Slide 1: 2019 Full Year Results Presentation
2019 FULL YEAR RESULTS PRESENTATION 26 August 2019
Slide 2: Agenda
AGENDA 1. HIGHLIGHTS 2. OPERATING PERFORMANCE 3. DIVIDEND 4. STRATEGY 5. OUTLOOK 6. CONCLUSION 2 © Freightways 2019
Slide 3: A Heritage That Started in 1964
A HERITAGE THAT STARTED IN 1964
Slide 4: Proven, Market Leading Brands
PROVEN, MARKET LEADING BRANDS New Zealand Couriers DX Mail TIMG Australia and Shred-X Post Haste Couriers Dataprint New Zealand Med-X Castle Parcels TIMG NZ NOW Couriers SUB60 Kiwi Express Security Express 4 © Freightways 2019
Slide 5: Highlights
SECTION 1 HIGHLIGHTS © Freightways 2019
Slide 6: Highlights
1. HIGHLIGHTS HIGHLIGHTS • Lift in Full Year EBITA margin % in Express Package (EP), despite softer 2HY revenue growth • Positioning the EP business with IT and sales tools to launch Pricing For Effort initiative from 1 July 2019 • Improving route density in residential areas • An increase in averag
Slide 7: Operating Performance
SECTION 2 OPERATING PERFORMANCE © Freightways 2019
Slide 8: Financial Summary
2. OPERATING PERFORMANCE FINANCIAL SUMMARY NOTES Jun-19 Jun-18 Increase Note (i) Operating profit before interest, tax and $M $M % amortisation, before non-recurring items (ii) Operating profit before interest, tax and Revenue 615.7 580.9 6.0 amortisation (iii) Net profit after tax (NPAT), before no
Slide 9: Non-Recurring Items
2. OPERATING PERFORMANCE NON-RECURRING ITEMS 2019 Non-recurring benefits before tax totalling $2.4 million (no tax applicable) in respect of reversing $0.5 million of previously accrued acquisition payables that are no longer expected to be required and a $1.9 million gain upon recording the replace
Slide 10: Revenue Segmentation
2. OPERATING PERFORMANCE REVENUE SEGMENTATION Jun-19 Jun-18 Change $M $M Express package 397.2 376.6 5.5% Postal 54.0 50.5 6.9% Storage & handling 62.6 62.1 0.8% Destruction activities 59.7 52.7 13.3% Other 42.2 39.0 8.2% Total revenue 615.7 580.9 6.0% 10 © Freightways 2019
Slide 11: Consolidated Results
2. OPERATING PERFORMANCE CONSOLIDATED RESULTS REVENUE EBITA* 27% 29% EP & BM IM 71% 73% NOTES * Excluding non-recurring items 11 © Freightways 2019
Slide 12: Express Package & Business Mail
2. OPERATING PERFORMANCE EXPRESS PACKAGE & BUSINESS MAIL Jun-19 Jun-18 Change $M $M Operating Revenue 453.0 428.8 5.6% EBITDA 80.0 74.8 6.9% EBITA 72.2 67.9 6.3% EBITA Margin 15.9% 15.8% 12 © Freightways 2019
Slide 13: Information Management
2. OPERATING PERFORMANCE INFORMATION MANAGEMENT Jun-19* Jun-18* Change $M $M Operating Revenue 164.5 153.8 6.9% EBITDA* 35.3 35.4 (0.1%) EBITA* 29.3 29.8 (1.9%) EBITA Margin* 17.8% 19.4% NOTES * Excluding non-recurring items 13 © Freightways 2019
Slide 14: Operating Revenue
2. OPERATING PERFORMANCE OPERATING REVENUE 2nd HALF 1st HALF 14 © Freightways 2019
Slide 15: EBITA
2. OPERATING PERFORMANCE EBITA NOTE This graph represents the operating profit before interest, tax and amortisation of Intangibles, exclusive of any non-recurring items 2nd HALF 1st HALF 15 © Freightways 2019
Slide 16: Balance Sheet – Key Points
2. OPERATING PERFORMANCE BALANCE SHEET – KEY POINTS • Total assets increased from FY18 by $24m, including $7m of intangible assets in respect of the acquisitions of three small businesses in Australia. Higher trade & other receivables from increased activity ($6m) and a higher cash balance ($9m) due
Slide 17: Cash Flow – Key Points
