Freightways Group Limited · NZX:FRW
Freightways — H1 FY2023 Earnings Presentation
26 slides from Freightways's earnings presentation, Feb 20, 2023
Slide 1: Freightways FY23 H1 Results
DRIVING GROWTH RESPONSIBLY FREIGHTWAYS FY23 H1 RESULTS 20 FEBRUARY 2023 | NZX FRE
Slide 2: Disclaimer
Disclaimer 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 2022, which can be found in the NZX preliminary results announcement. No offer or investment advice This p
Slide 3: Agenda and Presenters
Agenda Presenters 1. Introduction and Highlights 2. Financial Summary 3. Business Performance 4. Outlook Mark Troughear Stephan Deschamps 5. Appendices Chief Executive Chief Financial Officer Neil Wilson Steve Wells General Manager General Manager of Express Package 3 Freightways FY23 H1 Results Pre
Slide 4: FY23 H1 Highlights
FY23 H1 HIGHLIGHTS: ACROSS EXPRESS INFORMATION FREIGHTWAYS PACKAGE MANAGEMENT 25 % REVENUE 28 % REVENUE 15 % REVENUE GROWTH GROWTH GROWTH ACROSS ACROSS ACROSS FREIGHTWAYS FREIGHTWAYS 28 FREIGHTWAYS % 3.5% NPAT GROWTH 8 % EBITA GROWTH CASH FLOWS FROM OPERATIONS 4 Freightways FY23 H1 Results Presentat
Slide 5: H1 Performance
H1 PERFORMANCE 5 Freightways FY23 H1 Results Presentation
Slide 6: FY23 H1 Consolidated Performance
FY23 H1 Consolidated Performance H1 FY23 H1 FY22 Change • Revenue growth of 25% supported by growth across Note $m $m % both EP&BM 28% and IM 15% divisions Operating Revenue 552.1 442.0 24.9 • Successful integration of Allied Express (“Allied”) EBITDA (non-GAAP) (i) 113.7 102.3 11.1 from Q2 FY23 EBI
Slide 7: FY23 H1 Express Package & Business Mail
FY23 H1 Express Package & Business Mail Highlights • EP Network courier volumes were largely as expected for Q2 H1 FY23 H1 FY22 Change ‒ Volume for the half was down 2% on the pcp (*1.3% adjusting for $m $m % the additional holiday) however corresponding pcp had extremely high volume in the last 15
Slide 8: FY23 H1 Express Package & Business Mail: Allied Express
FY23 H1 Express Package & Business Mail Allied Express • Strong financial performance over the quarter – contributed revenue of $68m and NPAT of $4.9m in Q2 • Volumes and revenue are steady – no material sign of declining volume in aggregate • Benefits of scale through larger depots ‒ Added 17,000m2
Slide 9: FY23 H1 Information Management and Waste Renewal
FY23 H1 Information Management and Waste Renewal Highlights H1 FY23 H1 FY22 Change • IM Revenue up 15% (FX, recovery of activity in TIMG NZ and AU) $m $m % ‒ Strong growth in digitisation, up 24% on pcp Operating Revenue 103.6 90.0 15.1 ‒ Return of service work for media and documents EBITDA (non-GA
Slide 10: H1 Capital Management & Dividend Policy
H1 CAPITAL MANAGEMENT & DIVIDEND POLICY 10 Freightways FY23 H1 Results Presentation
Slide 11: Capital Management and Dividend Policy
Capital Management and Dividend Policy CAPITAL MANAGEMENT PRINCIPLES • Targeting solid Investment Grade credit profile, at a INTERIM DIVIDEND 18 CPS level that minimises the cost of capital. • Net Debt / EBITDA between 2x and 3x 7.00 CPS (FULLY IMPUTED AT 28% IMPUTATION CREDITS TAX RATE) DIVIDEND PO
Slide 12: Strategy Update
STRATEGY UPDATE 12 Freightways FY23 H1 Results Presentation
Slide 13: 3 Horizons of Growth
3 HORIZONS OF GROWTH 13 Freightways FY23 H1 Results Presentation
Slide 14: Express Package & Business Mail
