Slide 1: Half Year Presentation
Half Year Presentation 11 February 2008
Slide 2: Relation to NZX announcement and media release
This presentation relates to the Freightways Limited NZX announcement and media release of 11 February 2008. As such it should be read in conjunction with, and is subject to, the explanations and views contained in those releases. These half year results are drawn from financial statements prepared
Slide 3: Presentation
Presentation ¾ 2008 Half Year Highlights ¾ Operating Performance ¾ Business Strategy ¾ Outlook
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Slide 5: 2008 Half Year Highlights
Freightways 2008 Half Year Highlights
Slide 6: General Highlights
General Highlights • Core businesses have performed well in a challenging domestic marketplace • Emerging businesses have delivered outstanding growth • Recently acquired Australian businesses have delivered against expectations and created a platform for further growth • FRE has delivered another r
Slide 7: Financial Highlights
Financial Highlights Dec-07 Dec-06 Increase $000 $000 % Operating revenue 161,897 144,273 12% EBITD 35,111 32,976 6% EBIT 31,374 29,712 6% NPAT 16,765 16,446 2% Dividend (cents per share) 9.5 cents 9 cents 6% (NB. All re sults above e xclude goodwill amortisation pe r NZ IFRS)
Slide 8: Operating Performance
Freightways Operating Performance
Slide 9: Operating Revenue
Operating Revenue 300 250 200 $M 150 2nd Half 100 1st Half 50 - 99 00 01 02 03 04 05 06 07 08 n n n n n n n n n n Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Year Ended • 12% revenue growth compared to 2007 • 5-year compound average annual revenue growth of 10%
Slide 10: Where Revenue Growth Has Come From
Where Revenue Growth Has Come From 180 170 5% 162 160 5% 150 144 0% 2% 140 $M 130 120 110 100 2007 Or g a n i c P ric ing Ne w B usine ss Ac quisit io n 2008 Grow th drivers
Slide 11: EBIT
EBIT 60 50 40 2nd Half $M 30 1st Half 20 10 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06 Jun07 Jun08 Year Ended • 6% EBIT growth compared to 2006 • 5-year compound average annual EBIT growth of 13%
Slide 12: Business Segments
Business Segments Operating Performance - Half Year to 31 Dec-07 Revenue EBIT 86% 85% 14% 15% Express Package & Business Mail Information Management
Slide 13: Express Package and Business Mail
Express Package and Business Mail Dec-07 Dec-06 Increase $000 $000 % Operating revenue 140,102 131,251 7% EBIT 27,250 26,868 1% Margin 19% 20%
Slide 14: Information Management
Information Management Dec-07 Dec-06 Increase $000 $000 % Operating revenue 22,418 13,601 65% EBIT 4,750 3,234 47% Margin 21% 24%
Slide 15: Balance Sheet
Balance Sheet • Negative working capital position continues • Increase in fixed assets of $3m (net of depreciation) • Increase in bank borrowings of $20m • Increase in intangibles of $16m • Initial recognition of derivatives fair value at $4m
Slide 16: Cash Flows
Cash Flows • Cash generated from operations of $32m • Capital expenditure of $6m • Payments for acquisitions of $21m • Borrowings increased by $20m during the period
Slide 17: Dividends
Dividends Dec-07 Jun-07 Dec-06 Jun-06 Dividend declared $12.2m $11.6m $11.6m $11.2m Cents per share 9.50 9.00 9.00 8.75 Key points: • Increase in cents per share of 6% compared to Half Year 2007 • Fully Imputed • Record date: Friday, 14 March 2008 • Payment date: Monday, 31 March 2008
Slide 18: Business Strategy
Freightways Business Strategy Hubs Shuttle Links Courier "Spoke" to/from area Geographic Area
Slide 19: Business strategy
Business strategy • Develop organic growth opportunities • Positioning, People, Performance, Profit • Explore complementary acquisition and alliance opportunities
Slide 20: Outlook
Freightways Outlook
Slide 21: Capital expenditure
Capital expenditure 2008 Half Year Full Year Actual Forecast Capital expenditure $6.0m $14m Depreciation $3.8m $8m • 2008 forecast capex includes $5m towards the development of the Porirua land purchased in December 2006 • 2008 depreciation reflects progressive capitalisation of investment in core I
Slide 22: Outlook
Outlook • Core business expected to deliver sound performance in line with recent trends • Emerging businesses expected to deliver strong growth on both sides of the Tasman • Investment in people, infrastructure and customer service initiatives (competitive advantage) will continue • Characteristics
Slide 23: Summary
Summary 9 Strong successful business 9 Positioned to deliver continuing earnings growth 9 Delivering an attractive dividend yield