Mainfreight Limited · NZX:MFT
Mainfreight — Investor Day (October 2022)
48 slides from Mainfreight's investor day presentation, Oct 21, 2022
Slide 1: Mainfreight: Investor Day, Hobsonville
MAINFREIGHT: INVESTOR DAY, HOBSONVILLE 21 OCTOBER 2022
Slide 2: Agenda
Agenda • 9.00 am Welcome Don Braid • 9.05 am New Zealand Carl George • 9.20 am Europe Ben Fitts • 9.35 am Australia Rodd Morgan • 9.50 am Americas Jason Braid • 10.05 am Asia Cary Chung • 10.20 am Morning tea • 10.50 am Technology John Eshuis • 11.05 am E.S.G. Martin Devereux/Shaun Morrow • 11.20 am
Slide 3: New Zealand
Kaitaia Whangarei New Zealand Auckland Hamilton Thames Tauranga Whakatane Carl George Rotorua Taupo Gisborne New Plymouth 2,940 Team Whanganui Napier Palmerston North 88 Branches / 28 Locations Levin Masterton Wellington NZ $645M / 29.6% Revenue (6 months) Nelson Blenheim NZ $75M / 55.2% P.B.T.
Slide 4: Current Trading/Outlook
Current Trading/Outlook • General – Trading through to September has shown good momentum. All divisions trading ahead YTD. Traditional peak season planning completed. • Transport – Consistent tonnages YTD – strong sales pipelines and tender opportunities. Introduction of two new start up branches th
Slide 5: Hobsonville – Why are we here?
Hobsonville – Why are we here? • Closer to our customers • Direct inbound / outbound services • Later pick ups/earlier deliveries • Increased exposure to a growing catchment of Auckland • Release valve of volume on our South Auckland branches • Costs
Slide 6: Property and Network Development
Property and Network Development NZ Property Favona Road 2Home Auckland Alderman Place planned Capex 40,000m2 Warehouse 22,000m2 Cross-Dock / WH Specialised Wharf / Tankers June 2023 End Loading June 2024 / CFS on Rail Late 2023 2023-2024 $203m Beach Road O’Rorke Road Hugo Johnson 20,000m2 Specialis
Slide 7: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges Transport Air & Ocean • Continued network development • Continued global branch network development helping open • Focus on additional future rail siding capacity and increased use new markets. Developing more long-haul air/deep sea markets of coastal shi
Slide 8: Europe
Europe Ben Fitts 3,353 Team 47 Branches / 10 Countries €331M/ 27.2% Revenue (6 months) €23.6M / 87.6% P.B.T. (6 months)
Slide 9: Current Trading/Outlook
Current Trading/Outlook • General - Good momentum through the first six months. Each division trading ahead with improved RoR. Inflation and high energy process a cloud on the horizon. Ample opportunity for growth in all countries. • Transport - Volumes consistent YTD. New branches in Tilburg and Ro
Slide 10: Property and Network Development
Property and Network Development Transport : Born • Waddinxveen (3rd Dutch Branch) January 2023 • ‘s-Heerenberg (NL), 22,000m2, late 2024 Ploesti WHS, Romania • Paris: land sought for cross-dock Warehousing: • Born (NL) 56,000m2 (mid 2024) ‘s-Heerenberg Ploesti WH, TPT, Netherlands Romania • Ploiest
Slide 11: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges Transport Air & Ocean • Set Benelux network for growth; ‘s-Heerenberg (NL); • Network development: 17 branches total by year end Waddinxveen (NL), Belgium to follow (3rd branch) • 3rd Dutch branch in ’23. Ireland, additional DE and UK • Raising standards
Slide 12: Australia
Australia Rodd Morgan 2,534 Team 71 Branches / 21 Locations AU $698M / 33.0% Revenue (6 months) AU $63M / 42.2% P.B.T. (6 months)
Slide 13: Australia Network Expansion
Australia Network Expansion Branches 71 → 98 Locations 21 → 35 A&O Presence 14 → 23 Warehousing space 233,989m² → 318,320m² (36%, within 12 months) 32 property projects underway currently
Slide 14: Current Trading/Outlook
Current Trading/Outlook • Strong – good customer mix, sustainable, trading well, with growth potential • Resilient economy but 6 interest rate rises will bite – expect pcp comparisons to tighten • Managing costs, margins & cash collection by branch • Warehousing utilisation acceptable & wharf busine
Slide 15: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges Transport • Development of future branch manager pipeline to fuel our growth is a key focus • Network expansion helps our quality – 95% delivered on our trucks • Building design & technologies evolving – rear loading, 4 sided docks Warehousing • Steadily