Express Package & Business Mail Horizon 3: Oversize Horizon 2: B2C ESTABLISH NEW LINES OF BUSINESS Horizon 1: B2B GROW SCALE • Launch of Kiwi Express Oversize • Continue to make service in 2022 improvements to EXTEND AND DEFEND PFE ($1.53per item • Leverage the Allied in H1) footprint through • Focu
Slide 15: Temperature Controlled Logistics
Temperature Controlled Logistics Horizon 3: Same Day Horizon 2: 3PL ESTABLISH NEW LINES OF BUSINESS Horizon 1: National Delivery GROW SCALE • Roll out of national delivery for • Utilisation of 95% in convenience stores Auckland EXTEND AND DEFEND • Leverage the Big Chill • Ruakura expected Distrib
Slide 16: Information Management
Information Management Horizon 3: eCommerce 3PL Horizon 2: Digitisation ESTABLISH NEW LINES OF BUSINESS Horizon 1: Storage GROW SCALE • Scale STOCKA NZ – an offering for SME’s • Strong pipeline of who require digitalisation eCommerce EXTEND AND DEFEND opportunities. Large fulfilment by scale governm
Slide 17: Waste Renewal
Waste Renewal Horizon 3: High Value Waste Horizon 2: Medical Wastes ESTABLISH NEW LINES OF BUSINESS Horizon 1: Secure Destruction GROW SCALE • Establishment of SaveBoard in NSW • Commission the and plans developed processing footprint for VIC and QLD. Still EXTEND AND DEFEND in VIC (3000 cashflow ne
Slide 18: M&A Growth
M&A Growth RECENT ACQUISITIONS ACQUISITION STRATEGY Entry point to the Australian Targets: established / profitable, well managed and growing market for EPBM businesses with immediate EPS impact Platform for growth in the Oversize category of the Size: bolt-on acquisitions through to larger
Slide 19: Outlook
OUTLOOK 19 Freightways FY23 H1 Results Presentation
Slide 20: Outlook
Outlook Focus on controlling • The economic climate will be a tougher one to operate in over the near term, but we variable costs in are positive about the diversification and resilience our business model offers NZ over the next 6 months • Our NZ Express Package businesses will use efficiency and p
Slide 21: Questions
QUESTIONS 21 Freightways FY23 H1 Results Presentation
Slide 22: Appendices
APPENDICES 22 Freightways FY23 H1 Results Presentation
Slide 23: Sustainability
Sustainability Key Measures for Freightways 3. GOOD HEALTH AND WELLBEING • Health and safety in employment – targeting a 10 reduction in TRIFR. • Deployment of advanced in cab road safety technology in linehaul vehicles • Employee wellness programme and mental health awareness 13. CLIMATE ACTION tra
Slide 24: Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16: Freightways Group
Appendix Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 (Unaudited) FREIGHTWAYS GROUP H1 FY23 H1 FY23 H1 FY23 H1 FY22 H1 FY22 H1 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) Operating Revenue
Slide 25: Reconciliation: Express Package & Business Mail
Appendix Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 (Unaudited) HY23 HY22 Change EXPRESS PACKAGE & BUSINESS MAIL $m $m % Operating Revenue 450.3 351.1 28.2 EBITDA (after NZ IFRS16) 92.1 76.3 20.8 Less: NZ IFRS16 adjustment (16.1) (12.4) 29.5 EBITDA (before NZ IFRS16) 76.0 63.9 19.1 EBITA (aft
Slide 26: Reconciliation: Information Management & Waste Renewal
Appendix Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16 (Unaudited) HY23 HY22 Change INFORMATION MANAGEMENT & WASTE RENEWAL $m $m % Operating Revenue 103.6 90.0 15.1 EBITDA (after NZ IFRS16) 26.3 29.3 (10.3) Less: NZ IFRS16 adjustment (9.4) (8.4) 12.4 EBITDA (before NZ IFRS16) 16.9 20.9 (19.4) EB