Slide 1: HY20 Results Presentation
HY20 RESULTS PRESENTATION 24 February 2020 NZX: FRE
Slide 2: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. HIGHLIGHTS 2. Operating performance 3. Interim dividend 4. Business strategy 5. Outlook 6. Conclusion 2 © Freightways 2020
Slide 3: Highlights: Express Package & Business Mail
HY20 RESULTS PRESENTATION 1. HIGHLIGHTS EXPRESS PACKAGE & BUSINESS MAIL • After suffering a decline in organic volume through much of 2019, due to lower same- customer trading, December showed signs of that decline abating. • Pricing for Effort (PFE) delivered an average of $0.66 per item by Decembe
Slide 4: Highlights: Information Management & Secure Destruction
HY20 RESULTS PRESENTATION 1. HIGHLIGHTS INFORMATION MANAGEMENT & SECURE DESTRUCTION • Poor performance in a number of smaller service lines and the delayed commencement of digitisation contracts proved a drag on 1st half year Australian earnings. A number of initiatives are in place to address the p
Slide 5: Financial Highlights
HY20 RESULTS PRESENTATION 1. HIGHLIGHTS FINANCIAL HIGHLIGHTS HY19 HY20 Change IFRS16 IFRS16 Excl. Excl. Excl. GAAP lease GAAP lease GAAP leasing leasing leasing adj. adj. Note $M $M $M $M $M $M % % Revenue 314.8 - 314.8 318.9 - 318.9 1.3 1.3 EBITA, before non-recurring items i. 50.7 - 50.7 50.1 (2.4
Slide 6: Adjusted Items
HY20 RESULTS PRESENTATION 1. HIGHLIGHTS Adjusted Items 2020 – Lease accounting The new NZ IFRS 16 Leases accounting standard became mandatory for Freightways from 1 July 2019. The pcp results are not required to be restated in the first year of adopting NZ IFRS 16 and accordingly, the Directors beli
Slide 7: Revenue Segmentation
HY20 RESULTS PRESENTATION 1. HIGHLIGHTS REVENUE SEGMENTATION Dec-19 Dec-18 Change $M $M % Express Package 209.4 204.5 2.4 Postal 27.2 28.2 (3.4) Storage & Handling 31.2 31.7 (1.6) Destruction Activities 31.9 30.0 6.1 Other 19.2 20.4 (5.9) Total Revenue 318.9 314.8 1.3 7 © Freightways 2020
Slide 8: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. Highlights 2. OPERATING PERFORMANCE 3. Interim dividend 4. Business strategy 5. Outlook 6. Conclusion 8 © Freightways 2020
Slide 9: HY20 Express Package & Business Mail
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL HY20 EXPRESS PACKAGE & BUSINESS MAIL HY20 HY19 Change $M $M % OPERATING REVENUE 237.6 233.5 1.8 EBITDA 43.4 42.4 2.4 EBITA 39.1 38.6 1.1 EBITA MARGIN 16.4% 16.5% * EBITDA, EBITA and EBITA margin represent the operating results of the di
Slide 10: Express Package: Organic Growth Trend
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL EXPRESS PACKAGE Activity levels: ORGANIC GROWTH TREND • Revenue growth on the pcp 3.0 of 1.3% in Q1 increased to 2.5 2.1% in Q2. 2.0 • Q2 had organic decline of 1.5 0.8% % Change 1.0 0.5 0.0 FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY20 Q1 FY20
Slide 11: Express Package: Pricing for Effort
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL EXPRESS PACKAGE Pricing for Effort: PFE AVERAGE PRICE PER ITEM • By December, average PFE revenue reached $0.66 per item, up from $0.55 at the end of $8.25 October. Target remains $0.75 $ • December saw a peak in the number and proporti
Slide 12: Business Mail
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL BUSINESS MAIL • Despite needing to match cheaper competitor pricing for bulk mail, DX Mail successfully retained its customers through providing quality and timely mail services. • The level of discounting has had an adverse effect on e
Slide 13: HY20 Information Management & Secure Destruction
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL HY20 INFORMATION MANAGEMENT & SECURE DESTRUCTION HY20 HY19 Change $M $M % OPERATING REVENUE 82.3 82.2 0.1 EBITDA 14.4 17.6 (18.4) EBITA 11.0 14.7 (24.8) EBITA MARGIN 13.4% 17.9% * EBITDA, EBITA and EBITA margin represent the operating r
Slide 14: Information Management & Secure Destruction
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL INFORMATION MANAGEMENT & SECURE DESTRUCTION DIGITISATION AU RECORDS PRINT & COPY PAPER PRICNG DESTRUCTION & MEDICAL -$0.6m Revenue +$0.5m Revenue -$1.3m Revenue -$1.5m Revenue +$3.1m Revenue 14 © Freightways 2020
Slide 15: Information Management & Secure Destruction: Digitisation
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL INFORMATION MANAGEMENT & SECURE DESTRUCTION • Digitisation: Work commenced on a major digitisation contract in late-January 2020 (later than originally anticipated) and will continue through calendar 2020. The work leverages TIMG’s secu
Slide 16: TIMG Workflow Diagram
HY20 RESULTS PRESENTATION TIMG WORKFLOW DIAGRAM 16 © Freightways 2020
Slide 17: Balance Sheet Key Points