Slide 16: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges Continued… • Developing long-haul exports and consolidations across A&O a priority • Infrastructure/network and market penetration providing growth opportunities • Our domestic network development is helping increase our regional A&O growth – exports/impo
Slide 17: Americas
Vancouver CANADA (1) Minneapolis (1) Seattle (4) Toronto (4) Portland (1) Albany (2) Milwaukee (2) Detroit (1) Lehigh Valley (1) Boston (3) Chicago (6) Hartford (2) Salt Lake City (2) UNITED STATES Newark (5) Cleveland (1) Indianapolis (1) Philadelphia (1) Baltimore (1) Columbus (1) San Francisco (2
Slide 18: Current Trading/Outlook
Current Trading/Outlook • RoR: 10.4% up from 7.9% last year • All divisions contributing positively to year-on-year growth • A&O volumes remain strong and ahead of last year • Air import volumes down on back of fewer charter flights • Increasing growth and volumes from everyday true airfreight custo
Slide 19: Property and Network Development
Property and Network Development • Purpose built LTL cross-docks underway in Dallas & Chicago • Land purchase for second LTL cross-dock in Chicago area • Larger purpose-built warehouses at 50k sq meters minimum • Intensification of branch network for all products • Canada for both A&O & CaroTrans •
Slide 20: Dallas Heat Map
Dallas Heat Map Northlake Flower Mound Future Branch Dallas Current Branch Pickups Deliveries Page 20
Slide 21: Chicago Heat Map
Chicago Heat Map Franklin Park West Chicago Chicago Future Branch Current Branch Pickups Deliveries Joilet Page 21
Slide 22: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges • Numerous customer conversion opportunities across our supply chain • New LTL cross-docks bring efficiencies and reputations to and for our business • Change from ‘Freight Forwarder’ to ‘LTL Carrier’ opens domestic growth opportunities • Improving LTL li
Slide 23: Key Initiatives/Opportunities and Challenges Cont...
Key Initiatives/Opportunities and Challenges Cont... • A&O consolidation growth remains key area of focus • CaroTrans performance pleasing in this segment • Strong customer demand is driving us to open larger and new warehouses • Fluctuating customer inventory levels addressed by stronger Service Le
Slide 24: Asia
Beijing Tianjin Korea Qingdao Japan Shanghai Ningbo Xiamen Taipei India Shenzen Asia Guangzhou Hong Kong Khaosiung Cary Chung Thailand 520 Team Vietnam 29 Branches / 10 Countries US $100M / 9.1% Revenue (6 months) Malaysia US $16M / 37.7% P.B.T. (6 months) Singapore Indonesia
Slide 25: Current Trading/Outlook
Current Trading/Outlook • Revenue YTD is US$100M – down (9.1%) – Rate reduction impact • PBT is US$15.8M – up 37.7% – Margins improving via in-country sales and service additions • Airfreight exports remain challenging from Hong Kong and China due to ongoing restrictions in China • Ocean exports als
Slide 26: Network Development
Network Development • A&O – 5 additional branches across China, Thailand, Taiwan and Korea in the next FY and adding our 11th country “India” by Q3 2023 • Warehousing – 4 new warehousing sites in Japan, Malaysia, Thailand and Vietnam • Intercompany network focus is our priority • Develop our commerc
Slide 27: Key Initiatives/Opportunities and Challenges
Key Initiatives/Opportunities and Challenges • Our market development is stronger across the Asian region • Cross-selling across our products • Increasing the number of new customers • Increasing the number of transactions and modes per customers (both new and existing) • Regional sales office acros
Slide 28: Technology
MAINFREIGHT- ¥ Technology John Eshuis
Slide 29: Technology
Azure Cloud supporting Technology global applications where appropriate EU Live and Back USA Live Up Data and Back Centers Up Data Centers NZ Live and Back Up Data Centers
Slide 30: Operating Systems
Operating Systems Infrastructure • Microsoft • HP Equipment • Cisco/Webex networking & collaboration • Palo Alto • Live and Back Up environments aligned globally
Slide 31: Operating Systems: Transport
Operating Systems Transport • Bespoke product in NZ, Australia and Americas • Off-the-shelf product in Europe • Zebra mobile devices for drivers and team • High customer integration via EDI and customer portal Mainchain
Slide 32: Operating Systems: Warehousing
Operating Systems Warehousing • Bespoke product in NZ, Australia, Asia and Americas • Off the shelf product in Europe • Mobile and Voice Picking technology well entrenched • High customer integration through EDI and customer portal Mainchain • Automation & Mechanisation building • High business cont
