Freightways Group Limited · NZX:FRW
Freightways — FY2023 Earnings Presentation
27 slides from Freightways's earnings presentation, Aug 21, 2023
Slide 1: A New Platform for Growth: FY23 Results
A NEW PLATFORM FOR GROWTH FREIGHTWAYS FY23 RESULTS 21 AUGUST 2023 | NZX FRW
Slide 2: Disclaimer
DISCLAIMER FREIGHTWAYS FY23 RESULTS PRESENTATION Read this presentation with the financial statements The financial results in this presentation should be read in conjunction with the financial statements for the year ended 30 June 2023, which can be found in the NZX preliminary results announcement
Slide 3: Agenda and Presenters
AGENDA PRESENTERS FREIGHTWAYS FY23 RESULTS PRESENTATION 1. Introduction and Highlights 2. Financial Summary • Capital Management • Business Performance 3. Business Strategy 4. Outlook Mark Troughear Stephan Deschamps 5. Appendices Chief Executive Chief Financial Officer Neil Wilson Steve Wells Gener
Slide 4: A Diversified Platform for Growth
A DIVERSIFIED PLATFORM FOR GROWTH FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 REVENUE BY GEOGRAPHY EXPRESS PACKAGE & TEMPERATURE INFORMATION BUSINESS MAIL WASTE RENEWAL CONTROLLED MANAGEMENT (EP &BM) SERVICES • Network overnight and • Refrigerated national 30% • Physical storage and • Medical waste s
Slide 5: FY23 Highlights
FY23 HIGHLIGHTS FREIGHTWAYS FY23 RESULTS PRESENTATION ACROSS EXPRESS PACKAGE INFORMATION FREIGHTWAYS & BUSINESS MAIL MANAGEMENT 29% 32% 15% REVENUE GROWTH REVENUE GROWTH REVENUE GROWTH ACROSS ACROSS ACROSS FREIGHTWAYS FREIGHTWAYS FREIGHTWAYS 7% 15% 26% NPAT* GROWTH EBITA* * GROWTH CASH FLOW 5 * GAAP
Slide 6: Financial Summary & Capital Management
FINANCIAL SUMMARY & CAPITAL MANAGEMENT
Slide 7: FY23 Consolidated Performance
FY23 CONSOLIDATED PERFORMANCE FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 FY22 Change • Revenue growth of 29% supported by growth across Note $m $m % both EP&BM of 32% and IM of 15% divisions • Successful integration of Allied Express (“Allied”) and Operating Revenue 1,121.6 873.1 28.5 strong perform
Slide 8: Capital Management and Dividend Policy
CAPITAL MANAGEMENT AND DIVIDEND POLICY FREIGHTWAYS FY23 RESULTS PRESENTATION CAPITAL MANAGEMENT PRINCIPLES ‒ Targeting solid Investment Grade credit profile, at a FINAL DIVIDEND 19 CPS (37 CPS FOR THE YEAR) level that minimises the cost of capital ‒ Net Debt / EBITDA between 2x and 3x (currently 2.8
Slide 9: ASX Dual Listing
ASX DUAL LISTING FREIGHTWAYS FY23 RESULTS PRESENTATION • Whilst the majority of our business is in New Zealand, and the NZX is our primary listing, Australia is a larger and growing part of our activity, and it is likely that the pace of growth in Australia will surpass that of New Zealand • A dual
Slide 10: Divisional Performance
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Slide 11: FY23 Express Package & Business Mail
FY23 EXPRESS PACKAGE & BUSINESS MAIL FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 FY22 Change New Zealand $m $m % Operating Revenue 911.1 689.0 32.2 • EP&BM Network courier volumes were largely as predicted for H2 EBITDA (non-GAAP) 169.8 142.2 19.4 • Volume for the H2 was down 2% on the pcp (down 1.3%
Slide 12: FY23 Express Package & Business Mail: Australia
FY23 EXPRESS PACKAGE & BUSINESS MAIL FREIGHTWAYS FY23 RESULTS PRESENTATION Australia • Allied has provided a national footprint for profitable growth in express package across Australia and assisted in diversifying FRW earnings so that they are less reliant on NZ’s economic performance • Strong fina
Slide 13: NZ Network Courier Item Trend for H2 FY23
NZ NETWORK COURIER ITEM TREND FOR H2, FY23 as a % of FY22 FREIGHTWAYS FY23 RESULTS PRESENTATION 125.0% 123.8% 120.0% 117.9% 115.0% 110.0% 105.0% 102.6% 102.3% 101.8% 101.5% 99.8% 100.3% 99.9% 100.4% 99.9% 100.2% 100.0% 99.3% 98.9% 99.3% 98.2% 98.2% 95.5% 94.2% 94.6% 95.0% 92.0% 90.3% 90.6% 89.4% 90.