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL BALANCE SHEET KEY POINTS • Total Assets have increased since FY19 by $217m, due to the impact of NZ IFRS 16 ($195m), acquisitions ($14m) and higher trade and other receivables due to increased activity ($14m) contributing to higher reco
Slide 18: Cash Flow Key Points
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL CASH FLOW KEY POINTS • Underlying cash generated from operations (i.e. before reclassifying $15m of lease payments into interest and principal separately in the cash flow statement to comply with NZ IFRS 16) of $46m was $5m below the PC
Slide 19: Capital Expenditure & Depreciation
HY20 RESULTS PRESENTATION 2. OPERATING PERFORMANCE - DIVISIONAL CAPITAL EXPENDITURE & DEPRECIATION 2020 2020 Half Year Full Year Actual Forecast $M $M Capital Expenditure 12 25 - 26 Depreciation 8 18 * Depreciation numbers above exclude the impact of NZ IFRS 16 19 © Freightways 2020
Slide 20: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. Highlights 2. Operating performance 3. INTERIM DIVIDEND 4. Business strategy 5. Outlook 6. Conclusion 20 © Freightways 2020
Slide 21: Interim Dividend
HY20 RESULTS FRE HY20 PRESENTATION Presentation INTERIM DIVIDEND • INTERIM DIVIDEND: 15 cps • IMPUTATION CREDITS: 5.8333 cps (fully imputed at 28% tax rate) • SUPPLEMENTARY DIVIDEND: 2.6471 cps • RECORD DATE: 13 March 2020 • PAYMENT DATE: 1 April 2020 • THE DRP WILL BE OFFERED: Also, FRE intends to
Slide 22: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. Highlights 2. Operating performance 3. Interim dividend 4. BUSINESS STRATEGY 5. Outlook 6. Conclusion 22 © Freightways 2020
Slide 23: Express Package
HY20 RESULTS PRESENTATION 4. BUSINESS STRATEGY EXPRESS PACKAGE 1. Pricing for Effort (PFE): The EP brands will continue to work at increasing average pricing per item through the remainder of FY20 toward our goal of $0.75 per item. The additional courier income generated from this price increase has
Slide 24: Express Package: New Service Offerings
HY20 RESULTS PRESENTATION 4. BUSINESS STRATEGY EXPRESS PACKAGE 3. New Service offerings: In the 2nd half of FY20, the EP division will commence a same day delivery service for Auckland, which will be positioned between cheaper hub & spoke services and the more expensive point-to-point deliveries, to
Slide 25: Information Management
HY20 RESULTS PRESENTATION 4. BUSINESS STRATEGY INFORMATION MANAGEMENT 1. Facility Utilisation: The IM division will continue to target profitable records storage growth, particularly in facilities where there is low utilisation. 2. Digital Services Growth: TIMG has been successful to date in winning
Slide 26: Secure Destruction
HY20 RESULTS PRESENTATION 4. BUSINESS STRATEGY SECURE DESTRUCTION 1. Additional investment was made in teams, fleets, facilities and acquisitions in calendar 2019 to support the growth of Shred-X’s document destruction, medical waste and product processing capabilities 2. It is planned to continue t
Slide 27: Acquisitions & Alliances
HY20 RESULTS FRE HY20 PRESENTATION Presentation 4. BUSINESS STRATEGY ACQUISITIONS & ALLIANCES 1. Freightways is pleased to announce it completed a number of small acquisitions during the half year, as discussed in the Q1 trading update. Additionally there was a subsequent acquisition in Q2 of a smal
Slide 28: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. Highlights 2. Operating performance 3. Interim dividend 4. Business strategy 5. OUTLOOK 6. Conclusion 28 © Freightways 2020
Slide 29: Outlook
HY20 RESULTS PRESENTATION OUTLOOK • In EP the decline in organic growth showed signs of abating in December, which provides some confidence that the 2nd half of FY20 may return modest organic growth. • We have yet to see any material impact from Covid-19. If in future it has a broader impact on the
Slide 30: Agenda
HY20 RESULTS PRESENTATION AGENDA 1. Highlights 2. Operating performance 3. Interim dividend 4. Business strategy 5. Outlook 6. CONCLUSION 30 © Freightways 2020
Slide 31: Conclusion
HY20 RESULTS PRESENTATION CONCLUSION • Notwithstanding the two macro issues of NZ domestic growth and its impact on EP volumes and lower international paper pricing, Freightways has made significant advances in improving returns from residential courier delivery work and at the same time improving t
Slide 32: Conclusion
HY20 RESULTS PRESENTATION CONCLUSION • The Directors acknowledge the outstanding work and ongoing dedication of the Freightways teams of people throughout New Zealand and Australia. 32 © Freightways 2020
Slide 33: Thank You
THANK YOU 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,
Slide 34: HY20 Results Presentation
HY20 RESULTS PRESENTATION 24 February 2020 NZX: FRE