2. OPERATING PERFORMANCE CASH FLOW – KEY POINTS • Cash generated from operations of $109m was $4m above the PCP. Net cash inflows from operating activities (i.e. after deducting interest and tax payments) were marginally above the PCP at $76m. Income tax paid in the PCP was lower due to payment timi
Slide 18: Capital Expenditure & Depreciation
2. OPERATING PERFORMANCE CAPITAL EXPENDITURE & DEPRECIATION 2019 2020 Full Year Actual Full Year Forecast $M $M Capital Expenditure 21 22 - 24 Depreciation 15 17 18 © Freightways 2019
Slide 19: Dividend
SECTION 3 DIVIDEND © Freightways 2019
Slide 20: Dividend
3. DIVIDEND DIVIDEND • FINAL DIVIDEND - 15.5 cps • IMPUTATION CREDITS - 6.0278 cps (fully imputed at 28% tax rate) • SUPPLEMENTARY DIVIDEND - 2.7353 cps • RECORD DATE - 13 September 2019 • PAYMENT DATE - 1 October 2019 • NO DRP IS OFFERED IN RESPECT OF THIS DIVIDEND 20 © Freightways 2019
Slide 21: Dividend Payment History
3. DIVIDEND DIVIDEND PAYMENT HISTORY YEAR ENDED 30 JUNE 2019 21 © Freightways 2019
Slide 22: Strategy
SECTION 4 STRATEGY © Freightways 2019
Slide 23: 4 Core Areas of Business
4. STRATEGY 4 CORE AREAS OF BUSINESS 23 Freightways 2019 © Freightways 2019
Slide 24: Focused on Service and Innovation
4. STRATEGY FOCUSED ON SERVICE AND INNOVATION 4000+ Committed to staff and contractors market leadership Track record of Deep diversification customer and and innovation consumer focus 24 © Freightways 2019
Slide 25: Looking Ahead: Express Package
4. STRATEGY LOOKING AHEAD: EXPRESS PACKAGE Current State Strategy • Softer same-customer growth in 2HY • Pricing For Effort: Stage I in effect for residential • Higher price increases in FY20 from all market deliveries participants driven by labour cost increases • Residential productivity now embed
Slide 26: Looking Ahead: Business Mail
4. STRATEGY LOOKING AHEAD: BUSINESS MAIL Current State Strategy • Bulk mail pricing has become complex • DX Mail is the only provider capable of • NZ Post’s zonal pricing directly targets performing overnight and five-days-per-week DX Mail delivery • Important to customers to maintain an • Continue
Slide 27: Looking Ahead: Information Management
4. STRATEGY LOOKING AHEAD: INFORMATION MANAGEMENT Current State Strategy • NZ is a high utilisation / high margin business • Improve margins in AU by improving the (82% utilisation) utilisation of our facilities to 82% over the next • AU experiencing good growth in document 2 years storage but has l
Slide 28: Looking Ahead: Secure Destruction
4. STRATEGY LOOKING AHEAD: SECURE DESTRUCTION Current State Strategy • Rationalised market • Continue to target market share gains • Large volumes of active paper and • Move into adjacent markets which require archives to be destroyed efficient pick-up, processing (e.g. separation, • FRE capabilitie
Slide 29: Outlook
SECTION 5 OUTLOOK © Freightways 2019
Slide 30: Outlook
5. OUTLOOK OUTLOOK • In the short term, expect the trend from 2HY to continue in terms of same-customer sales • Focus on pricing and efficiency should deliver YoY earnings growth, which will position the business well when organic growth levels improve • Expect utilisation to improve in AU, targetin
Slide 31: Conclusion
SECTION 6 CONCLUSION © Freightways 2019
Slide 32: Conclusion
6. CONCLUSION CONCLUSION While the Full Year results for 2019 were impacted by lower organic growth rates in EP and slower transition of archives into IM, we are encouraged by: • margin expansion in 2HY in EP • pricing initiatives which are underway and expected to provide a profitable base for B2C
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,