,130,399 13.7% Australia: AU$ 1,417,285 1,175,041 20.6% Europe: EU€ 630,658 567,906 11.0% Americas: US$ 959,917 1,089,422 (11.9)% Asia: US$ 152,784 231,008 (33.9)% Total Group: NZ$ 5,675,709 5,218,259
Slide 9: Full Year Analysis: Profit Before Tax
Full Year Analysis: Profit Before Tax $000 THIS YEAR ROR LAST YEAR ROR VARIANCE New Zealand: NZ$ 169,421 13.2% 136,479 12.1% 24.1% Australia: AU$ 136,796 9.7% 107,497 9.1% 27.3% Europe: EU€ 46,860 7.4% 31,664 5.6% 48.0% Americas: US$ 89,248 9.3% 100,831 9.3% (11.5)% Asia: US$ 29,101 19.0% 28
Slide 10: 2 Year Comparison
2 Year Comparison 2023 2022 2021 % Increase Variance Variance Over 2 Yrs REVENUES $000 $000 $000 Total Group First Half 3,003,333 32.1% 2,274,386 41.4% 1,608,861 86.7% Total Group Second Half 2,672,376 -9.2% 2,943,873 52.1% 1,934,977 38.1% Total Group Full Year 5,675,709 8.8% 5,218,259 47.2% 3,543,8
Slide 11: Product Performance
Product Performance NZ$000 THIS YEAR LAST YEAR VARIANCE Transport Revenue 2,242,769 1,914,902 17.1% Profit Before Tax 228,498 183,861 24.3% ROR 10.2% 9.6% Warehousing Revenue 750,179 583,821 28.5% Profit Before Tax 65,374 55,262 18.3% ROR 8.7% 9.5% Air & Ocean Revenue 2,682,761 2,719,535 (1.
Slide 12: Volume Analysis
Volume Analysis NZ$000 THIS YEAR LAST YEAR VARIANCE Air & Ocean Airfreight kilos (000s) 126,941 138,279 (8.2)% Seafreight TEU 392,979 424,610 (7.6)% Fourth Quarter Air & Ocean volumes declined 4% & 17% respectively Transport Tonnes 7,321,452 7,286,572 0.5% Consignments 9,302,305 9,613,669 (3.2
Slide 13: Customer Trading
Customer Trading ▪ Top 500 Customers: Use of Mainfreight Divisions (Transport/Warehousing/Air & Ocean) 1 Division 1 Division 28% 31% 33% 37% 3 Divisions 2023 3 Divisions 2022 35% 36% 2 Divisions 2 Divisions ▪ Top 500 Customers using us in two or more Regions increased to 66% from 64% ▪ Top 500 Custo
Slide 14: New Zealand
Revenue $1,284m 13.7% up New Zealand Profit Before Tax $ 169m 24.1% up ROR 13.2% v 12.1% ▪ Despite challenging infrastructure failings through weather and ferry disruptions, good momentum maintained. ▪ Network intensity increasing: ▪ Whakatane / West Auckland ▪ Cambridge / Auckland – 2023 ▪ Nelson /
Slide 15: Australia
Revenue AU$1,417m 20.6% up Australia Profit Before Tax AU$ 137m 27.3% up ROR 9.7% v 9.1% ▪ Reasonable momentum across all products: ▪ However, Warehousing year-end disappointed – includes one-off costs of AU$4m ▪ Air & Ocean volumes remained consistent and, as with NZ, are continuing to grow market
Slide 16: Europe
Revenue EU€631m 11.0% up Europe Profit Before Tax EU€ 47m 48.0% up ROR 7.4% v 5.6% ▪ Pleasing performance across all three divisions: ▪ Good momentum outside of Netherlands – Belgium in particular. ▪ Transport branch network increasing: ▪ Rotterdam/Tilburg – Netherlands ▪ Katowice/Poznan – Poland ▪
Slide 17: Asia
Revenue US$153m (33.9)% down Asia Profit Before Tax US$ 29m 1.0 % up ROR 19.0% v 12.5% ▪ Whilst PBT reasonably inline: ▪ Revenue reduction as volumes and rates reduce dramatically ▪ Large exposure to TPEB trade – China to USA ▪ Airfreight reduction as air volume finds itself back in sea freight ▪ Ma
Slide 18: The Americas
Revenue US$960m 11.9% down The Americas Profit Before Tax US$ 89m 11.5% down ROR 9.3% v 9.3% ▪ Our poorest performing region: ▪ One-off costs across Transport – US$3m ▪ Lack of customer depth in Transport has seen volumes deteriorate due to slowing economic conditions ▪ Declining volumes and revenue
Slide 19: The Americas
The Americas ▪ Rate review effective 1 April 2023. ▪ Warehouse property consolidation / increase in capacity. ▪ Air & Ocean: ▪ Airfreight division now separated ▪ LA stand-alone facility with chillers to be operational July ▪ CaroTrans increasing LCL consolidations and margins ▪ Leadership changes a
Slide 20: Sustainability
Sustainability ▪ Gross carbon emissions (direct and indirect) have decreased 180,000 tonnes CO2-e largely tied to reduction in Air & Ocean volumes. ▪ Freight emissions intensity were mixed; air and road factors marginally up 1.6% and 0.3%, ocean freight down 22.2%. ▪ Doubling branch solar generation
Slide 21: Future Capital Expenditure Update: F24-F25
Future Capital Expenditure Update: F24-F25 NZ$ MILLION F24 NZ$ MILLION F25 Planned Capital Expenditure $381 Planned Capital Expenditure $295 ▪ Property $237 ▪ Property $192 ▪ Fit-out costs $84 ▪ Fit-out costs $43 ▪ Non-property capex $60 ▪ Non-property capex $60 Property and Fit-out costs F24-F25: N
Slide 22: Group Outlook …
Group Outlook … ▪ Expect a challenging six to twelve months against a strong PCP. ▪ Macroeconomic environment affecting volumes across all three products - Recalibration in inventory levels. ▪ Inflationary pressures impacting: ▪ Cost management underway by branch ▪ Hiring freeze in place ▪ Wage and
Slide 23: Group Outlook …
Group Outlook … ▪ Strong sales activities underway in each region: ▪ Market share focus ▪ Increasing our range of services to all customers ▪ Take advantage of the current environment to further improve our network and service levels. ▪ Remain confident of our medium to long term growth prospects. P
Slide 24: Financial Calendar F24
Financial Calendar F24 DATE Annual Meeting of Shareholders 27 July 2023 F24 – 6 months ended 30 September 2023 9 November 2023 F24 – 12 months ended 31 March 2024 29 May 2024 Page 24
Slide 25: We cannot direct the wind, but we can adjust the sails
We cannot direct the wind, but we can adjust the sails Page 25