Slide 1: Half Year Presentation
Half Year Presentation 7 February 2007
Slide 2: This presentation relates to the Freightways Limited NZX announcement and media release of 7
This presentation relates to the Freightways Limited NZX announcement and media release of 7 February 2007. As such, it should be read in conjunction with, and is subject to, the explanations and views contained in those releases.
Slide 3: Presentation
Presentation ¾ 2007 Half Year highlights ¾ Operating performance ¾ Business strategy ¾ Outlook
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Slide 5: 2007 Half Year Highlights
Freightways 2007 Half Year Highlights
Slide 6: General Highlights
General Highlights • Resilience of business model evident in result despite the challenging operating environment • ‘Core’ express package business on a par with last year, ‘Emerging’ Business Mail and Information Management businesses achieving growth expectations • DataBank Australia acquisition d
Slide 7: Financial Highlights
Financial Highlights Dec-06 Dec-05 variance $000 $000 % Operating revenue 144,273 129,796 11% EBITDA 32,990 31,043 6% EBITA 29,727 28,668 4% NPATA 16,486 16,006 3% Earnings per share (NPAT) 11 cents 11 cents
Slide 8: Operating Performance
Freightways Operating Performance
Slide 9: Operating Revenue
Operating Revenue 300 250 200 2nd Half $M 150 1st Half 100 50 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06 Jun07 Year Ended • 11% revenue growth compared to 2006 • 5-year compound average annual revenue growth of 9%
Slide 10: Where Revenue Growth Has Come From
Where Revenue Growth Has Come From 160 150 5% 144 4% 140 3% 130 -1% 130 $M 120 110 100 2005 Org a n i c P ri c i n g Ne w B u s i n e s s Ac q u i s i t i o n 2006 Growth drivers
Slide 11: EBITA
EBITA 60 50 40 2nd Half $M 30 1st Half 20 10 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06 Jun07 Year Ended • 4% EBITA growth compared to 2006 • 5-year compound average annual EBITA growth of 16%
Slide 12: Drivers of EBITA Growth
Drivers of EBITA Growth • Business mix • Margin integrity • Cost control • Acquisition activity • Incremental investment
Slide 13: Balance Sheet
Balance Sheet • Negative working capital position continues • Increase in intangibles of $18m (net of amortisation), due to acquisition of DataBank and Pete’s Post • Increase in fixed assets of $11m (net of depreciation) • Increase in bank borrowings of $24m • Goodwill amortised over 20 years ($6m a
Slide 14: Cash Flows
Cash Flows • Cash generated from operations of $29m • Capital expenditure at expectation of $4m for the half year, excluding the unplanned $8m paid for the Wellington facility and expansion land • Payments for acquisitions of $22m this half year • Borrowings increased by $24m this half year
Slide 15: Dividends
Dividends Dec-06 Dec-05 Dec-04 Dec-03 Dividend declared $11.6m $10.9m $9.45m $7.25m Cents per share 9.00 8.50 7.50 5.85 Key points: • Fully Imputed • Record date 16 March 2007 • Payable 31 March 2007
Slide 16: Business Strategy
Freightways Business Strategy Hubs Shuttle Links Courier "Spoke" to/from area Geographic Area
Slide 17: Business strategy
Business strategy • Continued development of growth opportunities in Freightways’ existing three markets • Positioning, People, Performance, Profit • Explore complementary growth opportunities • Invest in IT and infrastructure
Slide 18: Outlook
Freightways Outlook
Slide 19: Capital expenditure
Capital expenditure 2007 Half Year Full Year Actual Forecast Capital expenditure $12m $18m Depreciation $3m $7m • 2007 includes stepped investment in property, core IT infrastructure and capex requirements for newly acquired DataBank
Slide 20: Outlook
Outlook • Near-term performance will continue to be influenced by NZ economic conditions • Investment in people, infrastructure and customer service initiatives (competitive advantage) will continue • Characteristics of competitive environment expected to remain unchanged • Consistent application of
Slide 21: Summary
Summary 9 Strong successful business 9 Positioned to deliver continuing earnings growth 9 Delivering an attractive dividend yield