Slide 33: Operating Systems: Air and Ocean
Operating Systems Air and Ocean • Off the shelf product Cargowise by WiseTech • Strong global experience in the product • Internal capabilities in building supporting functionality • Bespoke product for CaroTrans USA Customer Tools • Bespoke single global solution : Mainchain • Strong analytics capa
Slide 34: Cyber Security
Cyber Security Our people are our best defence! • Awareness and education Cyber Roadmap • Mitigating risks and implementing our cyber initiatives • We employ a threat-based defence approach
Slide 35: Looking Ahead
Looking Ahead Adopt Test Maintel Assess Webex Facial Recognition Track Real Time Machine Emission Robotics Learning Blockchain 365 GPS Tracking RFID AI Microservices Contextual Big Data Data Data Consolidators
Slide 36: Environment/Social/Governance
ENVIRONMENT/SOCIAL/GOVERNANCE Martin Devereux / Shaun Morrow
Slide 37: Sustainability - Environmental
Sustainability - Environmental • Emissions – Direct / Indirect • 36,063 / 1,644,036 tonnes CO2e respectively • Targets, Intensity measures and continuous improvement • Drops in all 5 intensity measures • Carbon Emissions Reporting for Customers • Initiatives being taken: • Transport – Electric vehic
Slide 38: Sustainability - Social
Sustainability - Social • Promotion from within – global career paths • Training programs driving culture, safety and leadership in every region • Induction courses • Easy to Do Business With courses • Safety courses and well-being forums/initiatives • Leadership Training • Outward Bound (Global pro
Slide 39: Sustainability – Social
Sustainability – Social Team Numbers as THIS YEAR LAST YEAR at 30/09/22 Male Female Male Female New Zealand 2940 78% 22% 78% 22% Australia 2534 73% 27% 72% 28% Europe 3353 75% 25% 73% 27% Americas 1770 66% 34% 68% 32% Asia 520 34% 66% 42% 58% Total Group 11117 72% 28% 73% 27% • Of our 315 branches,
Slide 40: Sustainability - Social
Sustainability - Social • Health & Safety - key focus across all regions • Global Notifiable Incidents – 2022 Financial Year: 29 incidents September YTD: 16 incidents • Global Near Misses - 2022 Financial Year: 188 incidents September YTD: 124 incidents • Measure by branch, by region. Share lessons/
Slide 41: Sustainability Overview - Governance
Sustainability Overview - Governance • Global Reporting Initiative (GRI) • ISO 14064-1: 2018 (GHG Reporting) • Climate Related Financial Disclosures • Other Corporate Governance: https://www.mainfreight.com/global/en-nz/investor/corporate-governance
Slide 42: Financial Overview
Financial Overview Tim Williams Half Year Expectations Totals: • Revenue $3.01B 32.5% • PBT $301.7M 65.8% • NPAT $217.0M 65.9%
Slide 43: Financial Overview – Half Year Expectations
FINANCIAL OVERVIEW – Half Year Expectations TRANSPORT Revenue:$ 1,123.0 million 25.6% PBT: $ 110.2 million 51.1% Revenue:$ 354.8 million 34.1% WAREHOUSING PBT: $ 29.1 million 31.2% AIR & OCEAN Revenue:$ 1,535.4 million 37.7% PBT: $ 162.4 million 86.9%
Slide 44: Trading Update: Estimated Revenue
August actuals plus September “weeklies” Trading Update: Estimated Revenue 26 weeks of trading (1 Apr to 30 Sep) NZ$000 THIS YEAR LAST YEAR VAR % New Zealand NZ$ 645,841 498,447 29.6% Australia AU$ 698,284 525,040 33.0% Americas US$ 563,471 441,398 27.7% Europe EU€ 331,211 260,432 27.2% Asia
Slide 45: Trading Update: Estimated PBT
August actuals plus September “weeklies” Trading Update: Estimated PBT* 26 weeks of trading (1 Apr to 30 Sep) NZ$000 THIS YEAR LAST YEAR VAR % New Zealand NZ$ 74,614 48,071 55.2% Australia AU$ 63,320 44,518 42.2% Americas US$ 58,873 34,827 69.0% Europe EU€ 23,580 12,568 87.6% Asia US$ 15,831
Slide 46: Financial Overview – Comparisons
FINANCIAL OVERVIEW – Comparisons • September 5 week month PBT 35.6% (A&O 27.4%) • September 5 week month Revenue 14.0% (A&O 3.0%) • Bonus accrual increased proportionally with PBT growth • A&O volumes 4.6% (Air 9.5%, Ocean 1.5%) • 1st quarter 0.8% / 2nd quarter 7.4% • Transfer back t
Slide 47: Financial Overview – Commentary
FINANCIAL OVERVIEW – Commentary • Resilience from our suite of services to volatile economic environment • Net debt $26.0 million • Capital Expenditure: • Detailed update at half year 10 November 2022 • Commencing property investment Americas and Europe • Next trading update given start of February
Slide 48: Teamwork