Slide 14: NZ Network Courier PFE Revenue per Item
NZ NETWORK COURIER PFE REVENUE PER ITEM FREIGHTWAYS FY23 RESULTS PRESENTATION $1.80 $1.60 $1.62 $1.40 $1.52 $1.32 $1.20 $1.00 $1.04 $0.80 $0.60 $0.71 $0.40 $0.20 $- 2020 2021 2022 2023 2024 14
Slide 15: FY23 Information Management and Waste Renewal Highlights
FY23 INFORMATION MANAGEMENT AND WASTE RENEWAL HIGHLIGHTS FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 FY22 Change • IM Revenue up 15% (FX, recovery of activity in TIMG NZ and $m $m % AU) ‒ Strong growth in digitisation, up 52% on pcp Operating Revenue 214.3 187.1 14.6 ‒ Major NZ digital project helped
Slide 16: Strategy Update
STRATEGY UPDATE
Slide 17: Three Horizons of Growth
THREE HORIZONS OF GROWTH FREIGHTWAYS FY23 RESULTS PRESENTATION ACTIVITIES HORIZON 1 HORIZON 2 HORIZON 3 Establish New Lines of Extend and Defend Grow Scale Business B2B B2C Oversize (25kg+) • Focus on a profitable market • Leverage our trans-Tasman • Scale Oversize revenue in NZ share gains presence
Slide 18: Three Horizons of Growth
THREE HORIZONS OF GROWTH FREIGHTWAYS FY23 RESULTS PRESENTATION ACTIVITIES HORIZON 1 HORIZON 2 HORIZON 3 Establish New Lines of Extend and Defend Grow Scale Business Storage Digitisation eCommerce 3PL • Improvement in utilisation of • Large scale digital project • STOCKA eCommerce offering existing w
Slide 19: Sustainability - Key Initiatives for Freightways
SUSTAINABILITY - KEY INITIATIVES FOR FREIGHTWAYS FREIGHTWAYS FY23 RESULTS PRESENTATION SDG FREIGHTWAYS KEY FY24 INITIATIVES • Health and safety in employment: Injury reduction. TRIFR continues to reduce year SDG#3 on year GOOD HEALTH & WELLBEING • Our commitment is to improve Contractor earnings yea
Slide 20: M&A Growth
M&A GROWTH FREIGHTWAYS FY23 RESULTS PRESENTATION ACQUISITION STRATEGY & INVESTMENT CRITERIA SUCCESSFUL M&A TRACK RECORD (recent examples) ✓ Target characteristics: • Entry point to the Australian 1. Established / profitable, well-managed and growing market for EP&BM businesses • Platform for growth
Slide 21: Outlook
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Slide 22: Outlook
OUTLOOK • The economic climate has presented challenges over the past six months, and we expect this to FREIGHTWAYS FY23 RESULTS PRESENTATION continue through FY24. In NZ, while same-customer volume is lower than in FY23, we have secured new customers who are mitigating this impact. The tight labour
Slide 23: Questions
23 FREIGHTWAYS FY23 RESULTS PRESENTATION QUESTIONS
Slide 24: Appendices
24 FREIGHTWAYS FY23 RESULTS PRESENTATION APPENDICES
Slide 25: Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16
Appendix - Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 FREIGHTWAYS FY23 RESULTS PRESENTATION FREIGHTWAYS GROUP FY23 FY23 FY23 FY22 FY22 FY22 $m $m $m $m $m $m Note Post NZ IFRS16 NZ IFRS16 Pre NZ IFRS16 Post NZ IFRS16 NZ IFRS16 Pre NZ IFRS16 adjustment (non-GAAP) adjustment (non-GAAP) Operatin
Slide 26: Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16: Express Package & Business Mail
Appendix - Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 FY22 Change EXPRESS PACKAGE & BUSINESS MAIL $m $m % Operating Revenue 911.1 689.0 32.2 EBITDA (after NZ IFRS16) 169.8 142.2 19.4 Less: NZ IFRS16 adjustment (34.3) (26.3) 30.2 EBITDA (before NZ IFR
Slide 27: Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16: Information Management & Waste Renewal
Appendix - Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 FREIGHTWAYS FY23 RESULTS PRESENTATION FY23 FY22 Change INFORMATION MANAGEMENT & WASTE RENEWAL $m $m % Operating Revenue 214.3 187.1 14.6 EBITDA (after NZ IFRS16) 56.4 55.2 2.1 Less: NZ IFRS16 adjustment (19.0) (17.3) 10.3 EBITDA (before NZ